How to calculate your repayments

Repayment formula

The simplest way to calculate your repayments to each lender is to:

1. Take the amount you owe to a lender
2. Multiply by the total amount available to pay all your lenders
3. Divide this by the amount owed to all your lenders in order that each receives a fair share of what is available; known as pro-rata payments

Repayment example

Once you have worked out how much you can afford to pay each of your lenders you can write to them, enclosing your Budget Plan and offering your reduced repayment. You'll find a letter template to help you in our budget planner & letter templates section.

Next steps

Start your reduced payments to your lenders even if they haven't replied or they have turned down your offer. If your lender takes you to court, this will show that you're committed to repaying your debts, which will help your case.

If you have a loan or overdraft with the bank or building society that provides your current account, they could continue to take the full payment. This may affect your ability to make reduced payments to your other lenders, so it is advisable to move your current account to a bank or building society where you have no outstanding debt.