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Managing your debts

If the coronavirus pandemic has affected your income and you’re wondering how you’ll manage existing debt, here are some tips to help.

1. Get assistance

If you think you’ll struggle to keep up with repayments in the coming months, it can be difficult to know where to begin. But there are several ways to get some breathing space. 

From prioritising debts to managing on a reduced income, help is available. You can also check to see if you’re missing out on unclaimed benefitsWhatever your financial situation looks like, you’re not alone. 

If you’re worried about making a payment, contact your lender before it’s due. It may be simpler to do this online, as lenders may be experiencing high call volumes.


Explore: Money worries - help when you need it most

2. Consider your credit rating

If you took a mortgage or credit card payment holiday, or a loan repayment deferral, it would not have affected your credit score, if you resumed making payments after the holiday, or deferral period, ended.

Keep in mind - if you miss payments when you're not on an agreed payment holiday or loan repayment deferral - your credit rating may be negatively affected. Speak to your lender if you think you might miss a payment.

If you’re concerned, you can check your credit rating to make sure there are no mistakes.

3. Draw up an emergency budget

This may be a good time to review your expenses and create an emergency budget. You may find areas you could cut back on, such as memberships and subscriptions, or find a cheaper energy supplier. 

If you’re thinking about borrowing more to cover essential costs in the coming months, it’s worth looking at other options first, which may help reduce your need to borrow.

For example, if your income has been affected by coronavirus, there may be government support available. You may also be able to get help with any bills you’re struggling to pay, including Council Tax.  

4. Consider debt consolidation

If you have multiple debts, it may be possible to make them easier to manage. A debt consolidation loan combines all your debts in one place, giving you a single monthly repayment and interest rate. Debt consolidation could also be taken against your property as additional borrowing, in the form of a home loan.

It’s important to check whether a debt consolidation loan, or home loan, would save you money in interest.

You should consider, not just the interest rate and monthly repayments, but also the term of the new loan compared to the remaining term of your existing debts. 

If you spread your payments over a longer term, you could end up paying more overall than under your existing arrangements, even if the interest rate on this new loan is less than the rates you are currently paying.


Explore: What is debt consolidation and how does it work?

5. Get more help

If you’re still worried about managing your debts, there are places to find help. 

It's easy to answer your query online. Visit our Help page to find out how.