Featured in...

Getting A Loan with an IVA: Simply Explained

Are there any loans for people with an IVA? We answer this question and other questions about taking out credit during and after an IVA. Find clear answers below.
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Do you have questions about IVA loans? Are you worried about paying off debt? You’ve come to the right place. 

We understand that dealing with debt can be hard. But don’t worry; you’re not alone. Every month, over 170,000 people visit our site looking for guidance on debt solutions.

In this easy-to-read article, we’ll talk about:

  •  What an IVA (Individual Voluntary Agreement) is and how it works
  •  How an IVA can change your life
  •  The good and bad things about an IVA
  •  How an IVA can affect your credit rating
  •  How to get credit, like a loan or a credit card, during and after an IVA

Our team has lots of experience with debt problems. We know how it feels to deal with them, and we’re here to help you understand your options.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

What exactly is an IVA (Individual Voluntary Agreement)?

An Individual Voluntary Arrangement (IVA) is a type of insolvency used to help people get out of unsecured debt they cannot afford to repay in a reasonable time. 

It commits the debtor to make monthly repayments, which are split between all creditors based on how much is owed to them. The monthly IVA payments last for around five before any remaining debt is written off. 

An IVA must be set up by a licensed professional. Generally, this will be an Insolvency practitioner (IP).

Only use a service provider that is authorised by the Insolvency Practitioners Association. You can read more about how an IVA works in our master IVA guide

Am I eligible for an IVA?

In order to qualify for an IVA, there are some requirements that you need to meet.

First of all, you need to show that you have some disposable income at the end of each month. This means that you have money left over once all of your essentials are covered.

If your leftover money is less than £100, you will probably find that your IVA application is rejected. An IVA agreement where you pay less than £100 will usually be rejected by your creditors.

Even if you do not have £100 left over each month, you may still be able to get an IVA by paying your creditors in a lump sum. This is a great option for those with a few high-value items that they can sell, or those who have come into some money.

From my experience, people on benefit-only incomes will struggle to get an IVA. This is because their income is fixed and there isn’t usually a £100 spare.

Most IVAs are for people who owe thousands of pounds of unsecured debt to more than 1 creditor. If your circumstances are different you will probably find that an alternative debt solution will be best for you.

Keep in mind that an IVA is not for everyone, even if you are eligible. The fees for an IVA can be as much as £5,000 and will be paid in instalments with your monthly debt payment.

How does an IVA affect your life?

An Individual Voluntary Arrangement affects your immediate future by putting you under spending restrictions. For the duration of the IVA, you’ll only be allowed to spend money on expenses deemed essential to maintain a decent standard of living. You won’t be allowed to buy luxury items etc. 

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get started

What are the pros and cons of an IVA?

There are several advantages to getting an IVA.


Creditors can’t contact you

First of all, your creditors are legally forbidden from contacting you again. Even if they had sent your case to a debt collection agency!

As soon as your IVA is formalised, your creditors can’t contact you in any way, shape, or form. And they can’t send someone else to you either – no more bailiffs!

Debt write-offs

Once your IVA has ended, any debt that you haven’t paid yet gets written off.

This means that you leave your IVA 100% debt free, regardless of how much your monthly payments were and how big your debt was.

Keep your assets

One of the major advantages of an IVA over other debt solutions is that your home and car are usually left alone.

If your house has a lot of equity, you may need to remortgage some of it as part of your IVA terms. But you will not be required to sell it or any of your belongings.

You will not be made to sell your car to pay off some of your debt if you can show that you need it. This can be as simple as using your car to commute to your job.

Make one payment

If you have more than one creditor, keeping track of different payments can be complicated. But once you have an IVA, you just make one payment that gets spread out amongst your creditors.

Keep in mind that you will only ever have to pay what is affordable and each IVA is assessed individually. This means that your monthly payment could be as little as £100 even if your debts are substantial.



There are some eligibility criteria for an IVA that not everyone can meet. You must have some spare income at the end of each month, and usually, your debt will need to be thousands of pounds and unsecured.

Your application is unlikely to be accepted if your circumstances are different. An alternative debt solution will probably be better.

Credit Rating

An IVA is noted on your credit file and will stay there for 6 years. Most IVAs last for 5 years so it will be visible for another year after you’re done. You will probably find it difficult to secure any credit for the first 12 months after your IVA.

Monthly payments

You must make all of your monthly payments if you have an IVA.

Any missed payments could cause your IVA to fail. This means that all of your creditors could come after their debts at once!

