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Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
Borrowing while on a debt management plan (DMP) is possible in the sense that no law stops you applying for credit, but it’s difficult in practice and generally discouraged. A DMP exists to reduce debt you already have, so taking on new borrowing while it’s running works against that purpose, and most providers, along with common sense, steer people away from it.
Why is borrowing on a DMP generally discouraged?
The whole basis of a DMP is that your existing income doesn’t stretch far enough to meet your original credit commitments in full, which is why a reduced, affordable payment was agreed instead. Taking on new borrowing on top of that assumes there’s spare capacity that the DMP’s own budget says doesn’t exist. If it turns out there is spare capacity, it’s usually better used to pay down existing debt faster, which shortens the DMP, rather than to fund new borrowing.
Most DMP providers make this explicit when the plan is set up, and some ask you to avoid applying for any new credit, including credit cards, loans, overdraft increases and buy now pay later, for as long as the plan runs.
Would a lender approve you anyway?
It depends entirely on the lender and the type of credit. Mainstream lenders generally look unfavourably on an active DMP alongside a new application, both because of the existing account markers it may have caused (defaults, missed payments, arrangement to pay entries) and because the DMP payment itself is a committed monthly outgoing that reduces what a lender calculates you can afford elsewhere.
| Type of borrowing | Typical difficulty while on a DMP |
|---|---|
| Mainstream credit card or personal loan | Generally difficult, most mainstream lenders will decline |
| High-cost short-term credit | May be available but often expensive and risky, generally best avoided |
| Mortgage or remortgage | Harder, but not automatically ruled out, depends on full affordability and credit history |
| Further advance from your current mortgage lender | Depends on the lender’s own criteria and your affordability at the time |
| Guarantor or family loan | Not reported the same way, but still adds a commitment on top of the DMP |
This is a general pattern, not a fixed rule, since every lender sets and can change its own criteria.
What happens to your credit file if you apply anyway?
Applying for most forms of credit triggers a hard search, which is visible to other lenders and stays on your file, typically for around 12 months, whether or not the application is successful. If you’re declined, that decision itself doesn’t appear on your file, but the search does, and several hard searches close together, especially alongside an active DMP, can be viewed with caution by some lenders looking at a later application. Our guide on whether a DMP affects your credit score explains the underlying markers in more depth.
What if you’re struggling and think you need to borrow?
If money is genuinely tight enough that you’re considering new borrowing to get by, it’s worth going back to your DMP provider first. They may be able to arrange a temporary token payment, reducing what you pay into the plan for a short period, rather than you taking on new debt that could make your overall position harder to resolve. Our guide on what happens if you stop paying a DMP explains why letting payments simply lapse, without contacting your provider, tends to make things worse rather than better.
What it means for a homeowner who wants to remortgage or raise money
If you’re a homeowner on a DMP and need to raise money, a remortgage can look like an obvious route, since it’s secured against your home and can sometimes offer more favourable terms than unsecured borrowing. That comes with a real trade-off: money raised this way, whether to fund something new or to consolidate the debts in your DMP, becomes secured against your home, and a longer mortgage term can mean paying considerably more overall even where the immediate monthly figure looks manageable.
Whether a remortgage is realistic at all while on a DMP depends on your current income, outgoings including the DMP payment, and what your credit file shows. Our page on remortgaging with an active debt management plan covers what a lender or adviser typically wants to see, and our page on debt consolidation remortgages explains the risk of securing previously unsecured debt in full. This isn’t a decision to make on cost alone; independent advice matters here.
Are there alternatives to new borrowing while on a DMP?
Often, yes, and it’s worth exploring them before applying for credit or assuming a remortgage is the only option. Reviewing your DMP payment with your provider, checking you’re claiming all the benefits or support you’re entitled to, and speaking to individual creditors about a specific short-term problem can sometimes resolve a temporary cash gap without adding new debt on top of what’s already being managed. Our guide on what is a debt management plan covers how the plan itself can flex when your circumstances change, which is often a better starting point than looking for new credit.
Getting advice before borrowing further
If you’re on a DMP and thinking about new borrowing of any kind, including a remortgage, it’s worth speaking to a free debt adviser first. MoneyHelper, StepChange and National Debtline can help you look at whether borrowing more genuinely improves your position, or simply adds another commitment on top of debts you’re already working to clear.
Frequently asked questions
Will a DMP provider let me apply for a loan?
Most providers strongly discourage taking on new borrowing while a plan is running, since it works against the purpose of the DMP, which is to reduce your existing debt rather than add to it. Some providers may ask you not to apply for further credit at all while on the plan.
Can I get a mortgage while on a debt management plan?
It's harder than with a clear credit file, since lenders will see the ongoing DMP payment as a committed outgoing and any related account markers on your file, but it isn't automatically ruled out. It depends on your overall income, outgoings and how the rest of your credit history looks.
Does applying for credit while on a DMP affect my score further?
It can. A credit application usually triggers a hard search, visible to other lenders, and if you're refused, that refusal itself doesn't show on your file, though the search does, and several searches close together can be viewed with caution by some lenders.
What if I need to borrow for an emergency while on a DMP?
Speak to your DMP provider or a debt charity first, since taking on further debt while already managing existing debt can make your situation harder to resolve, and there may be other forms of support, including reviewing your DMP payment temporarily, worth exploring first.