For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.


Can I Pay My IVA Off Early?

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Can I Pay My IVA Off Early? – Complete Overview, FAQs, Tips & More

Having an active IVA listed on your credit report can be rather concerning, especially if you’re looking to get a new loan.

You may be wondering if it’s possible for you to get rid of your IVA early, provided that you have a sum of money available that allows you to do so.

I’ve compiled a guide that discusses this situation, along with an FAQ section for added clarity.

Let’s get right to it.

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Is It right to Settle Your IVA Early?

You may be pleased to learn that it is certainly possible to repay your IVA off early.

This is a good opportunity for most people, since they get to be released from the financial constraints of an Individual Voluntary Arrangement.

The question is whether you should settle your IVA early, provided that you have the choice available to you.

I’m going to list some advantages and disadvantages of settling an agreement earlier instead of at the scheduled time of expiry.

Let’s get right into it.


  • You’ll no longer be bound by the varied financial constraints of an IVA, such as an upper limit on how much you can borrow, or requiring the consent of your insolvency practitioner before engaging in various financial activities.
  • Even if you don’t get the required permission to repay your IVA off early, you’ll still be able to make a payment a month on it as you were already doing.
  • You’ll be able to get a head start on rebuilding your credit score. Since you won’t be under the constraints associated with IVAs, it may be a bit easier to rebuild your credit profile.
  • Certain opportunities, such as your ability to get a mortgage, will improve considerably once you’re not bound by an IVA.


  • Regardless of whether you pay the IVA off early, it will continue to be listed on your credit report for at least six years after it first became active.
  • You may find that even if you’ve put resources towards settling the agreement early, certain lenders will continue to be wary of you as long as the IVA is still listed on your credit file.
  • Another issue that you may face is that you may not be able to get lump sum loans. So if you’re looking to make payments towards your agreement off early to increase your chances of getting a lump sum loan, it may not work out for you.
i v a what is the iva what is an iva

Why Would You Want to Settle Your IVA Early?

There are several reasons why you may want to settle your agreement early.

Maybe you’ve come across a big sum of money that you weren’t expecting, and you’ve decided that you want to pour it into your IVA. 

If that’s the case, it may be a good idea to keep your monthly income coming in and not have a substantial portion of it go to your IVA each month.

Other than that, if you’re looking to get a mortgage or a remortgage loan, you may find it easier to do so once your IVA is no longer pending.

The reason why that is is because lenders lend to parties that have the least risk involved. If you’re someone who has a mediocre income and two sources to make payments to (your IVA and another loan that you aim to borrow), several borrowers may see you as an unreliable investment.

On the other hand, if you don’t have IVA monthly payments to give, and if lenders see that you’ve accumulated enough revenue to repay your IVA off all at once, they might assume that you’re a lot more financially responsible now as opposed to when your IVA was unpaid.

In the business world, it’s all about what image you present. If you give off a vibe that screams financial security, lenders will rush towards you.

Other than that, it frees you from a lot of the financial constraints that IVAs come with. You get a lot more financial mobility. You don’t have to ask your insolvency practitioner for permission to do a lot of things.

Being free from tiresome financial constraints can be a blessing for many, particularly for people looking to start a business or engage in some other financial activity.

How Do I Settle My IVA Early?

This section will cover how you can settle your IVA early.

Let’s get right into it.

Lump Sum Payment 

The first way to settle your IVA early is a lump sum payment.

The way settling IVAs work is that you offer your creditors a lump sum payment equivalent to the total unpaid amount you have left on your IVA, as opposed to monthly payments.

If your creditors accept your proposal, they’ll agree to waive off the monthly payments and accept a single large payment from you. This means an early settlement for you and an early settlement for your creditors.

If you want to get your proposal approved, you’ll have to consult with your insolvency practitioner.

Remember, your insolvency practitioner is someone who wants to help you get out of debt. Take your proposal to your practitioner and have them evaluate if they think creditors will approve it.

As for the specifics, settling IVAs before they are due is usually seen as a change to the terms of the IVA. The rules, in that regard, state that the creditors to whom you owe 75% of your total debt have to agree to the change before it becomes a part of the IVA.

Negotiations with Creditors 

The next step to paying IVAs off early is to negotiate as clearly and as honestly as possible with your creditors and inform them of your situation.

Most creditors may be willing to accept large payments at once if you pitch it to them the right way.

You need to inform them of how your circumstances have changed and how you paying them back early will be mutually beneficial for both parties.

Inheritance Money

Other than that, if you happen to inherit money from a relative or a family property, you may be able to use it to pay off your agreement, even through monthly payments.

This is fairly common, as it turns out. Lots of people with debt don’t really have a clear vision of what to do with sudden inheritance money, other than using it to contribute towards their debts.

If that is indeed the case, and if you don’t have any other serious financial obligations to fulfil, you should consider pooling your inheritance money towards your agreement payments as well.

Sale of an Asset

If paying IVAs off early means a lot to you, or if you think it will benefit you in the long run, you may use money that you receive from selling an asset of yours, such as a car, or maybe even property you own to pay it off.

Paying the agreement off early will do wonders for your financial freedom, and if you’re someone who is deeply invested in the corporate world, financial freedom will be a top priority of yours.

How Much Does It Cost?

This part isn’t too technical, or at the very least, it isn’t supposed to be.

Simply put, the costs of paying back your IVA early are just the costs you pay each month towards the IVA and the remaining number of months that you have to keep paying.

For instance, if you pay $100 a month and you have 30 months left until your IVA expires, your total payment should be somewhere around $3000.


Does Setting off my IVA Earlier Improve my Credit Rating?
Yes, if you settle an IVA early, you can start working on your credit score much earlier than usual. Basically, you get a head start on how quickly you can start improving your credit rating. When you’re still bound by IVAs, it can be difficult to focus on various key areas of financial responsibility. You may also want to look into whether you can cancel your agreement. On the other hand, if you settle your IVA off quickly, it allows you to focus on what really matters to lenders and other financial institutions; your credit file.
Can I Hide Money From IVA?
I strongly recommend that you don’t do this. You may face legal action and even jail time if you’re actively committing fraud in matters pertaining to your insolvency solutions. Even if you don’t face court action, hiding money from your IVA could lead to you being hounded by your creditors and debt collection agencies, depending on the circumstances.

Wrapping It Up

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Paying your Individual Voluntary Arrangement off early can pose advantages and disadvantages depending on what your circumstances are and what you aim to do once you pay your IVA off.

This guide explored the various facets of such a situation and how you may respond to each of them.

If you need any more debt advice, feel free to reach out!

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