Getting out of my Student Overdraft

Largoh

I took out a student current account with Halifax while at Uni which allowed for a £3750 overdraft. I was living in a privately rented house with my girlfriend at the time which wasn't cheap so I ended up using most of the Overdraft as I had more going out than coming in.

I finally got a job just before I hit £3000 on my overdraft which allowed me to survive at least.
Unfortunately my new job is 50 miles away so I'm paying around £400 a month just to get to and from work. This is making it very difficult to get out of the Overdraft.
I've also recently split with my girlfriend so that's hit me financially too. I was doing well getting out of it until that happened.

Yesterday I got a letter from Halifax saying that my Student Account is being converted to a Current Account and that I'll be paying £2 or £3 a day for the privilege of keeping the Overdraft that I can't get out of!

I have no idea what to do. My first idea is to get a £3000 loan to just stick straight into my account to bring me out of my Overdraft but I'm not sure if that's the best idea.

opinions4u

Loan will probably be less interest than the Halifax charges on an overdraft.

It may also discipline you.

The problem is if it doesn't. Far too many people take the loan and then buildup the overdraft again.

CLAPTON

move nearer your job
move somewhere cheaper
if you can get a loan at a reaonable rate then that would be a good idea

bpsp10

Largoh,

does your Student account not turn into a graduate account?
When did you graduate? You can get graduate accounts with up to £2,000 overdraft that taper off over 3 years (so overdraft decreases)

rdchick

I was in the exact same situation - walked into Halifax asked for a graduate account- walked out with £3500 loan and now £7K+ debt.

if you get a loan CLOSE DOWN YOUR OVERDRAFT!!!

bargainbetty

If your overdraft is increasing monthly, then you are still living beyond your income. Prepare a budget, an honest one, and see where you can tighten your belt, allowing for the additional cost of paying off the loan/overdraft fees.

You might need to consider relocating - how long do you have on your lease? Go into branch and speak to an advisor about how you might restructure things, but only do it once you know what your budgets are.

Good luck.

Bravehearted_2

You've been living beyond your income SINCE uni.

A £400 per month private apartment isn't the option a student should be using. Not to speak of funding it with an OD.

Largoh

Like I said, before the break up I was doing ok getting out of it, but wince we've broken up I need to pay out more.
Cutting the Fuel Cost is the most obvious thing, but I can't move away from my current place. I have another year on the lease.

I've spoken to Think Money. They work out that after my bills ect I have about £100 a month to spare. They're going to call me back later with some ideas on how I can get out of this situation by consolidating my loans and outstanding credit agreements.

If I were to get a loan, it would only be for £3000 maximum and it would go straight into my account to bring me out of the overdraft.
I'm hoping my car insurance goes down next month too which should help. Also one of my credit agreements comes to an end next month which will save me £55 a month.

Apparantly Halifax doesn't offer a Graduate Account, but RBS does. How would I move it all over? Do they do that automatically?

I actually graduated this year, so I'm going to try to find my proof and take it into a branch to extend my Student account for another year. Not sure what I'd need as proof though.

bpsp10

Largoh,

go to http://www.moneysavingexpert.com/students/graduate-bank-accounts

Lots of information about best graduate accounts etc etc. I believe you just go in to the new bank, say you want their graduate account and want to transfer your old account to the new?

bargainbetty

Please don't touch Think Money, or any other agency that offers a 'single easy payment'. Consolidation is useless unless you have things sorted. You still need to do a budget to show where the loan payment is going to come from. Do your own, please don't trust them, and make a very strong point of asking them where their fees come from - who pays for them?

Can you speak to your landlord about a break in your lease? If you have more than a year to go, there should be a clause somewhere allowing for an early break.

saygoodbyetothese

Take a look at the documents Halifax have sent you - there may be another option.

When my student account with Barclays ran out, they wrote to me saying they would automatically put me onto a normal account with approx 18% APR on the overdraft. However, in the documents they sent me there were other options for graduate accounts, and I now pay a £7 account fee every month to keep the 0% overdraft while I pay it off. Definitely worth talking to your bank to see what other options they offer. Explore all your options before considering getting into more debt.