What is unaffordable lending?
Unaffordable lending occurs when a lender approves credit without properly checking whether you can afford the repayments. Under FCA rules (CONC 5.2A), all lenders must carry out reasonable and proportionate affordability assessments.
Types of credit you can claim for
- Credit Cards – Persistent debt, limit increases, minimum payment traps
- Personal Loans – Debt consolidation failures, income verification gaps
- Payday & Short-Term Loans – High-cost credit debt spirals
- Buy Now Pay Later – Regulated only since 15 July 2026; claims on earlier agreements are limited and under review — read the guide before starting
- Catalogue Credit – Store credit and shopping accounts
- Overdrafts – Long-term overdraft reliance
- Guarantor Loans – High-risk secured lending
- Doorstep Loans – Home credit and weekly payment loans
- Logbook Loans – Vehicle-secured lending
Common signs of unaffordable lending
- Credit approved despite existing financial difficulties
- Multiple loans or credit increases without proper checks
- Borrowing to pay existing debts or essential expenses
- Credit that made your financial situation worse
- Inadequate income verification by the lender
- Lending continued despite payment difficulties
What you could get back
These are the outcomes a successful complaint can produce. They are not guaranteed, and you will not necessarily get all of them — what is fair depends on your circumstances and the lender's records.
- Refund of all interest and charges paid
- 8% statutory interest on refunded amounts
- Outstanding balances reduced or written off
- Defaults and late payments removed from credit file
- Compensation for distress and inconvenience
Will my complaint succeed?
Not always, and it is fair you know that before you start. Lenders reject a large share of affordability complaints at the first stage, and the Financial Ombudsman upholds some — but not all — of the complaints referred to it, with uphold rates varying widely by lender and product. Two things in particular decide weak cases: whether the lending record actually shows signs of unaffordability, and whether your complaint is in time.
Time limits. The ombudsman can normally only consider a complaint made within six years of the lending decision or, if later, three years from when you knew (or ought reasonably to have known) you had cause to complain. Old lending is often caught by this: a loan from 2015 is not automatically claimable in 2026, and you may need to show when you first realised the lending was unaffordable. Lenders can also consent to older complaints being considered, but you cannot rely on that.
Lenders that have gone bust. Many high-cost lenders — including several of the best-known payday brands — are in administration or dissolved. A complaint against an insolvent lender goes into the administration as an unsecured claim, and payouts have historically been pennies in the pound or nothing. See our guide to claiming when a lender has gone bust.
How to claim
- Identify which credit products may have been unaffordable
- Gather evidence of your financial circumstances
- Submit complaints to the relevant lenders
- Escalate to Financial Ombudsman Service if needed
- Receive compensation and credit file corrections
Free guidance and support
Our comprehensive guides cover everything you need to know:
- Complete guide to unaffordable lending
- Am I eligible to claim?
- What evidence do I need?
- Step-by-step claims process
- How compensation is calculated
Start your claim today
If unaffordable lending is still affecting your finances, checking is free and takes minutes. If your complaint succeeds, you could recover what you overpaid and have your credit file corrected — and if it does not, you have lost nothing by asking.
Check If You Could Be Owed Compensation
You may be eligible to complain if a lender gave you credit you couldn’t afford. Start a free check in minutes — no paperwork needed. No win, no fee if you choose to proceed.
Your application runs on Recoup (werecoup.co.uk), operated by our legal partner Clear Legal Limited under their own licence and regulation. It is not a Claims Bible site: Clear Legal Limited handle your application, your claim and your data from there, and they set out their service, fees and terms before you commit to anything.
Check your agreements on Recoup, our claim partner’s site
How much could your claim be worth?
Try our guarantor loan checker — free, takes under a minute, and uses the official figures for this claim type.
Calculators and tools
Free tools that estimate what a claim could be worth — a starting point, not a valuation.
More in this section
- BNPL and the New FCA Rules From July 2026
- Can I Claim Without Old Loan Paperwork?
- Claiming In An Iva Or After Bankruptcy
- Claiming While On A DMP
- Claiming Yourself va Using a CMC
- Do I Need A Claims Company?
- Escalating to the Ombudsman
- How Far Back Can I Claim?
- How Long Does An Unaffordable Lending Claim Take?
- How the Financial Ombudsman Handles Unaffordable Lending Complaints
- Irresponsible vs Unaffordable Lending — What’s The Difference?
- Is Unaffordable Lending Redress Taxable?
- Lender Rejected Your Complaint — What To Do
- Regional Claim Differences
- Section 140A and the Unfair Relationship Test
- The 8-week Response Rule
- The 8% Statutory Interest Explained
- The CONC Rules On Affordability — A Plain-English Guide
- Were Your Credit Limit Increases Unaffordable?
- What Affordability Checks Should a Lender Carry Out?
- What Happens After You Make A Claim
- What Happens After You Submit A Complaint
- What If You Still Owe The Lender Money?
- What Is Persistent Debt — Credit Card Claims
- What is Unaffordable Lending?
- Which Types Of Credit Can Be Claimed As Unaffordable?
- Will A Claim Repair My Credit File?