I Can’t Afford My Loan Repayments

If you are falling behind with loan, deal with it early rather than waiting for the balance and worry to grow.

The first question is whether the loan is unsecured or secured against an asset such as your home.

Why does the type of loan matter?

An unsecured personal loan is normally a non-priority debt. A loan secured against your home can have much more serious consequences if payments are missed.

Check the agreement or ask the lender if you are unsure.

Contact the lender early

Tell the lender you are in financial difficulty and ask what options are available. Do not agree to a repayment that makes essential household spending impossible.

If the loan is secured, get advice promptly because your home or another asset may be at risk.

Be cautious about refinancing

Extending a loan or consolidating debts can reduce a monthly payment but increase the period or total amount repaid.

Turning unsecured debt into borrowing secured against your home can also change the risk significantly.

Look at all your debts together

If the loan is only one of several problems, a full debt review is more useful than dealing with it in isolation.

Free debt advice can help identify priority debts and compare realistic solutions.

Look at the whole financial picture

If this problem is part of a wider shortage of money, list all debts and essential spending and arrange free debt advice.

The aim is an affordable plan for the household, not simply stopping the next phone call or letter.

7.40: What Are Priority and Non-Priority Debts?

7.50: Where Can I Get Free Debt Advice?

7.56: What Questions Should I Ask Before Agreeing to a Debt Solution?

Important information

This guide provides general information and is not intended to provide financial, benefits, debt, housing or legal advice. Individual circumstances can be different. Check current information from official sources and seek advice from an appropriately qualified or authorised adviser before making important financial decisions.