Estimating DMP Payments and How Long Repayment May Take

MoneyNerd introduces enquiries to The Debt Advice Service and may receive a referral fee. For free, independent guidance and help finding a debt adviser, visit MoneyHelper.

This information and enquiry service is not a full financial assessment or a guarantee of suitability or debt write-off. Debt solutions are not suitable for everyone. Fees may apply, and your credit record and assets may be affected. Get advice on your circumstances before choosing a solution.

A Debt Management Plan payment starts with a realistic budget. This guide explains how to estimate what you can afford and the limits of simple repayment calculations.

In this article, we’ll help you understand:

How to estimate a sustainable monthly DMP offer
The things you need to know before using a DMP calculator.
Why a DMP normally aims to repay the debt rather than write it off
How to find out how long your DMP might last.
The different calculators you can find online.

Free independent debt advice can help you check the budget and compare options before making a payment offer.

The calculation below is an illustration, not a personal recommendation, lender agreement or guarantee of savings.

Let’s get started!

MoneyNerd does not provide debt advice or recommend debt solutions. We can introduce you to The Debt Advice Service, a trading style of Pacific Financial Solutions Limited. Their debt advice is free, and there is no obligation to proceed.

If you request an introduction, we’ll share your details with The Debt Advice Service so they can contact you.

Some debt solutions have fees and may negatively affect your credit rating. MoneyNerd is a commercial introducer and may receive a fee if you go ahead with a debt solution through The Debt Advice Service.

For free, impartial money guidance and help finding free debt advice, visit MoneyHelper.

Computing Payments

Firstly, you have to determine what your monthly income is. Of course, this is much easier if you have a regular, steady income.

On the other hand, if you have an income that varies every month, you might have a little trouble determining how much you earn.

For variable income, review a representative period and budget cautiously for low-income months, tax, seasonal costs and emergencies. An average alone can overstate what is reliably affordable.

You can use that as the monthly income that you earn.

Once you’ve figured out your monthly income, it’s time to figure out what your monthly expenditures look like.

Looking up bank statements for the previous months can help a lot in figuring out how much you spend on essentials every month.

It’s important to note that your payments towards any priority debt(s) that you have need to be included within this category as well. This is because these types of debt can’t be part of DMPs.

Now that you have your monthly income and your monthly expenditure, you can subtract the latter from the former to get your monthly surplus (or disposable) income.

This disposable income is the approximate amount of what you can hope to pay towards your debt repayments each month.

Understand your debt options

MoneyNerd can introduce you to The Debt Advice Service for free debt advice. MoneyNerd does not provide debt advice or recommend debt solutions.

The Debt Advice Service can explain your options, including their benefits, costs and risks. Options available depend on your circumstances. There’s no obligation to take a debt solution.

Get started

MoneyNerd does not provide debt advice or recommend debt solutions. The Debt Advice Service is a trading style of Pacific Financial Solutions Limited. If you request an introduction, we’ll share your details with their team so they can contact you.

For free, impartial money guidance and help finding free debt advice, visit MoneyHelper.

Before any Calculation, You Should Know That…

Debt management plans are informal debt solutions. This means that they are not legally binding.

Furthermore, a debt management plan does not cover priority or secured debts such as mortgage payments, rent arrears, council tax bills, criminal fines, etc.

If you only have these types of debts, you shouldn’t be considering a debt management plan.

If you have a combination of secured and unsecured debts, then you should know that the secured debts you have cannot be included within your debt management plan.

As a result, you’re going to have to make payments to those priority debts separately from your debt management plan.

Thus, when you’re making a payment offer for your debt management plan and determining how much you can afford to pay towards it each month, you need to take the payments towards your priority debts into account.

Of course, the payments you’re going to make towards your priority debts are going to reduce the amount of money you can contribute towards your debt management plan.

You also cannot give your debt management plan higher preference as priority debts have to be dealt with first. This is because they have much more dire consequences if ignored.

When you’re making a payment offer for your DMP, your payments towards priority debt(s) will be a part of your ‘essential living costs’.

» TAKE ACTION NOW: Fill out the short debt form

DMP Comparison

As mentioned earlier, secured debt cannot be included in your debt management plan.

To help you better understand the main differences between a DMP and other debt solutions, I’ve created this quick table.

DMP vs Alternative Solutions	How It Can Help Tackle Debt	Suitable For Individuals…
Debt Management Plan (DMP)	An informal agreement to pay back non-priority debts in a more manageable way, but does not write off any debt.	…seeking a flexible arrangement without legal proceedings.
Debt Relief Order (DRO)	A formal solution that freezes debts for a year, after which they may be written off.	England and Wales: people meeting the current £50,000 qualifying-debt limit and strict income, asset, vehicle and residence conditions. Homeowners are not eligible. A debt adviser must assess eligibility; other UK nations have different rules.
Individual Voluntary Arrangement (IVA)	A formal agreement that may write off eligible unpaid debts on successful completion. Duration, payments and fees depend on the agreed proposal. Credit rating will be negatively affected. Home ownership and equity must be assessed under the proposal; keeping your home is not guaranteed.	…with a larger amount of debt who can commit to a fixed repayment plan and want to avoid bankruptcy.
Bankruptcy	A formal legal process that writes off most debts but has significant consequences, including potentially losing your home and negatively impacting your credit rating and job prospects.	… with significant debts that cannot realistically pay them off. More severe option with substantial consequences.
Consolidation Loan	A consolidation loan involves taking out new credit to pay off existing debts. It can simplify payments and potentially reduce interest rates. But, you could also end up paying more interest overall.	.. with multiple debts looking to consolidate into a single payment, usually with a good credit score to obtain favourable terms.
Payment Holiday	Payment holidays offer short-term relief by pausing or reducing payments. Payment holidays don’t reduce the total debt amount and are usually for a short duration.	..with short-term financial difficulties needing temporary relief from debt payments.
Equity Release	Equity release involves homeowners releasing equity from their property. It provides a lump sum or additional income by using the home’s value but reduces the property’s equity.	Eligible homeowners considering property-based funding after specialist advice. Costs, estate reduction, benefits and future care needs must be assessed; it is not a general recommendation for debt repayment.
Informal Negotiation	Informal negotiation is not legally binding and involves negotiating with creditors for better terms.	…with debts and wish to negotiate terms independently and prefer to have a flexible, non-binding arrangement with creditors.

Get free debt advice to compare options for your country and circumstances. A table cannot confirm suitability.

Determining the Duration

A DMP combines administration of suitable debt payments; it is not a new consolidation loan. Its duration depends on balances, affordable payments, interest and fees. See related guidance.

Many debtors are apprehensive about opting for a debt management plan as they are afraid that it’s going to last an extremely long time.

A DMP can take many years if affordable payments are small. An IVA has different eligibility, costs and consequences; 2025 Protocol proposals normally use 60 or 72 months, not a universal five-year term. See related guidance, related guidance.

Once you’ve figured out what your monthly debt payments are going to be, you can use that value to determine approximately how long your DMP is going to last.

If no further interest or charges are added and the service charges no fee, divide the total included balance by the monthly amount reaching creditors. Round up to a whole month for a rough duration estimate.

For example, £6,000 divided by £100 a month gives 60 months only under those assumptions. Interest, provider fees or payment changes will alter the result.

You may be able to get your DMP provider to make changes to your payments over the years according to your changing financial situation. Due to this, the value determined here is simply an approximation; Not an exact value.

For more debt advice on this, you should contact your debt management plan provider.

Free debt advice is available from StepChange and PayPlan, among others. StepChange is a charity; PayPlan is not a charity, although its debt advice and DMPs are free. See related guidance, related guidance.

You can visit other agencies as well, just make sure they’re authorised and regulated by the Financial Conduct Authority (FCA).

Take the first step towards tackling your debt

Every day, our partner, The Debt Advice Service, helps people understand their options for dealing with debt. Their debt advice is free, with no obligation to proceed.

MoneyNerd introduces you to The Debt Advice Service. We do not provide debt advice or recommend debt solutions.

Very helpful and informative thank you

Get started

If you submit the enquiry form, MoneyNerd will share your details with The Debt Advice Service so they can contact you.

Some debt solutions have fees and may negatively affect your credit rating. MoneyNerd may receive a fee if you go ahead with a debt solution through The Debt Advice Service.

The Debt Advice Service is a trading style of Pacific Financial Solutions Limited.

For free, impartial help and access to not-for-profit debt advice, visit MoneyHelper.

Getting Estimates Online

There are a number of DMP calculators available online that could help you determine a number of different factors, including what your debt payments will be as well as how long your DMP is going to last.

A calculator can also help you understand how much money you’ll be saving if your creditors agree to freeze interest and charges on your debt(s).

For regulated consumer credit, firms must treat customers in or approaching arrears with forbearance. Where an agreed forbearance repayment arrangement is being met, further interest and charges must be reduced, waived or cancelled as necessary to prevent the debt balance rising during that arrangement. This is not an automatic cancellation of all existing interest or charges.

Another thing that sometimes happens in DMPs that doesn’t get discussed a lot is that maybe one or two creditors may not agree to your DMP whereas others would.

A creditor’s refusal does not necessarily mean it must be removed from the plan. Discuss the response, continued proportionate payments and any legal action with your provider.

Use statements and the provider’s review to check each balance, interest and payment allocation. A basic calculator cannot decide the legal or contractual treatment of every debt.

Again, I have to point out that any calculator you use will only give you rough estimates because there are several other aspects that could affect the duration of your DMP.