Can you get credit during an IVA? In short: only in limited circumstances, and usually not without permission. While your IVA is running, you normally can't take out £500 or more of credit without the agreement of your insolvency practitioner (IP). That includes loans, credit cards, most catalogue and store credit, and buying things on finance.
There's a practical reason for the limit. An IVA is built around a carefully balanced budget, and taking on new borrowing could put your existing payments — and the whole arrangement — at risk. The rule is there to protect you as much as your creditors.
The short answer
- You normally can't borrow £500 or more during an IVA without your IP's permission.
- The limit usually covers loans, credit cards, catalogue credit and finance agreements.
- Your IVA appears on your credit file, which makes borrowing harder and often more expensive anyway.
- Permission may be given where borrowing is genuinely necessary — for example, replacing an essential car.
- The IVA stays on your credit file for a set period, usually six years from when it starts.
Why the £500 rule exists
Your monthly IVA payment is worked out from a detailed budget of your income and essential spending. New borrowing adds new repayments, which could unbalance that budget and make your IVA harder to keep up. The £500 threshold is a safeguard: it stops you quietly taking on debt that could undermine the arrangement you've committed to. If you're unsure whether something counts, the safest approach is always to ask your IP first.
When might you be allowed to borrow?
Permission isn't impossible — it's just controlled. Your IP may agree to borrowing where there's a genuine, essential need and it won't jeopardise your payments. A common example is replacing a car you rely on for work if your existing one is beyond repair. Our guide on buying a car during an IVA covers this exact situation and the rules around car finance.
Always get agreement first
The key point is to speak to your IP before entering into any credit agreement over the limit. Going ahead without permission could breach the terms of your IVA and put it at risk. If your circumstances have genuinely changed, your annual review is also a natural point to raise it — see the IVA annual review explained.
What about your credit rating?
Even setting the £500 rule aside, borrowing during an IVA is difficult in practice because of the impact on your credit file. An IVA is recorded on your credit report and generally stays there for around six years from the date it starts. Lenders can see it, which usually means fewer offers and higher interest rates. Our guide on an IVA and your credit rating explains this in full.
The encouraging news is that this is temporary. Once your IVA completes, you can begin to rebuild — our guide on rebuilding your credit score after an IVA sets out practical steps to take.
Everyday banking during an IVA
Day-to-day banking still works, but you may need to review your accounts. Some people move to a basic bank account during their IVA so their money isn't affected by any overdraft owed to the same bank. Our guide to the best bank accounts for an IVA explains when a switch makes sense and how to do it safely.
Renting, insurance and other agreements
The £500 rule is about credit, so not every financial commitment is caught by it. Paying for something outright, or entering an agreement that isn't borrowing, is treated differently — though it still needs to fit within your budget. Where the picture can get less clear is with things like a mobile phone contract, a new tenancy or certain insurance policies paid monthly, which can involve a credit check or a form of finance. If you're not sure whether a particular arrangement counts as credit, it's always safest to check with your insolvency practitioner before you sign, rather than risk breaching your terms by accident.
The bottom line
Getting credit during an IVA is limited by design. Assume you'll need permission for anything of £500 or more, expect borrowing to be harder while the IVA is on your file, and lean on your IP for guidance rather than new lenders. An IVA is a chance to get on top of your debts, and staying within its rules is what keeps it on track. For free, impartial money guidance, MoneyHelper is a good place to start.
How IVA Advice Online can help
Whether you're already in an IVA or just weighing one up, we can explain what the borrowing rules would mean for you in practice. Our advice is free and confidential — get in touch with any questions.