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Finances when in debt

Every month, we pay for so many different financial responsibilities and obligations. These can all add up, leaving us with little money to pay towards our debts repayments. Below is some information on how to save money for different things such as, insurance, debts, bills etc...

If you are having difficulty repaying your debts, contact us at Debt Advice for help and information on your options. Fill in the form on this page or call us on 0800 043 5133 for confidential advice.

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Car Insurance

  • Shop around for your Car Insurance - It might be a chore, but can save you money. Use Price Comparison sites and also phone around different insurance brokers.
  • Pay upfront if possible or over a shorter period - This could save you on interest charges..
  • Set a higher excess level - This could bring your premium down substantially, although be mindful that if you have an accident, you could have a pricey sum to pay upfront.

Life Insurance

  • Shop around - Compare life insurance quotes on various comparison sites online. Buying through an independent financial adviser is usually more expensive.
  • Review your current life insurance plan - There may be better and cheaper options with other companies. You are not obligated to stick with the same insurer.

Home Insurance

  • Search comparison sites - Search around for cheap insurance on comparison sites. Remember the cheapest isn't always the best. You need to check exactly what you are being covered for.
  • Buy online - The insurance market is more competitive online.


Best Credit Card Deals - Balance Transfers

  • If you have high interest credit cards with debts on them and you are struggling to clear the balances, it might be an idea to shop around for a 0% balance transfer deal on an existing or new card. You can transfer your debts on to this card in order to pay them off over a specified timeframe, without having extra interest and charges applied. Research your options carefully as you want the best deal possible.
  • Work our how long the deal is for and if you will have your debts repaid within the timeframe. If you wont, you could end up paying high interest and charges on the remaining debts, after the 0% deal has ended. If you think your debt will take a long time to pay off, consider transferring to a low interest for life card instead.
  • Some balance transfers deals charge a fee for transferring your debt balances, so make sure you are getting the best deal possible and that it will actually save you money.
  • If you get a good balance transfer deal of 0% interest for a specified period of time, make sure to only use the card for paying off the balance of your debts. If you start spending on the card, you could be subject to interest and charges on purchases and you could lso cancel out your balance transfer deal, meaning you pay interest on these debts too. This could leave you in a worse position than when you started before opting for the balance transfer.
  • Once you have made a balance transfer to another card, it is advisable to not use or even close the card account that you transferred the balance from. This could prevent you from using it again in the future and adding even more debt onto your existing debts.
  • Do not take on new store and credit cards when you are struggling to pay your current debts.
  • You may not be eligible for a balance transfer deal, if your credit rating is already affected.

Best Loan Deals

  • Shop around - Don't just aproach your existing bank. Look for the best deals on comparison sites. Your bank may even match competitive rates of other loan providers.
  • Think carefully - The loan that is best for you is the loan that suits your circumstances, so do some research.
  • Loan to pay off Credit cards - If you are getting a loan to pay off credit cards, you might want to consider a balancer transfer deal instead. If it's done properly, this could be the cheaper option.
  • Length of the loan - If you want the loan for a short period of time, these can be very expensive.

IVAs for dealing with unaffordable debt

  • Research an IVA before doing anything - An IVA is not a solution that should be entered into lightly. It is a formal Insolvency agreement, so will need careful assessment from a professional, to see if it is the right choice for you. We can assess your situation and explain all the ins and outs of what an IVA entails, so you can give it some thought to see if it's right for you.
  • You could write off the debts you cannot afford to pay on completion - If you have unaffordable debts over £8,000 and more than two creditors, then an IVA might be a suitable solution for you.
  • Lower affordable monthly repayments - Your payments could be reduced to an amount that you can afford.
  • Know when you will be debt free - In an IVA, you will have a set completion date, provided you stick with the terms of your arrangement.
  • No Upfront fees - If you are entering an IVA, do not pay upfront fees in advance. Some companies charge one to two months fees for handling or setting up your IVA proposal and this fee is additional to your IVA payments. You could be left with a bill, even if your IVA isn't approved. Contact us for further information on this or click here to read more about IVAs.

Remortgaging to pay off debt

  • In Debt with equity on your home? - If you are struggling to pay your debts and have equity on your home that could cover the debt, you could consider remortgaging and releasing some of the equity as an option. If you are considering this option, research carefully because factors such as the mortgage market, years of repayment on your mortgage and interest rates could mean you end up paying more in the long term.
  • Take advantage of better mortgage deals - It might be good to look for a better mortgage deal if you are on a high fixed or variable rate mortgage. Reducing interest on your mortgage could save you considerable money every month.

Debt Consolidation

  • Manage your debts easier - Debt consolidation can help you manage your debts easier as you are gathering all your debts together into one manageable payment.
  • Lower your payments - By consolidating your debts into one loan, you could have lower monthly payments spread out over a longer period of time.
  • Careful consideration - Debt Consolidation might not be your best option if you are currently struggling with repayments. You could be pushing a problem further down the line. You also need to make sure you are getting a good interest rate on your loan application, because it could end up becoming more expensive in the long run. You may not get a loan or a good interest rate on a loan if your credit rating is already impacted by your current debts.

General Bills

Mobile Phone Contract

  • Phone your network provider - While most mobile contracts are set in stone, some providers favour loyalty and might match better tarifs on other networks if you are nearing the end of your contract and are due a renewal. If you are mid contract, you could phone your provider to tell them that you are unhappy with your tariff to see if they can offer you any better deals.
  • Struggling with payments - Your provider might be reasonable if you let them know you are struggling and offer to reduce your tariff depending on how long you are into your contract term. If you are struggling to keep up with paying for your phone, try and lower your monthly tariiff or speak to your provider.

Utility Bills

  • Reach out to your supplier - If you are behind with your energy bills, it is advisable to contact your supplier to discuss affordable repayment options. This could help you avoid getting cut off or disconnected from your supplier.
  • Help and support - There could be various government grants and support schemes available to help if you are struggling, so contact your local CAB for further information and advice. Click here to find out more.

Financial / Debt Review

  • Can be done personally or by a professional - Talk to a Debt Advisor, The CAB, your local debt chairty or contact us at Debt Advice if you are struggling with your debts. or you could even do it yourself. Conducting a financial review could help you get an idea of where your money is going, see where changes can be made, how you can plan for the future, protect your home, deal with your debts and more...
  • Be honest - The only thing you have to do in a financial review is be completely honest of everything you spend, own, earn, pay out and why you might have got into difficulties. This will help you get the best advice possible for your situation.

Need help with your debts?

If you need some help and advice on how to deal with unaffordable debts, click the button below and fill in our contact form. One of our advisors will then contact you to discuss your options.

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