If you’re struggling to repay debt, don’t worry – you’re not alone. Follow these steps to help you organise your finances, get help with repayments and find free debt help.
Speak to a free debt adviser
Use our Debt adviser locator tool to find free and confidential debt advice online, over the phone or near to where you live.
A debt adviser will:
treat everything you say in confidence
never judge you or make you feel bad about your situation
suggest ways of dealing with debts that you might not know about
check you’ve applied for all the benefits and entitlements available to you.
It’s important to get free debt advice if you’re worried you’ll miss a priority payment, have already missed one or are facing any emergency issues, including:
being contacted by bailiffs
receiving a court summons
having your gas or electricity cut off
having your home, car or goods repossessed.
Alternatively, the steps below will guide you through what to do.
Add up how much you owe
The first step is to work out how much money you need to repay. It can be daunting, but this will help you work out a plan to tackle it.
Write down everything you need to pay for
If you regularly pay for something, make sure it’s on your list. This could include:
household bills
insurance
credit or store cards
loans
overdrafts
car finance
money borrowed from family and friends.
Note how much and when you pay, plus how much you still have left. For example:
|
Payment |
Amount |
Due date |
How much or long left |
|
Bank loan |
£85 |
25th every month |
£1,500 left |
|
TV package |
£35 |
2nd every month |
11 months left of contract |
Double check your accounts and statements to make sure you’ve not missed anything.
Check if you can cut any costs
Once you have a list of your payments, see if you can cancel anything you no longer need or any luxuries you can live without. Just be careful if you’re in the middle of a contract as you might need to pay a penalty to leave early.
To help, try our free and easy-to-use Budget planner. It uses your details to give you a breakdown of your finances and personalised tips.
Use any savings to clear debt
Debt usually costs far more than savings pay, so any spare cash is better off being used to reduce or pay off debt.
If possible, it’s a good idea to keep enough in savings to cover at least three months’ expenses. This gives you a buffer for emergencies. See tips on building an emergency fund.
Check for ways to boost your income
Increasing your income could help cover your repayments or clear your debts quicker.
To see if you’re eligible for any payments, try:
For more information, see Ways to boost your income.
Plan how to tackle your debts
Once you’ve organised your finances, take these steps to improve your situation.
Work out what to pay first
Our Bill prioritiser helps sort out which costs you need to deal with first.
Some bills and payments are higher priority as the consequences of not paying can be more serious.
Check if you can make your debt cheaper
While taking out new borrowing is best avoided, there are special products that are designed to cut the cost of debt.
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If you move debt from existing store or credit cards, these often charge no (or low) interest for several months. You’ll usually pay a one-off fee, but your repayments will clear the balance rather than extra interest. |
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This is where you get a new loan to repay your existing debt, so you only have one monthly repayment. But there are potential dangers to consider first. |
Tell your provider you're struggling
Providers must offer you a range of support options – the sooner you talk to them the better.
For step-by-step help, see talk to your creditor.
Try to avoid further borrowing
If you’re already struggling, borrowing more to get by might seem like your only choice. But it can quickly lead to a spiral of uncontrollable costs.
Follow these rules to stop your situation from getting worse.
Don’t take cash out on a credit card
Cash withdrawals on a debit card are fine. But use a credit card and your credit score takes a hit, which can make it harder to get credit in the future.
You’re also charged unavoidable interest and sometimes a fee. Your best bet is to just not do it.
Don’t exceed your overdraft or credit card limit
When you use your overdraft, you’re going into debt. Overdrafts are typically more expensive than credit cards and loans if you use them long-term, so they’re best used for emergencies or borrowing for a few weeks.
Used well, they can have a positive impact on your credit score. To do this, you need to:
- stay within the limit your bank has set for you
- regularly pay off your overdraft.
Your credit score will be negatively affected if you:
- go over your agreed limit without talking to your bank
- do not make significant repayments.
If you rely on your overdraft, ask your bank if you can have an interest-free buffer – some providers will offer up to £500.
Use our Compare bank accounts tool to see overdraft charges across many different accounts.
Beware of loans from other people
Loan sharks often use online channels like social media to try and lend to people. This is illegal and could cost you a lot more than you think.
You also won’t be covered by the Financial Ombudsman Service if things go wrong. Find out more about loan sharks and how to spot them.
Even if you think you know someone, there are still risks. If you do go ahead, make sure you’ve agreed how and when you will repay before borrowing money.
It’s a good idea to get something in writing which spells out:
how much you’re borrowing and for how long – make sure it’s affordable for both of you
how often you’ll repay – consider setting up a standing order so the payment is automatic
what would happen if you were unable to pay or they unexpectedly needed the money back sooner.
For more help, see our guide borrowing money from people you know.
Don’t lend money to others
If a loved one asks for financial help, it can be hard to refuse. But lending money could make both of your situations worse.
Instead, encourage them to look at their budget or seek free debt advice if they’re really struggling.
See How to have a conversation about money for practical tips.
Help if you’re a victim of fraud or a scam
If you think you’ve signed up to a fraudulent website or scammers have your details, quickly ask your bank to cancel your card or freeze your account.
To speak to someone, call our financial crimes and scams unit on 0800 015 4402.
It’s also worth reporting it to:
