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Getting into Debt – What to know

25th October 2023

By Ben Walker

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Getting into debt can be frighteningly easy. There are many different types of debt, and different ways you can get into them. This guide will go into some of the more common ways you may get into debt, and how you may be able to better prepare against it. 

It’s an old fashioned adage but, to avoid getting into debt, don’t spend what you can’t afford and put 10% of your net income away each month to save for a rainy day – it always rains in the UK at some point.

Low income

One of the most common causes of debt is low income. If you aren’t making much money, it can be incredibly difficult to balance the bills while maintaining your standard of living. If you’re living paycheck to paycheck, it can be hard to put some money aside for a rainy day. This means that any big, unexpected bills can be very hard to deal with.

Job loss

A job provides regular money coming in, giving you security and a bit more financial freedom. So, the sudden loss of this income could mean that something as simple as putting food on the table becomes a challenge. 

Having savings built up or good insurance can help you deal with these costs. But, in some cases you may have to rely on credit cards or debt services. These are decisions that shouldn’t be made lightly, but rather as a last resort.

Living beyond what your earn

This is the fastest way to get into debt. Though it may not always be possible, living within your means will prevent you from building debt. For example, bike to work instead of drive, or instead of buying a brand new TV on finance, buy a second hand one. While the quality may not be as good, there are plenty of bargains on the market. Another big area is cooking at home instead of going out for food and buying non branded groceries. By doing all of this and more, you could end up saving extra money. For more ideas on saving, read the Savings section in this guide.


If you don’t have a budget that you follow, it becomes much easier to lose track of your money. If this happens, the chances are you’ll spend more than you can afford. Keeping a budget will help you manage your money, and keep track of how much money you have in your account. For more information on budgeting, go to the budgeting section of this guide.

Overusing credit cards

Often, a credit card can seem very tempting as many offer interest free periods, or other benefits. However, in many cases these free periods are followed by a massive interest increase. This means that if you don’t keep up with repayments, you could end up paying a lot in interest.

If you have multiple credit cards and are struggling to keep up with repayments, you should look into debt consolidation to help. This could allow you to better manage your debt and lower your monthly payments. For more information on credit cards go to the Credit Card section of this guide.

Payday loans

A payday loan might help you over a hump but the interest rates are exceedingly high. This can lead you into a spiral of not being able to repay your debts which increases the interest further. Before long your ability to meet the costs of debt is out of control unless you have a guaranteed lump sum coming your way to help deal with it. Payday loans are widely marketed on TV but should be avoided if possible. They also damage your credit history.

Student Debt

Student debt is very common nowadays. University and studying is expensive, with the majority of students needing a loan to afford it. Not only is studying expensive, but more often than not, students need a loan to cover living costs too. This means that over 3 years of university, students can build up to £60,000 of debt.

However, repaying student debt works differently to repaying other debt. In this situation, a small portion of your wage is taken off to repay it. Additionally, if you took out this loan after 2012, you only start to repay this loan if you meet the income threshold. The threshold is either £524 a week, £2,274 a month, or £27,295 a year (all before tax). For more information on repaying your student loan click here.

Unforeseen costs

A major reason many people get into debt are unforeseen costs. It is impossible to predict and prepare what these costs may be. They could range from replacing a boiler to falling ill, and not being able to keep up with your costs. As you can’t prepare for any exact situation, the best policy is to prepare for the worst. This can include having insurance that will cover major costs, and trying to save up some money that can help cover extra costs.

Healthcare costs

In the UK, we are very lucky to have the NHS for healthcare, but sometimes the NHS can’t help. If your health deteriorates and you need to pay for extra medication or assistance, it’s important to have some savings set aside that can cover these. If you aren’t able to cover these rising costs, it’s important that you talk to a debt support charity. They may be able to help you, or direct you to any benefits you could be able to claim.

Getting into debt happens to lots of people, but can still be an incredibly difficult experience. But, there are routes out of it, and charities that could give you help and advice. 

Click here for the National Debtline

Click here for StepChange

Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status. We may receive commissions that will vary depending on the lender, product, or other permissable factors. The nature of any commission will be confirmed to you before you proceed.

More than 50% of borrowers receive offers better than our representative examples

The %APR rate you will be offered is dependent on your personal circumstances.

Mortgages and Remortgages

Representative example

Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

Secured / Second Charge Loans

Representative example

Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

Unsecured Loans

Representative example

Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.



Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

Authorised and regulated by the Financial Conduct Authority – Number 681423
The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages


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