What happens when you’re on an underpayment plan:
We agree to a new, lower monthly payment with you for a fixed period. This may require you to fill in an income expenditure form.
Interest on your loan is frozen while the plan is active, so your balance doesn’t grow because of extra interest during this time.
Because you’re paying less than your normal monthly amount, the unpaid part builds up as arrears.
On your credit file, an underpayment plan is normally reported as an “arrangement”, and any arrears or missed payments may still show and could affect your ability to get credit in the future.
When your plan ends you are able to make up any underpayments you’ve made before the end of your credit agreement with us.
Going on an underpayment plan may leave you at risk of default depending on your arrears position.