How Do I Know If I Have Too Much Unsecured Debt?
You may have too much unsecured debt if your combined monthly repayments on personal loans, credit cards, store cards and overdrafts leave little for essentials, if you use one credit account to pay another, or if you have no buffer for emergencies. A financial assessment can confirm whether you are over-indebted and whether debt review may help.
Key Points
- High combined unsecured repayments are a warning sign.
- Using credit to pay credit signals a problem.
- No emergency buffer suggests over-indebtedness.
- A financial assessment confirms your position.
What counts as unsecured debt?
Unsecured debt is credit not backed by an asset — typically personal loans, credit cards, store cards, overdrafts and short-term loans. These usually carry higher interest rates than secured debt like vehicle finance or home loans.
Because they are not tied to an asset, unsecured debts can accumulate quickly and are a common cause of over-indebtedness.
Warning signs to watch for
Your total monthly debt repayments consume a large share of your income. You use one credit account to pay another. You only make minimum payments. Balances stay high despite regular payments. You have no savings for emergencies.
If several of these apply, you may be over-indebted.
What to do
Start by listing all your debts, interest rates and minimum payments alongside your income and essential expenses. This shows whether your debt is affordable. If it is not, a financial assessment with a registered debt counsellor can determine whether debt review is appropriate.
Acting early — before legal proceedings begin — generally gives you more options.
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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