How On Earth Do I Pay It All Back!?

acheekymunky

Im in second year of university now and am i debt up to my eye balls. To be fair i havent been completely wreckless i will pay that respect to my ex boyfriend with whom i lived with before going to university. Anyway...bunnys and boiling pans aside....im in a lot of debt and i dont know how im going to pay it back once i graduate whilst still maintaining some kind of life!!

I have three student overdraft accounts, all maxed. By the end of my third year they will all be maxed at £1500 each. How do banks work out the repayment of overdrafts?

I have 3 credit cards. All maxed. one is for £1000, one for £900 and one for £700 but they will no doubt be higher by the end of my third year. To be fair i was trying to be wise by originally transferring store card balances over on 0% interest which has now run out and i cant get another 0% card!

I have my student loan which will be about £8000 when i finish. Not too sure how this repayment works either?

Do you think im best just getting a loan for about £10,000 to pay off overdrafts and credit cards and to have the student loan running alongside.

How long do you think im looking at typically for repaying all this debt?

Any suggestions would be much appreciated..

ta

svmitche

The best advice I can give you is to talk to your Uni. Either the SU or the Uni itself will have a support service which can specifically help you (like the CAB for students!).

I can't be much more help than that in practical terms, I'm afraid, but there are systems in place to help you.

When I was a student, the SU had power to grant small bursaries to help students with problems like yours, perhaps this is something to explore as a short term measure. There may be better things that you can do than just getting a whopping loan.

Have you contacted the companies involved to tell them that you are having difficulty meeting your commitment? Perhaps you could ask them to freeze your interest or something like that?

As you said, this is not entirely down to your spending, so I do sympathise with you.

Chin up!

pavlovs_dog

wowzers! thats a lot of debt.

well i guess first things first (i'll leave the technical stuff to stuwillky, he's our technical expert round here ) is DAMAGE LIMITATION.

you gotta start cutting back where ever you can to avoid sinking even further into debt...using this site is an important first step - it shows willing that yu're ready to admit you need help.

first thing that springs to mind is to say get a job, but i know little about your circumstances - you could already have one, it might not be practical. but seriously...you need to address this more money going out than is coming in thing.

do you have a budget?

next student loan installment isnt until april. have you deducted your unavoidable outgoings (rent, food, course fees etc) to see how much you have left to live on? you may find your social life has to take a backseat for a while (think of all the good that extra studying will do for your grades!)

as for summer - 2 to 3 months of spare time...some form of employment (as lucrative as possible-work night shifts/unsociable hours,or if you are good with people, something where you will get tips - waiting tables/bar work).

as for the debt side of things, go to your uni's finance department, see what help and advice they can give. you may qualify for a hardship loan, then again you may not.

it may also be wise to contact the companies that you owe money to, explain your situation, and come to some sort of agreement with regards to paying them off. i think the best idea generally is to pay off the ones with the highest interest rates first,to avoid incurring extra charges.

also, i wouldnt worry too much about your student loan for the time being, you've got another year in uni ahead of you before you graduate, so at least 12 months before you start paying back. and then its not until you are earning £15 K a year (although im not sure if that only applies to new applicants - in which case it could be £10 K- or everyone). either way, you student loan contribution is taken straight out of your wages before you even see a payslip, and as far as i know there isnt anyway to speed up repayments (correct me if im wrong stu) other than by earning more. the one benefit there is that interest on your student loan is only charged at rate of inflation,which in real terms means you should pay back pretty much the same amount as what you borrowed, maybe a few pennies more.

i'll get off me soapbox now and clear the way for the expert

zcaprd7

Don't worry - its not as bad as it seems (or could be).

Firstly, don't worry (too much) about your student loans, they get paid back when you start working. Also in real terms (after inflation) they are free so they should be last on the list of things to pay off.

Secondly, the overdrafts. Once you graduate (as long as you have been a good girl and not gone overdrawn to often - it pays to keep your bank happy) they will allow you to keep them and call them 'graduate' overdrafts - they may try and 'ween' you off them but they will not be too unreasonable, say £500 a year. They will remain at 0% so you could agree £1000 overdraft at 0% and the remaining £500 at their usual rate - not worth it as this will be a high APR but its to reassure you that they will want your custom, and (on balance) shouldn't pull the rug from under you.

