Simple things you can do today to take back control of your borrowing following the pandemic.


British households repaid the most money borrowed on credit cards and loans in 2020 since records began.


However, these aggregate figures obscure intense pressure for people bearing the brunt of the pandemic. Almost 9 million people, many of them among Britain’s poorest, were forced to increase their borrowing last year to cope with the pandemic.


The result is that large numbers of people are paying more in interest and fees than necessary, carrying debt for longer and are often weighed down by the need to constantly manage their borrowing to keep it manageable.


It doesn’t have to be this way and there are some simple things you can do today to help you take back control of your borrowing…


Start by listing all of your current debts, be it credit card debt, student loan debt, or a car loan, and figure out the minimum amount you owe to remain current with each debt. This way, you know where you stand.


But simply knowing where you stand and paying the minimum amount won't get you out of debt quickly, so evaluate your fixed expenses and determine how much of your discretionary spending budget you can allocate toward debt repayment.


You could also look to reduce the interest rate on your debts by consolidating multiple debts into one debt or transferring high-interest debt to a low-interest credit card, such as a balance transfer card.


Have a deal-and-switching blitz. It can be time-consuming, even with the help of price-comparison sites, but it’s worth your effort to help you get in the best financial shape possible. Use your budget and go through each, in turn, to see if you can get better deals. For example, can you reduce your TV package or use pay as you go options instead? Have you been using your car less? If so, you may be able to reduce your annual mileage and bring down the cost of car insurance.


Any savings from your switching blitz could be used to pay more towards that extra debt and cut it down to size. Small changes can have a big impact…


The average credit card debt is £2,238, with an average APR of 17.94%. If you paid the minimum payment each month with no further borrowing, it would cost £2,876 in interest and take 24 years and 8 months to pay this off. That’s more than double the amount borrowed and nearly a quarter of a century to repay.


By simply fixing this at the current minimum repayment of around £53, with no further borrowing, would save you £1,742 in interest and only take 5 years and 4 months to repay. This would knock a whopping 19 years and 4 months off the repayment time.


Just think of how much extra interest you’ve paid over the years, when simple changes could have meant you had that money sat in your account rather than your credit card companies.


We think it’s time this changed, it’s time to Borrow Well…


While the impact of the coronavirus crisis on jobs and pay is more visible, it is important for people to understand and take control of their borrowing as lockdown eases.

Which is why, at ilumoni, we’re on a mission to make it easy for people to Borrow Well. We’ve been working to create an App that uses artificial intelligence, combining open banking, credit and eligibility data, to identify the simple things people can practically do to unlock better borrowing and start to Borrow Well.


If you are interested in hearing more about our app, register and we’ll keep you up to date with all of our latest developments.