Student Overdraft Repayments

ncfc_1902

Hi,

I've got two student accounts, one with NatWest and the other with Halifax. I've got overdrafts on both of them, one at £1400 and the other at £1000.

Does anyone know how long the overdrafts remain interest free for and when I'll have to start paying interest?

I seem to recall that the interest free amount reduces gradually but I'm not sure of the timescales or amounts. I know I could ask the bank, and I intend to, but I just was hoping for a quick answer.

Thanks.

ncfc_1902

jambosans

First off, you shouldn't have two student account - you will be in breach with one or both banks terms & conditions directly or indirectly (e.g. having your bursary/ loan paid it may be a requirement, which you cannot fulfil on both).

To answer your question, NatWest provide their Student Account up to five years of study, afterwards you can apply/ change to a Graduate Account which provides up to an additional three years interest free on your overdraft. Halifax on the other hand also provide their Student Account up to a maximum of five years of study, with an additional year to repay interest free (six years max). Halifax do not offer a graduate bank account.

I would suggest you pick your favourite bank, increase the overdraft to a suitable level (which will cover your current combined overdraft limit - £2400), and close one of the accounts. It's unlikely NatWest or Halifax will catch on that you hold a student account elsewhere, however lack of funding or specifically student support funding (e.g. loan or bursary), may flag a review on one of your overdrafts, thus resulting in the overdraft being reduced, or even withdrawn.

It's paramount you do not let debt (even when interest free) become unmanageable, and I would suggest that with two large overdrafts you are running that risk. So, as I've said I would consolidate onto one account, and then consider repayment in the medium to long term. NatWest seems to be the preferred option, with the three rather than one year after you graduate to repay interest free. You are almost correct in saying the interest free overdraft will reduce each year, however this only applies to a graduate account.