If you've received a communication from us that confirms your Paydown Plan amount, and you'd like to know more about how the plan will work, please see below.
Alternatively, if you’ve received a communication from us that gives you an estimated Paydown Plan amount and you’d like to know more, please see our article on estimated Paydown Plans.
Why have I received this communication from you?
Prior to this latest communication, you’ll have received one in the last 3 months, letting you know we’re changing the way your minimum payment is calculated. We’re taking these steps to ensure your account doesn’t remain in Long Term Borrowing, and to prevent your account falling back into this status in the future.
This type of long term borrowing is defined by the FCA as Persistent Debt. You can find more information in our article: What is Persistent Debt?
Our previous communication provided an estimated Paydown Plan amount, based on your account balance at that time. As things may have changed over the last 3 months, our latest communication was sent to confirm your Paydown Plan minimum payment.
We’ve put together some questions and answers below, to make sure you’re 100% clear on what this change means for you.
1. Have I done anything wrong?
Please don't worry – you haven't done anything wrong. Paying the minimum amount due is in line with what's required under your credit agreement.
2. I've paid off my existing balance since you sent your last communication – what happens to my account now?
You’ll no longer have a Paydown Plan amount on your account, as you’ve paid off your balance.
However, as your account is still available for you to use, we have a responsibility to ensure your account doesn’t fall back into Persistent Debt. Therefore, if you place any orders or incur any charges on your account going forward, you’ll be required to pay up to 8% of that outstanding balance each period.
Please ensure that you continue to meet any minimum payments requested on your statement.
3. Is there anything I need to do?
You may wish to think about changing the way you make your payments. Please see question 8 for further information.
4. Why is my confirmed Paydown Plan amount less/more than the estimated amount?
The estimate was based on your balance 3 months ago. It’s likely things have changed in the meantime, as a result of the payments you have made and/or the recent orders you have placed on your account, so your Paydown Plan amount has changed to reflect this.
5. Will the Paydown Plan amount change?
No, this payment is fixed and will stay the same for the next 4 years.
If you’d like to pay a higher amount than the figure we’ve provided, please feel free to do so! It’ll ensure your Paydown Plan balance is paid off sooner, and you’ll pay less interest overall.
6. How is my minimum payment calculated going forward?
Your minimum payment will be made up of two parts.
Outstanding Balance - this relates to your outstanding balance shown on your letter/email and will be referred to as a Paydown Plan.
New Spend Balance - this relates to any new orders placed on your credit account after Pyadown Plan starts.
7. What impact will placing further orders have on my minimum payment?
Here’s an example, based on your new spend repayment rate being 8%.
- Please note:
Your individual rate will be confirmed on the communication we sent you.
Your outstanding balance is £1,000 and you've been given a fixed Paydown Plan amount of £40. This will be your new minimum payment and will be shown clearly on your statement.
If you then place an order for £100, the minimum payment for this new spend will be £8 (as your new spend repayment rate is 8% and 8% of £100 = £8).
To keep things simple, this will be added to your fixed Paydown Plan amount, bringing your total minimum payment to £48.
8. What happens to my statement now that my Paydown Plan has started?
We want to keep things as simple as possible, so you'll still only be asked to make one payment each time we send you a statement. The minimum amount we request will consist of your fixed Paydown Plan amount and up to 8% of the balance of any new spend.
9. Do I need to make any changes to how I make my payments?
You can continue to make payments in the same way you do now, but the most convenient way is to set up a Direct Debit.
If you already have a DIrect Debit set up and your current payment is less than the amount requested on your Paydown Plan, your Direct Debit will automatically be adjusted to request your plan.
If you choose to pay by standing order, you’ll need to check that it covers your new minimum payment.
10. Can I still shop with you?
Of course! If it’s still affordable, you can continue to shop with us as before, with the reassurance that your current outstanding balance will be completely paid off within 4 years.
Remember that any further orders will increase your minimum payment.
If you wish to pay your balance off in less than four years, you can do so by increasing your regular payment or making additional payments. This means you’ll pay less interest overall.
11. Now that I’m on a Paydown Plan, is my account out of Persistent Debt?
Your Paydown Plan will ensure your account doesn’t fall back into Persistent Debt – you just need to continue making the minimum payment requested on your statement in full and on time.
12. Will I receive a communication from you when my Paydown Plan has ended?
No, you won’t receive a communication from us once your Paydown Plan has ended.
13. Will my credit file or credit score be negatively impacted by my account being in Persistent Debt?
If you continue to make the minimum payment requested on your statement, your credit file and credit score won’t be affected at all. We’ve put this plan together as part of our duties as a responsible lender; we want to make sure you can pay off your current debt in a reasonable timeframe.
14. What if I can’t afford the new fixed amount either now or in the future?
We appreciate that your new minimum payment may be more than you are used to paying, and that this might make things difficult for you. If you’re worried about your finances and/or struggling to make existing payments, please reach out so that we can help you.
- Chat with us. If no one’s available, you can leave us a message.
- Email: email@example.com
- Phone: 0345 074 2131 (lines are open Monday-Friday, 9am-5:45pm)
15. Where can I get help if I'm worried about my finances?
We work with various organisations who can help support you, including: