Debt Advice - Worried Student

ScottishMedic

Hi All,
I’m a final year medical student looking for some advice as I’m struggling with debt I’m not sure where best to go to first. Unfortunately I’m repeating the year – the plan was to graduate and be in a place to service these debts but that didn’t go to plan. I should graduate this summer and start job in August as long as exams go okay this time (I think they will). Money worries definitely has an impact on my studies and I don’t want them to have too much of an impact on my exams in 6 weeks’ time – I really struggled to focus over Christmas/New Year and this is one of the reasons. I apologise in advance for the long post but I thought it best to get as much info as possible to start with.
Debts are as follows:
card balance available APR
aqua £ 770.57 £ 279.43 29.60%
vanquis £ 3,345.43 £ 154.57 34.93%
cap one £ 791.96 £ 8.04 30.34%
cap one £ 494.80 £ 5.20 30.34%
halifax £ 481.60 £ 18.40 21.95%
bank of scotland £ 938.85 £ 11.15 24.95%

overdraft -£ 2,968.75
£0-£1500: 0%, £1500+: 1.3%/month EAR 16.77% plus £6/month

So a total credit card debt of £6823.21 and overdraft of £2968.75.

Here’s my monthly budget:
Income £ 624.00 - £ 924.00
SAAS £ 562.00
SLC £ 62.00
Parents £ 0 - £ 100.00
Work £ 0 - £ 200.00

Outgoing £ 1,109.89
Rent £ 430.00
Bills (electric, gas, internet) £ 41.00
Phone Insurance £ 5.69 Mobile £ 38.25
Contents Insurance £ 7.78
Credit Cards £ 270.00
Bank Fees £ 25.50
Food/Groceries £ 120.00
Social £ 100.00
Haircut £ 16.67
Transport £ 50.00
Books/Stationary £ 5.00

Difference -£ 485.89 to -£ 185.89

My parents aren’t able to give me regular money and give me sporadic amounts up to around £100 a month but some months much less.

I work on NHS staff bank and haven’t been doing shifts as firstly I was being ill at work (I think now probably resolved) and then I’m very busy with placement and studying. I’ve got final exams in about 6 weeks so I won’t be doing shifts for about the next 2 months until they are done. When I do work I probably earn £200-300 a month depending on how many shifts I do so I’ve left £200 in my higher income budget.

As far as outgoings go, I don’t often spend as much as £100 on socialising or £120 on food but these seemed reasonable amounts to budget, if I spend less then great – more to pay off debts.

My overdraft used to all be 0% but Bank of Scotland took that away about 18 months ago and moved me to a graduate account, now only the first £1500 is at 0%.
I’m practically guaranteed a job in August (as long as I pass, I don’t think anyone has ever not got a job from national recruitment process) with a starting salary around £25-30k so will be in a position to pay off debts properly and more quickly then.

I’m not sure where to go next, I’ve received some money from my university discretionary fund and from another grant source but that has only brought me to the point I am at – barely keeping my head above water. I also spoke to an advice person at the university but I’m not sure she knew an awful lot more than me.

Here’s a few things I would like advice on:
1) Consolidation loan
What do you think my chances would be of getting one. I had thought my local credit union would be the most likely place to get a reasonable rate (14.9%). They say I can put in an application but the person I spoke to on the phone was very uncommitted about chances of success. If I could get a loan which paid my overdraft and credit cards (or possibly slightly more) I could pay the loan from my overdraft until I start doing more hours at work and then make sure it’s paid through working. Any advice on how likely I am to get accepted through credit union, impact on credit file etc.

Looking online at my bank, they suggest they may offer me a loan but at almost 30%. This could be better in the short term than the impending doom feeling day to day but would need to be refinanced ASAP at that rate.

This was the preferred option that the person at the university also had when I mentioned it.

2) 0% cards
This is how I started with some of my cards which have slowly stopped being 0% and caused me more bother. I think the only one that normally comes back as a reasonable chance of getting one is the capital one 6 months 0% card (80% chance). Should I apply for one, will they give me a 3rd capital one card? This at least gives me some breathing time from some of the debt but would never cover it all.

3) Speaking to creditors
What would the response be like speaking to my credit card and overdraft providers? The advice person mentioned freezing interest – how likely is that, what impact does it have on credit file and future borrowing (I hope to have borrowing under control and massively reduced 2 years into working and be thinking about mortgages)

4) Grants/Benefits
I don’t think I’m eligible for any benefits as a student receiving government loans/bursary – is that right?

I have a list of some other grant providers that may be applicable for myself that I plan on contacting this week (several I have already emailed to ask for clarification on eligibility/application forms). Are you aware of any that may be helpful?

5) Anything else
Do you have any other advice that may be useful?