IVA payments are worked out using your income so it is unlikely that you will fail a payment. However, it is essential that you inform your Insolvency Practioner (IP) of any changes in your financial circumstances. This will help make sure that you can always afford to pay monthly IVA payments.

» TAKE ACTION NOW: Fill out the short debt form

How does an IVA impact your credit rating?

An IVA severely damages your credit score from the date it’s approved, making it difficult to get approved for credit. It will also be visible on your credit file.

But your IVA will only be noted on your report for 6 years. This usually means that it is still visible for the first 12 months after it finishes. After that, your IVA will no longer be visible to any creditor and you should be able to improve your credit score.

Keep in mind that a bad credit rating shouldn’t really be an issue for you now. If you are considering an IVA, you have debts that feel unmanageable, so it is only a matter of time before your credit score is dragged down – if it isn’t already!

Completing an IVA term will help get you back on your feet and let you rebuild your credit debt-free.

Can you get credit while in an IVA?

Most IVAs will allow the debtor to apply for credit up to £500, although some agreements may not allow this. There might be a clause that states you need permission from your Insolvency Practitioner to take out more than £500 or to take out any credit at all.

What credit aren’t you allowed to take out on an IVA?

In most cases, you can never take out further credit of more than £500 while paying into an IVA. Some IVAs won’t allow you to take out any credit at all.  

Am I allowed to take out loans during an IVA?

You’re likely to be allowed to apply for a loan of up to £500 without asking for permission from your Insolvency Practitioner. 

However, you should check that this is allowed and ask for permission whenever you’re required to do so. 

When permission is required, it can be extremely difficult to convince your Insolvency Practitioner that you should be allowed to apply for a loan. 

Any loan you’re approved for during the IVA will usually come with high interest, meaning you’ll be asked to pay more back than usual.

Can I get a credit card with an IVA?

Again, it’s not impossible to be approved for a credit card with a balance of up to £500 without permission – but it can be complicated and difficult due to your poor credit rating

Ask yourself why you need additional credit during this time. If circumstances have changed and you’re struggling to keep up with IVA repayments, make your IVA supervisor aware. They might be able to lower the repayments so you don’t need a loan or credit card. 

Can you pass a credit check with an IVA?

It’s not impossible to pass a credit check with an IVA, but it’s certainly a lot more difficult. 

Borrowing options for individuals under an IVA are almost non-existent, as are credit opportunities during an IVA.

Individual lenders can use their own benchmarks when assessing credit scores to take out their loans, credit cards etc. Just because you might not pass a credit check with one lender, doesn’t always mean you’ll be rejected for credit with another. 

Some lenders specialise in providing credit to people with a poor credit score – albeit at higher interest rates. So you might want to consider bad credit lenders when searching for credit with a current or previous IVA.

IVA loans for individuals with bad credit are not easy to get for a reason – you are already struggling to manage your debts. Think carefully about how much you need a new loan before you get into more debt.

Can I get a guarantor loan if I have an IVA?

Getting a guarantor loan while using an IVA isn’t impossible but it’s extremely difficult and highly unlikely to be approved. 

Can I borrow money from family and friends during my IVA?

Similar to the rules for loans, you cannot borrow more than £500 from family or friends during the IVA. This is because you will need to pay family or friends back and could show preferential treatment to repaying loved ones over your creditors. 

What car finance options are available to me during my IVA?

You can usually take out car finance while on an IVA if your Insolvency Practitioner provides you with permission to do so. 

The Insolvency Practitioner is likely to give you approval for the car finance agreement if you need a car to help you maintain employment. 

Many car finance companies will accept people with an IVA, but they will need to see permission from your IVA provider.  

Who will lend me money with an IVA?

Very few lenders will offer you credit when you’re still paying off an IVA. There are some lenders who specialise in lending to people with bad credit, also known as bad credit lenders. 

Could I enter into a salary reduction scheme during my IVA?

You might be able to use a salary reduction scheme during an IVA, but it will be assessed by your IVA provider first. 

For example, you might reduce some of your salary for a season transport pass to take you to and from work, saving you more money than the amount of your monthly salary you’ve sacrificed. Doing this would be financially beneficial and therefore likely to be approved. 

How long does an IVA stay on your credit file?

An IVA stays on your credit file for six years from the date it was approved. After six years, the record of the IVA automatically gets deleted from your credit report, so you won’t have to do anything. 

How to improve your credit report after an IVA

There are lots of ways to improve your credit score after an IVA. But the simplest method is to manage your personal finances effectively. Keep paying your bills and any other existing debts on time. 

You don’t have to take out further credit and repay it on time to improve your score.

