FAQs - Checking eligibility

Can I get car finance on a Debt Management Plan?

Sam Wooller, Customer Experience Communications Manager
Wednesday, 07 December 2022

Yes, you can still apply for car finance with us if you’re in a Debt Management Plan (DMP). Just be aware that being on a DMP may impact your credit score, which could affect your eligibility for car finance.

As with all of our applications, we will run checks on your affordability using a soft search. If your credit file and affordability fit our criteria, then we might be able to give you the finance you need.

What is a Debt Management Plan (DMP)?

A Debt Management Plan (DMP) is an agreement between you and your creditors (the people you have the debt with) to pay all of your debts. You can arrange them yourself but they are typically done through a licensed debt management company.

Non-priority debt can only be included in a DMP. These might be things like credit cards, store cards, loans or other similar debt.

How does a DMP affect my credit score?

Getting a DMP means you could be paying less than the minimum repayment amount you agreed to when you initially took the debts out. Some creditors will add markers to your credit file that indicate a DMP or ‘arrangement to pay’ is in place. In that case a DMP would impact your credit score.

Depending on the nature of your DMP, if any court action, missed payments or defaults were involved, then these would also impact your credit file and are recorded for 6 years.

Car finance while on a DMP

While you’re on a DMP, you might find it difficult to get finance. This is usually for two reasons.

The terms of your DMP might mean that, if you have the money to get car finance, you have to pay off your debt quicker or make a full and final settlement on your debts. Check with your DMP provider as they will be able to help you if getting a car is a necessity.

Having a DMP means you’ve struggled to make repayments before, so lenders will view you as riskier to lend money to. It is possible to get car finance while on a Debt Management Plan. You may have been refused elsewhere, but don’t worry.

That’s where a specialist lender like Moneybarn can help. We help thousands of customers each month get into the car they need. We’re experts in bad credit and understand that just because you’ve had problems in the past, you still need a reliable car whether to take your children to school or to commute to your job.