If you’ve made it this far, thank you and well done! Any advice, support or help of any sort would be greatly appreciated.

sourcrates

Hi,

It looks like something will have to give here.

Do not get any more credit, especially a consolidation loan, they are very, very bad news.

You must realise you are now in the situation where you are unable to meet your existing credit commitments, so the impact on your credit file should be your last concern, you don't have that luxury at the moment.

I suggest you give stepchange a call, they are a free debt charity, who will be able to advise you correctly on your available options.
I suspect some kind of debt management plan would be there recommendation.

Link here to there website : http://www.stepchange.org

Edit, just read the bit about a guaranteed job, so on that basis would go along with Savingfortommorows and Fatbellys advice.

ScottishMedic

Thanks sourcrates.

I'll try and get in touch with them over the next few days while reviewing options/exploring any other possibilities.

Anyone else have any advice on any of the aspects I mentioned?

gettingtheresometime

Is your mobile on contract? If not and you can unlock your phone then have a look at giff gaff.

As boring as it sounds knock the social spending on the head....if only for 6 weeks! Same goes for haircuts....or at least ask if the hairdressers do training nights at reduced/no cost.

Anything else you can sell on eBay? Previous year books?


The way to look at it you need to focus on your exams - yes you're facing a mountain to clear those debts but if you pass you'll get a seat on that chair lift...

ScottishMedic

Thanks for the reply.

Phone is on a contract but I checked the website and since I'm more than half way through I think it says I can downgrade, I never use all my data anyway! I'll give them a call tomorrow and see what I can manage to get from them.

Sadly I'm basically chaining myself to my desk until then apart from a bit of sport (pretty much all paid for in annual uni gym membership etc) so social spending should be approaching zero till after exams. Oh and food spend is reduced this month as got a variety of pasta, rice etc from parents after being there for Christmas - every little helps!

I might just have to look rugged until I get back on top of things haha. I vary from every 6 weeks to probably nearer 8-10, might just make those trips to the hairdresser a bit less frequently for now.

Much as I hate selling books (slight hoarder but major hoarder of books) it's not a bad idea. I have a LOT of textbooks and a lot of books in general that may serve me better as money just now than being dusty in a bookcase. I can always build my library after I graduate! Also have quite a bit of clothing I never wear so that could be worth putting on too.

Good thoughts of ways to minimise outgoings/maximise income, thanks.

At the moment my priority is passing exams and hopefully not having to worry about finances until after then. As you say, passing the exam gives me a ticket to much faster recovery (both as I can start back at work and I can look forward to a well paid job come August). Long term solution may well not be sorted till after then, just as long as it doesn't distract me too much!

savingfortomorrow

my advice will be at odds with how you may feel and what i would normally advise.
Get the money any which way you can. Load up on any overdraft just to get you through the exams. The exams and your placement are your only priority as long term and medium term your prospects will be brilliant. Seriously, I was there, done it and honestly, your first few wage packets will clear it all. Keep focused on the books.

It feels very difficult now but light is coming once you pass and get a graduate position. Keep eating well, sports and have small breaks from the study. Keep the minimum paid and head above water. Once you graduate, maintaining a simple lifestyle for a few months will clear those debits.

I would consolidate and look for one that allows early payment with out penalty- rather than interest rate and use it to get you through till august. Then actively overpay it. the debit way not be "cheap" but you need to pass the exam and start earning.

fatbelly

ScottishMedic wrote: »

I’m practically guaranteed a job in August (as long as I pass, I don’t think anyone has ever not got a job from national recruitment process) with a starting salary around £25-30k so will be in a position to pay off debts properly and more quickly then.

This makes you different from most of the posters here and so that's why I'm highlighting it.

Advice from savingfortomorrow is good.

greensalad

For textbooks, try to use Zapper. You scan the barcodes and it gives you the values. Then you freepost box it up and send it off.

I did it and found that textbooks went for the most cash. I made about £58. I expect medical textbooks will get you a lot more.

Get the ones you don't need sold, and then when you're a debt-free medical professional (hopefully) earning good cash you can buy the best of the best

Advice you've been given so far though sounds good. Make the money any way you can to get you through exams. Just when you start earning don't throw it all away because you think "I finally have cash to burn!" (ask me how I know)

ScottishMedic

Thanks guys, some really helpful advice. I knew my situation was different from the norm hence trying to detail everything.

I have an appointment with my bank on Saturday, their online system seems to suggest I can get a consolidation loan at horrible interest rate but means I can do exams without stress. No early repayment fee and then means I can re-consolidate to a much better interest rate basically as soon as I start earning/before (credit union said as soon as I get contracts which would be over summer)

I'll find some time to liquidise a few books - medical and otherwise. I think at last count I have something like 300+ non-fiction books and I'm sure I could let a few go!