Can I get a loan after an IVA?

You can apply for a loan of any amount after an IVA and will not need any type of permission from your IVA supervisor. 

However, getting a loan after an IVA has ended can still be difficult. Just because the IVA might be removed from your credit file doesn’t mean your credit score will be acceptable to lenders. 

How long after an IVA can I get a loan?

It’s technically possible to get a loan as soon as the IVA has ended, but it will be difficult due to your recent credit history. Any loan you get approved during this period will likely come at an eye-watering interest rate. 

It can be beneficial to delay trying to take out any credit until you have improved your credit score, which may take a few months to over a year. 

Can I get a mortgage after an IVA?

Yes, it’s possible to get approved for a mortgage after an IVA has ended. But you might want to improve your credit report before applying. This will improve your chances of getting the mortgage and it will help you secure a better mortgage deal with a lower interest rate. 

You will probably not be able to get a mortgage during your IVA. This is because the terms of an IVA mean you have to use as much of your disposable income as possible to pay off your debts. This means you won’t have enough money to pay for a mortgage.

Letting your IVA finish and then trying for a mortgage will be far easier and healthier for your credit file.

The rules on remortgaging are a little different.

Sometimes you may need to remortgage your home to help pay off your debts. Your IP will be able to value your home and tell you if this is a viable option. Keep in mind that paying some or all of your debts with a lump sum can be made part of your IVA terms.

Is there such a thing as IVA debt consolidation?

An IVA is considered somewhat of a debt consolidation method. But an IVA could be consolidated further by using an IVA early settlement loan.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.


I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

Get started

Reviews shown are for The Debt Advice Service.

What is an IVA early settlement loan?

An IVA early settlement loan is a type of loan offered to people who are usually more than halfway through their IVA. It offers them enough credit to pay off their IVA early, meaning they will then need to pay back the loan rather than pay into the IVA. 

Paying the IVA early settlement loan might be more expensive, but it will free the debtor from the conditions and restrictions of using the IVA. An IVA also offers more flexibility to decrease payments if your income reduces, which an IVA early settlement loan doesn’t.

Always make sure the early settlement loan is affordable and worthwhile before proceeding with this option. You may need debt advice from a charity first.

Are there alternatives to an IVA?

In short, yes, there are several debt solutions available that may be more suitable to your financial circumstances.

Debt Relief Order (DRO)

A DRO is a good option for people with debts but no disposable monthly income.

Like an IVA, your creditors can’t contact you while you have a DRO which typically lasts a year. After 12 months, you may be able to write off your debt if your financial situation has not improved.

Debt Management Plan (DMP)

A DMP is an informal agreement where you negotiate with your creditors to lower your repayments, usually by asking your creditors not to charge you interest for a set time. When you are discussing a repayment plan you need to be mindful of your finances – only agree to pay what you can afford!

Debt Consolidation

Debt consolidation is a good option for those with multiple debts. Combining all of your debts into one monthly payment makes your finances easier to manage. You may even be able to pay less in interest with a debt consolidation agreement.

Trust Deed

A Trust Deed is an IVA alternative for people living in Scotland who are more than £5,000 in debt. Someone is put in charge of your finances and they distribute your money and repayments amongst your creditors. This is done for an agreed time frame and then any remaining debt can be written off.


Finally, there is bankruptcy. Bankruptcy is a serious financial situation that should not be taken lightly. However, it may be your only option if the value of your debts is more than the value of everything you own.

If you are considering bankruptcy, I recommend talking to a professional who will be able to advise you and work out if it is the best option for you.

Can I get scammed with an IVA?

Unfortunately, there are some companies that take advantage of people struggling with money and will offer services that are actually just scams.

From my experience, these scam companies operate in a similar way. Knowing how to avoid fraudulent services will help make sure you get an IVA from a legit company!

  • Pressure you to sign an agreement: An IVA is a legally binding document and a legitimate IVA company will give you time to read through your agreement and understand it. If you are being pressured to sign be very wary as they may not be 100% legit.
  • High fees: While proper IVAs do have fees, these are included in your monthly payment. A company charging high upfront fees is suspicious.
  • Unsolicited offers: Be cautious with any company that reached out to you with an IVA suggestion. Generally, you need to approach an IVA company to start the IVA process.

I always recommend that people do their research before applying for an IVA. Knowing what reputable companies are out there is an easy way to avoid getting scammed.

Who can help?

There are several organisations that can offer free individual advice to help you work out if an IVA is best for you. You may even find out that there is an alternative debt solution that would be better for you.

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.