If a cash advance or short-term loan is starting to feel unmanageable, the most important thing to know is that you have real, legally-backed options – and none of them involve simply hoping it resolves itself. This guide covers what to actually do, in order, if repayments are becoming a struggle.
Contact your lender before you miss a payment, not after
FCA-regulated lenders are required to treat customers in financial difficulty fairly, and that includes working with you on a manageable repayment plan rather than just letting missed payments accumulate. If you can see a payment is going to be difficult, contact the lender before the due date if you can – you’re generally in a stronger position asking for help proactively than reacting after a missed payment and default fee have already hit.
Know your right to cancel a continuous payment authority
Many short-term lenders collect repayment through a continuous payment authority (CPA) – essentially, standing permission for them to take money from your debit or credit card. If a CPA is taking money at a time or in an amount that leaves you unable to cover essentials, you have a clear legal right to stop it. You can withdraw your consent to a CPA at any time by contacting your bank or card issuer directly – you don’t have to go through the lender first, and your bank must act on your instruction, up to the close of business on the working day before the payment is due. If a payment is taken after you’ve validly cancelled the authority, you’re entitled to get that money back from your bank. If your bank refuses, you can escalate a complaint to the Financial Ombudsman Service.
Cancelling a CPA stops the automatic collection, but it doesn’t cancel the debt itself – you’ll still owe the money, and you should still contact the lender to agree how you’ll pay it. What it does is give you back control over when and how much comes out of your account.
Breathing Space: a 60-day pause to get advice and a plan
If debts (including a cash advance or short-term loan) are becoming genuinely unmanageable, the government’s Debt Respite Scheme – known as Breathing Space – can give you up to 60 days of legal protection: most interest, fees and charges on qualifying debts are frozen, and most enforcement action and creditor contact is paused, giving you time to get proper debt advice and work out a long-term plan without the pressure escalating in the meantime. Breathing Space is available if you live in England or Wales; Scotland has a separate statutory moratorium system, and Northern Ireland does not currently have an equivalent scheme – a local debt adviser can explain the options available where you live. Breathing Space isn’t a payment holiday – you’re still expected to keep up with ongoing payments where you can – and there’s a review partway through. Crucially, you can’t apply for Breathing Space directly: it has to be arranged through a regulated debt adviser, who registers it on your behalf. It’s a genuinely useful tool, but it’s time-limited, so it works best combined with using the 60 days productively rather than as an end point in itself.
Get free, regulated debt advice
This is the step that makes the others work properly. MoneyHelper (the government-backed money guidance service), Citizens Advice, National Debtline and StepChange all offer free, confidential debt advice in the UK, and any of them can help you register a Breathing Space if you’re in England or Wales (or explain the equivalent option where you live), work out an affordable repayment plan across everything you owe (not just one loan in isolation), and explain formal debt solutions if things have gone further than a single short-term loan. Using free advice doesn’t cost you anything and doesn’t go on any kind of public record just for asking – the only downside to contacting them is not doing it sooner.
What not to do
- Don’t take out a second loan to cover the first one. This is one of the clearest routes into a genuinely difficult debt spiral, and it’s exactly the pattern free debt advisers are trained to help you avoid.
- Don’t ignore contact from your lender. FCA-regulated firms have obligations to treat you fairly if you engage with them; going quiet removes your ability to negotiate and can make the situation harder to unwind later.
- Don’t assume you have no options because the lender is regulated. Being FCA-authorised doesn’t mean a lender can ignore financial hardship – it means the opposite: they’re required to respond to it properly.
If you’re not sure where you stand yet
If you haven’t borrowed yet and you’re trying to work out whether a cash advance is the right call in the first place, it’s worth reading our guides to what a cash advance really costs and alternatives worth checking first. And if something about a lender you’re dealing with doesn’t feel right, our guide to spotting predatory and illegal lending explains exactly what to check and who to contact.
Sources: MoneyHelper – What is Breathing Space and how can it help me; Citizens Advice – Stopping a future payment on your debit or credit card; FCA – FCA reminds banks of their obligations when cancelling Continuous Payment Authorities; Financial Ombudsman Service – Continuous payment authorities.