What you should do if you’re struggling with loan repayments

When you’re struggling with loan repayments, taking positive action is always the best course. There’s plenty of help out there if you need it and seeking help sooner usually leads to a better outcome.




At Monva, we understand how changes to your financial situation can be made more stressful if you have debts to repay.

Even when you can’t afford your loan repayments, there’s help available to find your way out of debt and seeking help early tends to have better outcomes.


What you should do if you’re struggling with loan repayments?

There are many reasons why you might find yourself struggling to meet your financial obligations such as loan repayments.

Should you find yourself in that position, there are things you can do to help you manage your finances:

  • Contacting your lender should be the first thing you do if you think you might struggle with your loan repayments. Making contact with them before you miss a payment is usually seen more positively than if you’re already missing payments when you make contact. However, even if you are already behind, contacting your lender can mean less stress and fewer charges. Your bank may also be able to offer advice as well as provide options such as repayment holidays, reduced payments or a deferred payment loan.

  • Seeking free debt advice should be done if you’re unable to come to an arrangement with your lender(s). A debt adviser will be able to help you negotiate an affordable repayment plan.


If you miss a loan repayment what happens?

If you miss a loan repayment date, you’ll likely get a letter from your loan provider warning you the payment is outstanding. This letter will usually also inform you of any late payment fees or interest charges you will incur.

A missed payment will also be added to your credit report, which could make it harder for you to access lines of credit in the future.

Missing several loan repayments will result in a default notice and you may face the following if you don’t take any action:

  • If you have a secured loan, your lender could threaten to repossess your home or vehicle
  • Your debt may be passed to a debt collection agency
  • Court action could be taken against you
  • A much larger negative mark will be added to your credit report
  • Having to file for bankruptcy or agree to an IVA

This is why it’s important to contact your lenders and/or seek free debt advice as soon as possible if you can’t afford your loan repayments.


How to create a budget

Determining a budget and sticking to it can be a great way to get your finances back on track when you’re in financial difficulty. It can also help you work out how much you can afford to pay towards loan repayments each month without running up more debt.

To create a household budget you should:

  1. Look at your income each month including your salary, benefits and any other sources of income to calculate your total monthly income
  2. List all of your outgoings, everything from your mortgage or rent to your grocery shopping. This way you can total your outgoings vs. your income
  3. Once you’ve looked at your outgoings you can work out where you can cut back such as on non-essential spending like eating out.


How to find free debt advice

There are several organisations that provide free advice for people struggling with debt, including:

You’re also able to get face-to-face debt advice from local charities and not-for-profit agencies. You can use the Money Advice Service’s debt advice locator to find help in your area or our local council should have details of a suitable organisation. Just make sure to check it’s free before you start.

Category: Loans
Last Updated:

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