Halifax Student Overdraft Coming to an End.

DMessenger

First of all, sorry if this is in the wrong place but I am basically looking to know what I can expect when this comes to an end in June.

I currently owe about £900 interest free to Halifax but I haven't had stable employment for a long time. At the moment I am currently working part time 20 hours a week and unless I take more than half of my monthly paycheque out of my other current account and pay it into the student account it will run out before it is all paid back.

I have done a little bit of research online and I see alot of different things so I am unsure what is likely to happen to me. I read that I would be charged £1 a day for being in an arranged overdraft but it seems unlikely that they would extend the overdraft like that as this it is coming up to the end of the year AFTER I finished my degree. £1 a day seems alot to me but if it wasn't extended what can I expect, will they just start charging interest or will I have to get in touch with debt collectors? Should I just bite the bullet and pay most of my paycheque in (far from preferable).

Really unsure on this topic and your help would be greatly appreciated!

-DMessenger

DMessenger

Not sure if this is against the rules but I am bumping this thread, really need help.

ironlady2022

Hi, to the best of my knowledge, they will not extend your 0% period as they give you 1 year's grace after you graduate. Can't your parents help you out and you slowly pay them back as £900 is a small amount in comparison to others. £1 a day is a lot and I doubt you will get a cheaper overdraft elsewhere because of lack of income. If your parents/relatives cannot help you out then I suggest you find a part time cleaning job, anything to boost your income and then all of that to go towards paying overdraft off. Hope that helps.

Svenena

Agree with Mayling - you need to do whatever you can to get it paid off before they start charging. It'll be a lot harder to reduce once they are adding £30-ish a month in overdraft fees. Even if it means going a bit short for a few months, it'll save you a lot of grief (and money!) in the long-run.

DMessenger

I do have a part time job at the moment and am putting in half of the damn paycheque toward paying it off but it's really leaving me tight and I won't be able to get rid of it in time. My family just tell me not to worry about it and that I shouldn't pay it off so quickly... but yeah I just want to get rid of it now.

ironlady2022

Yes I acknowledge that you have a part time job which mean you can still get a second job. Any job would do and it would only be on a temporary basis until you paid off overdraft. Leaving it unpaid is bad advice really.

jambosans

Is your other current account with Halifax? If no, have you considered adding or increasing the overdraft on that account? Obviously check out the rates, etc. you would receive, but I would be fairly confident that most arranged overdrafts with other banks would cost less than a Halifax overdraft (they are one of the more expensive for lower overdrafts e.g. <£1500)

Have you considered a graduate bank account? This can (subject to status) provided a few more years interest free lending. See the below guide for more details:-
http://www.moneysavingexpert.com/banking/graduate-bank-accounts

The long term goal is obviously to pay it off, and I agree with other posters that additional income would be ideal, but the options I've proposed may reduce what you're paying in interest/ fees and ultimately help reduce the overdraft a little quicker.

You have to be disciplined when taking out additional credit to pay off existing debts, and any new overdraft should not be regarded as more money to spend on top of your existing debt. Overdrafts are also repayable on demand, so the sooner you it off, the better.

RGreene

Hi guys,

I am paying £1.00 per day to Halifax to be in my overdraft, and it's not a good place to be so I would definitely advise getting a graduate account to try and avoid this! I am in full time work and cannot pay off my overdraft.

I also wanted to ask a question; I went into halifax the other day and the very nice gentleman at the desk said to me that I was paying a ridiculous amount of interest (ahem, yes!) and that if I transferred a direct debit to another bank account and then brought it back to my account it would become interest free again? I asked why I had not been told this before and he said it was because they are not allowed to tell anyone!? So far I cannot find out if this is true, and I wondered whether anyone would be able to advise me the best way to find out, or whether this belongs in another thread/topic area? This is my first post too! Exciting!

Thank you

R

notafan

Move it to another bank, lloyds could be a good bet.

Its rare that a bank just gives you 1 year after you graduate, halifax is in the minority.

Most give at least two years and some even three - that includes lloyds which have say its 'guaranteed'. From memory with lloyds you have to pay in £500 a month - so your part time job might cover that and they'll ask for evidence of your current O/D - they wont go higher - but as they own halifax they might not even need that if they can check themselves.

They are normally in similar step downs as you had step up throughout Uni.

If you dont wanna use lloyds then have a look elsewhere cause there are quite a few other banks that allow you that bit longer still at 0%.

jambosans

RGreene wrote: »

if I transferred a direct debit to another bank account and then brought it back to my account it would become interest free again?

In theory yes, but the overdraft would be fee-free for 90 days (120 if you live in NI).

RGreene wrote: »

I asked why I had not been told this before and he said it was because they are not allowed to tell anyone!?

The transfer service is in place to change your main banking relationship from a 3rd party to HBOS. For the bank (in an ideal world) this would be all your Direct Debits, standing orders and salary/ other regular credit.

RGreene wrote: »

So far I cannot find out if this is true, and I wondered whether anyone would be able to advise me the best way to find out, or whether this belongs in another thread/topic area?

It's possible to switch from another bank to Halifax, so in theory you only transfer one Direct Debit (as I can't see any restrictions on the below page or form), but a switch is monitored by human beings, so who's to say they won't allow it once they see that you already have your main banking relationship with Halifax.

That said, they probably won't bother and will just perform the switch. You've got to ask yourself however, is it worth the hassle for 90 days grace? Remember, transfers go wrong, Direct Debits go unpaid, so it could be more of an inconvenience than the initial switch.

RGreene wrote: »

This is my first post too! Exciting!

Welcome to MSE, hope I've answered your questions.

madz1985

I'm pretty sure it's 2 DD's and your salary to benefit from the switching service - and therefore the 90day fee free overdraft - which is in place to help the switching process go relatively smoothly?

If you can try and get your O/D down to say £300, you might benefit from getting the ultimate reward current account as the first £300 of overdraft is fee free, this benefits people in their overdraft for near enough the whole month, plus the added benefits. It might be easier for you to get £600 saved up than £900.