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The 5 Most Common Reasons Behind Personal Debt

The 5 Most Common Reasons Behind Personal Debt
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Getting into personal debt is easily done. Whether it’s random circumstances, unexpected bills,  or simple mistakes, it can all lead to a spiral of uncertainty. In a tight financial situation, it can be tempting to borrow money, even if it’s something small like an extra £100 loan, but this can further increase your debt, through fines, missed payment fees and interest on top of original agreements.

Here are 5 of the most common reasons behind personal debt:

1. A Change in Circumstances

For some people debt starts when they have been made redundant, lost their job suddenly or have an emergency situation that eats up all their savings. This can quickly turn into borrowing money that they can’t afford to pay back and can lead the person to enter into a spiral of debt that is hard to overcome.

2. Credit Card Overuse

It is easy to forget that every time you use your credit card that real cash is being used up. Sometimes it can be easy to think ‘Oh, I’ll pay that off later’ and before you know it, you can’t afford to pay off everything at the end of the month. That’s where the interest fees and hidden charges start to mount up. And while many credit cards start off with a low or 0% interest rate, they don’t stay like that forever. After this initial period, interest will be applied.

3. Divorce or Separation

Getting divorced or separated can be an extremely expensive and stressful period of your life. From moving expenses to potential legal battles, it’s likely to leave you mentally and financially drained, and can lead to you overlooking important financial decisions – increasing your personal debt.


4. Gambling

A small gambling habit can quickly become a larger addiction and become a problem if you are not careful. It can be fun, but as the adverts say, ‘When the fun stops, Stop!’ Gambling debts can creep up on you and it is sensible to set limits to how much you can spend if you have an account with a bookmaker. If you need advice about your debts, check out our debt advice page.

5. Poor Money Management

It’s always recommended to set a plan for your monthly expenses, as you will have a clear picture of exactly where your money is going. One overlooked aspect of planning your expenses is when your bills are to due to being paid – so that you can ensure you have enough in the bank to cover them when they arise.

What If I Need to Borrow Money?

If you do need to take out a loan, My Financial Broker is a broker of short term loan lenders that offers a convenient financial solution should you be faced with a problem that requires immediate attention. For more information on short term loans, you can read our frequently asked questions.

We only work with responsible payday loan lenders who only help those individuals who can afford to repay within the terms of their agreements.

If you think you need help with your debts, you can contact the Step Change Debt Charity service at



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