Just another quick question re son and overdraft

gilly41

Hi
Following my earlier post my son has rung and said that he can take out a student overdraft with the Halifax and he doesnt pay it back til he has finished Uni. Ummmm just wondered if he has got this right? Can anyone tell me?
Thanks
xx

indesisiv

Sounds right to me.
http://www.halifax.co.uk/bankaccounts/student.shtml

jitsuguy

Hi Gilly,

Yeah many banks have student accounts with 'free' overdrafts. For example I have a overdraft with Barclays for £2000 at 0%. I'm looking at paying it back in 12months! But i'm technically in my 6th year now! I've done a BSc and an MSc and now on a PhD - can't wait to finish uni now!

Jitsuguy

skintchick

But of course, he WILL have to pay it back, so if he hasn;t got it when that time comes the interest will shoot up. Not the best thing to do.

jonesMUFCforever

gilly41 wrote:

Hi
Following my earlier post my son has rung and said that he can take out a student overdraft with the Halifax and he doesnt pay it back til he has finished Uni. Ummmm just wondered if he has got this right? Can anyone tell me?
Thanks
xx

Any overdraft is repayable on demand. If he misbehaves with the account and say consistantly exceeds his overdraft limit then they could ask for it to be immediately repaid.

muddled_midget

I'm not sure about Halifax but with HSBC they don't demand it all back as soon as you finish, you get between 3 and 5 years where they gradually reduce the amount of overdraft each year. I hadn't realised Halifax didn't just give you an overdraft, I'm sure it's just part of the HSBC student account, or maybe I should have checked more closely what I was signing! All I know is I get a lovely letter every August from my bank manager telling me he's extended it even further. But most of my friends at uni do use their overdraft, either sensibly and only use it when absolutely necessary, or like me, and live permanently at the bottom end. If your son isn't great with money, and from your earlier posts I get the impression he might not be, maybe he shouldn't take out all the overdraft they're offering all at once. That way at least he's still got a bit of leeway next time his budget goes a bit wrong, rather than just using it as a target for what he has got to spend.

Star1979

I was with the Bank of Scotland while at uni and they did a 0% overdraft for students - they limited what you could have up to each year with a maximum of £2000 if you were at uni for 5 years. After that you can usually get a graduate account with a 0% overdraft or a fairly low interest graduate loan to pay it back. Tell him if he gets an overdraft to not get an an agreed overdraft for the full amount immediately. If he has a £2000 overdraft then believe me he will spend that £2000 in no time at all. If he has to go into the bank every time he needs to extend it by say £200 it may last him a bit longer.