Overdrafts, store cards and catalogues
The contractual payment for these debts is 5% of your balance. This is an estimate of the amount you need to pay to cover your minimum payment plus extra to pay the debt off in a reasonable time.
For example, if you owe £3,500 on your store card we’ll put your contractual payment as £175.
The minimum payment on your store card, catalogue or overdraft might be different to this but we use 5% to make sure that all your catalogues, store cards and overdrafts are treated in the same way.
We use 5% as this is the average amount for contractual payments on overdrafts, store cards and catalogues across the industry.
The contractual payment for these debts is 3% of your balance. This is an estimate of the amount you'd need to pay to cover your minimum payment plus extra to pay the debt off in a reasonable time.
For example, if you owe £6,250 on your credit card we’ll record your contractual payment as £188 (3% would be £187.50 but we always round up to the nearest pound).
Your minimum payments might be lower than this but by using this 3% we know that all of your credit cards are being treated the same.
We use 3% as this is the average amount for contractual payments on credit cards across the industry.
If you’ve got a payday loan the contractual payment will be the same as your outstanding balance.
For example if you’re payday loan balance is £450, your contractual payment will be £450.
This doesn’t mean that your payday loan will be treated as a priority; it just means we get an accurate picture of your situation and whether you can afford the payments you’re being asked for. Once you’re on a DMP the payment your payday loan receives will be based on 5% of the balance so they aren't treated any differently than your other creditors.
Personal, doorstep and short term loans and other debts
If you’ve got a personal loan or any other type of unsecured debt your contractual payment will be the amount you agreed to pay back each month.
For example, if you took a loan out for £10,000 and you agreed to pay back £200 a month when you took the loan out your contractual payment will be £200.
If your contractual payment varies we'll use an average of the different payments you've been asked to make. If you aren't sure what your contractual payment is then we'll use 5% of your balance instead.