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LOAN DEBT

Can I stop paying a loan while I complain about mis-selling?

Generally no — continue payments while the complaint is investigated. Stopping payment can add default marks to your credit file and make things worse. If you cannot afford payments, consider a formal debt solution while the complaint runs in parallel.

Why to keep paying

Complaints can take months to resolve (8 weeks at the lender, then several months at the Ombudsman if escalated).

Missed payments during this period generate defaults and credit file damage regardless of whether your complaint eventually succeeds.

If the complaint succeeds, you get compensated for the loan itself but not usually for the default marks you added during the complaint period.

If you cannot afford payments

Ask the lender to place the loan on hold pending complaint resolution. Some lenders do this voluntarily; others do not.

If the lender refuses and you cannot pay, request a payment plan (Time to Pay, DMP-style).

For very unaffordable loans, a formal debt solution can proceed alongside the complaint. The complaint continues even after the debt is included in a DRO or IVA — you can still get compensation.

Successful complaint outcomes

Compensation typically includes refund of interest and fees paid, credit file cleanup for the affected loans, and sometimes distress compensation.

If you are still paying, the compensation offsets what you have paid. If the loan has been paid off, you receive a cash refund.

If the loan is in a debt solution (DRO/IVA/bankruptcy), compensation may go to the insolvency estate depending on timing.

If the lender is defunct

Wonga, QuickQuid, Amigo administrators handle complaints on a different framework. Compensation is often lower and paid as a percentage of the claim value.

The Financial Services Compensation Scheme covers some cases too.

Key takeaways

Struggling with loan repayments?

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Where to get free, regulated debt help

If you need help with debt, these organisations provide free regulated support. UK Debt Team is an introducer and referral service, not a debt advice provider.

MoneyHelper
Government-backed service
StepChange
Free debt charity
Citizens Advice
Free advice network
National Debtline
Free phone and web support
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