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When is debt reasonable, and how fast should you pay it off?

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UKUpdated 6 October 2026 · Written by BuyMeWhiskey Editorial Team · How we check facts

Debt is reasonable when it's affordable, has an end date and is cheap or income-linked, like a mortgage or student loan. Pay priority debts first, then clear high-interest cards and overdrafts as fast as you can; for cards in persistent debt, the FCA expects repayment over a reasonable period, usually three to four years.

List every debt with its interest rate, then use the debt payoff calculator to see how much faster a higher monthly payment clears it.

Open the Debt snowball vs avalanche calculator

When debt is reasonable

Not all debt is a problem. Borrowing tends to be reasonable when it's:

Affordable: you can pay it from your normal income without missing bills or borrowing more to cover it.
Planned, with an end date: a fixed-term loan or mortgage, rather than a revolving balance that never goes down.
Fairly priced: the interest is low, or the debt works differently from normal borrowing. UK student loans on Plans 1, 2, 4 and 5 are a good example. GOV.UK says repayments depend on your income, not on how much you owe (9% of income over your plan's threshold), so they behave more like a tax than a credit card.
For something lasting: a home, education, or a car you need for work, rather than everyday spending.

Debt becomes a warning sign when you're only making minimum payments, using credit to pay for essentials or other debts, or the balance isn't falling.

How fast should you repay?

There's no single right speed, but context matters:

Priority debts first, whatever the interest rate. Citizens Advice says to deal first with debts that can cause serious problems. These include rent or mortgage arrears, Council Tax, energy owed to your current supplier, TV licence, court fines, money owed to HMRC, and hire purchase on essential goods. These can lead to eviction, court action or disconnection.
Then high-interest debt, quickly. Credit cards, overdrafts and store cards usually cost the most. Paying more than the minimum saves the most money here.
Low-cost, fixed-term debt can run to schedule. If a loan or mortgage is cheap and affordable, overpaying is optional. You might prefer to build some savings first, so the next unexpected bill doesn't go back on a card.
Keep a small cash buffer while you repay. Clearing a card to £0 and then putting the next emergency back on it saves nothing.

The FCA's benchmark: persistent debt

The FCA's rules give a useful yardstick for credit cards and store cards. If, over 18 months, you've paid more in interest, fees and charges than you've paid off the borrowing itself, your card provider must contact you. It has to explain that paying more would cut the cost and point you to free debt advice. If that pattern continues for another 18 months, the provider must take reasonable steps to help you repay faster, and it can suspend the card if you don't respond. The FCA expects a reasonable repayment period in these cases to usually be three to four years. If your current payments would take much longer than that to clear a card, they're too low.

Practical tips

List every debt with its balance, interest rate, minimum payment and whether it's a priority debt.
Set a fixed monthly payment above the minimum. As the balance falls, more of each payment goes towards the debt itself.
Don't take on new credit while you're clearing old debts.
If you can't keep up, get free advice early. In England and Wales, a debt adviser can apply for Breathing Space, which gives up to 60 days in which creditors can't add interest or charges or take enforcement action. You still need to make your repayments.

Total interest on £3,000 at 2% a month

Worked example

A £3,000 credit card balance at 2% interest a month (illustrative; that's 24% a year before compounding):

Plan	Monthly payment	Total interest
Clear in 12 months	£283.68	£404.15
Clear in 24 months	£158.61	£806.72
Clear in 36 months	£117.70	£1,237.15
Pay £60 a month	£60.00	Never cleared

At 2% a month, the first month's interest is £60. Paying only £60 a month just covers the interest, so after 18 months the balance is still £3,000. That's the kind of pattern that triggers the FCA's persistent debt rules. Clearing the card in 36 months, at the edge of the FCA's three-to-four-year benchmark, costs £430.43 more in interest than clearing it in 24 months. Clearing it in 12 months saves £833.00 compared with 36 months.

If £283.68 a month isn't affordable, 24 months is a sensible middle ground. Make sure any priority bills are covered first.

Is it ever OK to be in debt?#

Yes. Debt can be reasonable if it's affordable from your normal income, has a clear end date, is fairly priced, and pays for something lasting like a home or education. It becomes a problem when you're borrowing to pay for essentials or other debts, or the balance isn't falling.

Should I pay off debt or build savings first?#

Deal with priority debts and expensive debts like credit cards and overdrafts first. Keep a small cash buffer so emergencies don't go back on credit. Once high-interest debt is cleared, build your savings before overpaying cheap, fixed-term loans.

Which debts should I pay off first?#

Start with priority debts: rent or mortgage arrears, Council Tax, energy owed to your current supplier, court fines, TV licence, money owed to HMRC and hire purchase on essential goods. Citizens Advice says these can lead to eviction, court action or disconnection. Then target your highest-interest debts.

How long should it take to pay off a credit card?#

As quickly as you can afford. For people in persistent debt, the FCA expects a reasonable repayment period to usually be three to four years. If your payments would take much longer than that, increase them if you can, or get free debt advice.

What is persistent credit card debt?#

Under FCA rules, it's when you've paid more in interest, fees and charges than you've paid off the borrowing over 18 months. Your provider must contact you and suggest paying more. If it carries on for another 18 months, the provider must help you repay faster and may suspend the card.

Should I overpay my student loan?#

Often not as a priority. GOV.UK says what you repay depends on your income (9% of income above your plan's threshold), not on how much you owe. Clear expensive debts and build savings first, and get guidance before making voluntary student loan payments.

What can I do if I can't keep up with my debt repayments?#

Talk to a free debt adviser as early as possible. In England and Wales, they can apply for Breathing Space, which protects you from interest, charges and enforcement for up to 60 days while you make a plan. Options afterwards include a debt management plan or an IVA.

Keep reading

Sources

Figures checked against these sources on 6 October 2026. If a rule changes, we update the page and its date.

General information, not personal financial advice. Rules depend on your circumstances; check the official source or speak to a regulated adviser before acting.