What Happens If I Cannot Afford My Personal Loan Payments?
If you cannot afford your personal loan payments, the worst response is to ignore the problem. Contact the credit provider to discuss options, and consider a financial assessment to determine whether debt review may be appropriate. Acting early — before legal proceedings advance — generally gives you more options than waiting until summonses arrive.
Key Points
- Do not ignore unaffordable loan payments.
- Contact the credit provider to discuss options early.
- Consider a financial assessment for debt review.
- Acting early preserves more options.
Why ignoring the problem is risky
If you stop paying without communicating, the account falls into arrears, the credit provider may hand it to debt collectors, and legal proceedings can follow. Arrears and legal action can significantly worsen your financial position and limit your options.
Credit providers are generally more willing to engage constructively before matters escalate.
What options might be available?
Depending on your circumstances, options may include renegotiating the repayment term directly with the provider, consolidating where you qualify, or entering debt review if you are over-indebted across multiple accounts.
Each option has different implications. A financial assessment helps you understand which is appropriate for your situation.
When is debt review appropriate?
Debt review is designed for consumers who are over-indebted — meaning their income is insufficient to cover both essential living expenses and their total monthly debt repayments. If your personal loan is one of several unaffordable debts, debt review may be appropriate.
A registered debt counsellor can assess your finances and advise whether you meet the requirements.
Frequently Asked Questions
Worried That Your Debt Has Become Unaffordable?
Debt Guidance can assess your income, essential expenses and debt commitments to determine whether debt review may be appropriate.
Reviewed by Carolina Guevara Harris
Registered Debt Counsellor · NCRDC3152
Last updated: 17 September 2025
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