Debt on UK Money Explained

Debt-to-Income Ratio UK: What It Is and How to Improve It

Sun, 09 Aug 2026 00:00:00 +0000

Quick answer: Your debt-to-income (DTI) ratio is your total monthly debt payments divided by your gross monthly income, expressed as a percentage. UK mortgage lenders typically want your DTI below 40-45%. A DTI below 36% is considered healthy. Lower is always better for mortgage approval and interest rates.

Debt-to-Income Ratio UK: What It Is and How to Improve It

Your debt-to-income (DTI) ratio is one of the most important numbers a lender checks when you apply for a mortgage. This guide explains what it is, how to calculate it yourself, and how to improve it before applying.

Guarantor Loans UK Explained: How They Work, Risks, and Alternatives

Sun, 09 Aug 2026 00:00:00 +0000

Quick answer: A guarantor loan is a personal loan (typically £1,000–£15,000) where a friend or family member agrees to repay if you can’t. Interest rates are high (30–50% APR) — lower than payday loans but far more expensive than standard personal loans. The guarantor’s credit is at risk if payments are missed. Consider alternatives like credit-builder cards or credit union loans first. Source: MoneyHelper — Guarantor loans.

Guarantor Loans UK Explained

How to Get Out of Debt UK: 7-Step Action Plan for 2026

Sun, 09 Aug 2026 00:00:00 +0000

Quick answer: To get out of debt in the UK: (1) list all debts with balances, interest rates, and minimum payments, (2) sort them into priority (rent, council tax, utilities) and non-priority (credit cards, loans), (3) pay minimums on everything, (4) throw every spare pound at the highest-interest debt first (avalanche method), (5) seek free help from StepChange or Citizens Advice if overwhelmed. The average UK household has £2,300 in unsecured debt — you’re not alone.

Overdrafts Explained UK: Costs, Rules, and How to Get Out

Sun, 09 Aug 2026 00:00:00 +0000

Quick answer: A UK bank overdraft lets you spend more than is in your account, up to an agreed limit. Since FCA rule changes in 2020, overdrafts are charged as a single annual interest rate (typically 35-40% APR) — daily and monthly fees were abolished. Overdrafts are one of the most expensive forms of borrowing. To clear yours: switch to a 0% overdraft account, use a 0% balance transfer card, or pay it down £50/month. Source: FCA — Overdrafts.