Thirdly, the credit cards. This is where your real problem lies. If you can't get new credit card deals its unlikely you'll get a good offer for a loan so drop that idea. Really you need to pay them off the hard way (cutting back, part time job etc) or try to get a soft lone from a relative. Again, once you start working you should get access to better deals, but don't bank on it.

My concern is budgeting the card repayments (and not putting anymore on them) over the next year before you (hopefully) get a job - you want to keep them happy and not miss any payments - if you ring up and start saying you can't pay you may well blight your credit history over what is (to my mind) not that big a debt...we're talking about £2600 on the credit cards.

student100

As the posters above have said, one of your main priorities should be to try and save as much money as possible - and you're at the right website as far as that goes! (make sure to read Martin's articles on the main site). And if you can try to get a job or some extra income. Then with any surplus income you have, try to pay off the highest-interest debt first, which will probably be the credit cards.

I would recommend you try to seek personal advice from someone qualified, I'm sure your student union will have people to help with things like this. If not try a local Citizens Advice Bureau.

Eliza252

Hi, I am a recent graduate and I also struggled terribly with debt while at university - I was also a bit silly in my first and second year and boy am I paying as a result (literally), also sympathise with it not being entirely your own fault, it is very difficult to study and pay fees etc especially if you have a relative/relationship that has made finances worse.
Defo agree with other posts - damage control is the first step you need to make, there is no point stressing over repayments while piling up more debts. Also, do not fall into the big-old trap of thinking you will get a really flash job after graduation and all your debts will get paid off - it DOESNT HAPPEN and I know alot of graduates - Ok, enough scary speak here is my advice hope its helpful!

Someone tell me off if I'm wrong but you should definately consider using your student loan to transfer some of those credit card debts if they are high interest - - student loan is about the lowest interest you will ever be offered for a loan. I was able to negotiate a larger student loan with the help of my university.

My advice to you is first of all - stop spending right now!
~ Read this board religiously - some of the best advice you'll ever get.
~ Dont beat yourself up over your spending history - we all live and learn!
~ Budge Budget Buget - it will be truly horrifying to behold. but you absolutely must work out what your outgoings are. You really need to count every penny that goes out of your account. Thats the only way I survived my third year on a budget of £5 a week - for everything!
~ Get a job - work in a bar/student union or consider events catering - its fun, sociable and keeps you out of trouble on a saturday night!
~ talk to your university, most unis have financial advisors specifically for students and they are totally non judgemental - i had no idea how many hardship funds I was eligible for until I had asked!
~ also, make friends with your bank, they dont want to see you in a situation where you cant make your minimum repayments, thats no good for them either. My bank (Barclays) certainly not eligible for a halo but their student advisors were actually very helpful when I went to see them.
If it helps I graduated with a 16,000 student loan, 2K of credit care debts and a 3K overdraft - Its tough and I have a full time job and a part time job to pay them off - however I am still alive and kicking and through some darned hard work am paying them off at about £400 a month - so dont panic you will be able to manage - just stop the spending now!
Hope that helps
Good luck!

stuwilky

Right cheeky monkey first things first.

The 'official' student loan from SLC - Ignore it, dont worry about it yet, take as much as you possibly can from them (I'll come onto this later) and forget about it. Having said that I'll just mention how it is paid back as you say you dont know. You say you are coming to towards the end of your second year? If its a three year degree course you will not have to start paying your loan back until April 2007 (ie the April after you graduate). Repayments will only start if you are earning more than £15,000 per year (gross). You will pay 9% on anything over that. ie if you earn £16k - your repayment will be 9% of £1000 - or £90 per year, deducted from your salary every week or month. What im saying really is for the amount owing the repayments are relatively small compared to your salary.

Ok the other stuff.

I dont want to go into massive amounts of details until I know a little more about your personal circumstances, do you take the full student loan? means assessed or not? Do you get parental contributions? Do you have a job?

The amoutn of debt you are in is not unmanageble as long as you are careful. Remember you have a 3/4 month summer break coming up, it wouldnt be unreasonable to expect to earn a few grand in that time if you work full time (and not only the short term cash gain you may very well gain some experience which will help you get a job)

Once I know the answers to the above questions I can probably help more with things like Hardship or Access funds and one of two other little snippets.

But the most important thing to say is "dont let it get you down - dont forget about it and get careless, but it is manageable at the moment"