It’s probably against the terms of your debt management plan (DMP) to take out a loan without speaking to your DMP provider first.
This is because - although it may be possible to get a loan during a DMP - it’s not usually a good idea. Any spare income you have will be going towards paying off your existing debts. That means you’re unlikely to be able to afford to take on extra borrowing.
If you’re struggling to make ends meet on the budget agreed before starting your DMP, speak to your plan provider. They may be able to negotiate lower payments with your lenders.
Can I take out a personal bank loan during a DMP?
Most mainstream banks will be reluctant to lend to someone during a debt management plan.
They’ll probably be able to see from your credit report that you’ve had problems making repayments and are currently paying less than originally agreed on your existing debts.
This will suggest to them that you won’t be able to manage extra payments on top.
Can I take out a payday loan during a DMP?
Although you may be able to get a payday loan during a debt management plan, it isn’t a good idea.
Payday loan companies tend to charge extremely high rates of interest, so it’s best to avoid them whether you have a DMP or not.
If you’re struggling to manage, you should get debt advice before taking out more credit.
Can I get a car loan during a debt management plan?
If you need to replace your car or buy a new one during your debt management plan, you may be considering a loan. It’s important to speak to your DMP provider first. You may be breaking the terms of your DMP if you don’t.
Your DMP provider will be able to go through your budget and make sure taking out a car loan is realistic and affordable.
As well as any loan repayments, they’ll look at whether you’ll be able to cover all the costs involved in running a car including:
- fuel
- insurance
- road tax
- MOT
- servicing/repairs
- breakdown cover
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