low cost borrowing for low incomes??

raspberry_ripple

Hi, First post.

I am a father of three,I am seriously disabled and in receipt of state benefits. My two older children will soon need my financial supprt as they leave school and go on to further education. I have been saving £100 every month for the last two years but this will this still leave me with a shortfall when the children will need access to the money in approximately three years time meaning i will need to borrow between 3K and 5K. As a long term ill person with benefits only income I am concerned that despite having no debts at all i would still be subjected to high rates of interest.

Question is, Has anyone dealt with a lender that will enable you to save with them for a few years to prove your financial responsiblilty and dependability before borrowing in order to secure a lower rate of interest by improving the lenders confidence in your ability to maintain regular payments? Could I pay in £100 a month for three years into a savings account in the knowledge that this would improve my creditworthiness and chances of securing a loan for between 3k and 5k at a good rate?

Thanks in advance for any experiences or advice

ninky_2

your user name is a little odd but i will take this enquiry at face value.

why do you need to borrow money to support them through further education? usually in further education people continue to live at home and there are no study fees. effectively, it is an optional extension of school.

do you mean higher education / university? can i suggest you encourage them to take a year off between FE and HE to take a job? this will not penalise them for their university place. indeed, i believe you can actually defer your place for a year. i took a year off myself and worked, choosing to live away from home, support myself and pay rent for much of that year. as well as teaching me to live on a tight budget it meant i had some experience of the world of work, living away from home and fending for myself.

once in higher education, your children will actually have access to much more affordable debt than you in the form of student loans. those paying theirs off now have told me they are actually in negative interest - meaning the debt is getting smaller without them paying extra.

i do feel for you situation. if only things could go back to how they were a couple of decades ago when those from low incomes got full fees paid, full maintenance grant and housing benefit and social during the long holidays.

chalkie99

ninky wrote: »

your user name is a little odd but i will take this enquiry at face value.

Ninky ????

ninky_2

chalkie99 wrote: »

Ninky ????

well it's not cockney rhyming slang for an abusive term from a disabled person. raspberry ripple / cripple.......

chalkie99

Fairy nuff.

Never saw it like that -sorry!

raspberry_ripple

Hi,
Thanks for the replies, I didnt mean any offence with the user name, I just find that a sense of humour has helped me deal with my situation much more than all of the medication and counselling put together.

As a consequence of my ill health they have had to endure lots of pressure and worry which has fortunately not had a negative effect on their education so far but has meant considerable hardship. I want to be able to help them keep any personal university debts to a minimum but I suppose i am not sure how to do it. My peers who went on to university seem burdened with debt although admittedly this is due to irresponsiblity in most cases. I just want to do the most and best i can to give them a secure start to adult life and if i can take away some of the financial stress that would be great.

As suggested I could contribute to repaying their own student loans, and for them to raise their own funds they could have a work year. Thanks for the input.

Canvey

You're spot on with the need to have a sense of humour. My mate and I are both disabled, and are known in our circle of friends as 'The Raspberries'. I started using the term when I first became ill a few years back. Its not meant to cause offence, it's just a light hearted reference.

speedbird1973

Is anyone on this site NOT disabled? I've never seen so many posts that have the words "I am disabled"!!

If you can save £100 a month on a low income I think you're doing a huge amount for them already! Devote your time to getting the money invested as well as you can for them (which I guess means savings of some kind as you don't want to gamble with their futures!). As someone else said, most people come away from uni with debts.. if you can afford to pay everything for them, they'll still borrow the money and come away with the debt! It's not such a biggie!

CLAPTON

From what you say you will have 6,000 saved up in three years time (100 x 12 x 5 years)
surely they will not NEED 6000 plus another 3-5,000 in their first year?

Just use the 100 you can spare to drip free a little extra for them during their three years at uni.... lump sums are very bad for young people..too easy to blow away while a regular little extra can be well used.

That way they get the advantage of your help without you getting in any debt and wasting lots of money paying interest.

In the mean time you / they should look into what support is available to them ..grants, bursaries and student loans

welf_man

I think what you're looking for is a credit union - though you'd have to check with your local one whether they'd lend for this purpose, and what the interest rate would be. Although they will lend to people high street lenders won't touch, the interest rates re not automatically low - my credit union lends at 19.6 APR, for instance. Student loans are way cheaper!

Mel.

Ames

You need to be careful that your savings don't get high enough to affect your benefits.

To be honest, if they're going to uni they're adults and should be standing on their own feet. Otherwise where do you draw the line? What happens if they're in their forties and still needing money from you? I think the best way you can help them is to show them how to budget, and cook. Maybe give them a few goes at handling the family food budget for a week and working out how to best use it? Things like that will be far more useful to them in the long term than handing out cash. Oh, and teach them about finances - I wish I'd understood apr's and things before going to uni and landing in loads of debt!

If you have to give money, then £50 a month each would go a long way, and it's what you can afford. Then there's the lump sum you've already saved for any emergencies they have.

Sorry if that's a bit blunt!

Oh, I'm disabled too and didn't know about that rhyming slang, but I love it now! I agree about keeping a sense of humour, and I'm also one of those who feels that 'derogatory' terms should be reclaimed, hence I use 'cripple parking' etc.