At what point is a DMP needed?

justruth

It seems a silly question, but I am a mature student who started uni in debt. Since my LBM in December I have really hit the debt hard and I am in the best position I have been in for quite some time in that all my debt is at a fixed rate and I am able to overpay each month.

I went to see the university adviser as I felt I was working too much and I had seen the post on the Access to Learning Fund which I thought I might apply for. She looked at my finances, including the amount I have left to overpay each month and suggested arranging a DMP instead.

I know that credit should not be an issue to me now, but I have fiercy protected my file and have only had one late payment since 2005! Pre 2005 I have an Arrangement to Pay type default which still causes me to struggle to get decent rates for my credit. I am in no hurry to get another loan at the moment, but I really dont want to do this. She asked why I was so concerned about the default and having had time to consider this, it is because I want to be able to buy a house in 5 years when I graduate, I am tired of getting poor rates and would like to transfer some of my debt to cheaper debt next year in order that I can cut my working right down for the successive years. I know that consolidating is paying interest on your interest but moving the debt from 20.9% APR to 8.9% or whatever I can get seems sensible enough to me.

When I had my LBM my debt was up to £18,552. The amount in my signature allows for my accounts to go up and down in line with student loans and grants and does not include the student loan as that is something I will deal with way after all of this! My debt as it stands now is £16,891.78. That's £1,660.22 since 18th December. Having a DMP suggested felt like a kick in the guts and it's not something I am willing to consider when I feel like I can still get out of debt the old fashioned way.

I do want to cut the hours I work and I conceed fully that I cannot work from year 3 but I think there must be an alternative. When do you think I should conceed defeat? I feel like I am quitting just because it got a bit tough. I scraped through my midsessional exam, I passed exactly on the mark, and I know I can do better but I think a DMP would be a mistake.

What do you think?

thevinternet

Hiya - we are in a similar situation - I am also at uni and in a lot of debt so welcome.

If you don't want a DMP there are four other ideas I could suggest.

1. Post an SOA so that the good people of this board can help you figure out how to save cash in some areas to put towards your minimum payments each month.

2. Work every hour god sends during the summer holidays - last year I worked 7 days a week from May until the end of August. Not pleasant, but it helped me save money for the coming year and I also cut one of my credit card debts in half this way.

3. I'm sure you won't like this suggestion, but could you take a year out to work and save some cash? I find that unis are surprisingly flexible about students having a year out - I know you are keen to graduate and buy a house, but this option might help in the long run.

4. Have you ever been sold PPI on your credit cards? You could look into reclaiming that money if it was mis-sold to you - there is a section all about this on the forums page.

xx

justruth

thevinternet wrote: »

Hiya - we are in a similar situation - I am also at uni and in a lot of debt so welcome.

If you don't want a DMP there are four other ideas I could suggest.

1. Post an SOA so that the good people of this board can help you figure out how to save cash in some areas to put towards your minimum payments each month. This is something that has to wait a little while as I am moving and I have just BT'd some debt etc. I need a little time to get the new figures. I don't even know how much shopping will cost until I know where I am going to live!

2. Work every hour god sends during the summer holidays - last year I worked 7 days a week from May until the end of August. Not pleasant, but it helped me save money for the coming year and I also cut one of my credit card debts in half this way. That is kind of the plan but I have a 'daughter' (long story) that I rarely get to see and I like to spend time with her over the summer, even just a day a week. I managed a bit of a mix last summer so I guess I will see. I think this is probably the route I would take.

3. I'm sure you won't like this suggestion, but could you take a year out to work and save some cash? I find that unis are surprisingly flexible about students having a year out - I know you are keen to graduate and buy a house, but this option might help in the long run. I am not totally opposed to this suggestion either. I am considering the merits of intercalating as I would get another degree and have a more chilled out year so I could carry on working. My course becomes much more intensive each year so working from year 3 on is not an option, but if I add a suitable research project into the middle of it I would do my future career no harm and potentially clear most of the debt!

4. Have you ever been sold PPI on your credit cards? You could look into reclaiming that money if it was mis-sold to you - there is a section all about this on the forums page. I already reclaimed bank charges and I always refused PPI as I knew I probably wouldn't get it anyway.

xx

Thank you for the suggestions, it was reassuring to be shown other options. My problem is working 4 nights a week is a bit too much. I think I may have to look at reducing my hours some, it's a little difficult due to the nature of the job that I actually have a really good position and while it tends to frustrate me beyond belief some nights it pays well and my job is really secure at the moment. Cutting down time may also result in me being moved to a venue where I work less suitable hours and have a much harder job.

No I think I just needed some support that the DMP was not the only real option for me.

thevinternet

justruth wrote: »

No I think I just needed some support that the DMP was not the only real option for me.

It's not the answer for everyone. It certainly isn't the answer for me, as I don't want to be hassled by creditors, and I also kind of have the mindset that I got myself into this debt, so I should get myself out of it!

A good tool for managing your own debts is at: https://www.whatsthecost.com.
I'm sure you'll have seen this before, but basically it helps you work out which debts to pay first and gives you a potential 'debt-free' day. You need the APRs and things though, so it's one to try once you have sorted out your BTs etc.

Your job sounds interesting, but yes 4 nights a week is quite a lot if you're studying as well. Maybe once you've filled in a new SOA and worked out where you can save money, you'll find that you can cut down to 3?

Oh - also have you asked your uni about the 'Access to Learning' fund? They might let you have some free money - when I was at college I got £30 a week from them, absolutely free!! I wish that was still the case, but luckily I'm not as poor now as I was then!

You're doing well by addressing the problem and working hard to solve it. :T Maybe start your own diary thread too to keep you motivated?

xx

justruth

They said no to ALF, thats when they suggested the DMP as an alternative. I'd like to cut work right down to 2 nights max every weekend which is not entirely unreasonable, but at the moment I finish relatively early so I can be up again by about mid-day (weekends) and try to get to the library with my friend to get a little more done before going back to work. If I was moved I could be at work till 8am, completely wiping out my weekends.

thevinternet

justruth wrote: »

They said no to ALF, thats when they suggested the DMP as an alternative.

Oops - sorry, got my late-night head on I think! :rolleyes:

Working til 8am sounds painful, I can understand your predicament. Could you switch companies/look for another job in the same field?