Student overdraft is going to begin charging interest

HCT95

Hi there,
I have my student account with Santander and when I reduced my overdraft I was informed that the student account runs for 5 years in total as interest free - 3 years as a uni student and 2 years after your degree has finished, which explains why they are making these changes without you informing them of no longer being a student.
It may be risky to just stop using the account all together, I would personally recommend having a look at your budget and seeing if you can afford to pay the account off in larger chunks, maybe 20% of the OD at a time if you could, dependant on how much you owe obviously.
Hope this is useful.

Lingua

Switch to a graduate account, or (if you have a decent credit rating) shift the overdraft to a 0% interest credit card and slowly pay it off monthly before the 0% grace period ends?

I would definitely recommend having a separate account (basic current accounts for those with poor credit should have less of an impact on your credit file if you wish to follow through with the credit card suggestion above). It removes the risk of the bank just lowering the limit of your overdraft once the money is deposited.

Hutchch0920

diamonds wrote: »

£56 a month for 3 years interest free loan, bargain!

...it's a fee free account so I have no idea what you're talking about!!

MrJester

So lots of opinion here, thanks all.

Basically I considered a second bank account because then I could treat this current account with the OD as just another debt, and pay into it when I can. As right now I will have to balance trying to reduce my overdraft limit bit by bit, and makes it tricky to know how much you have left at times (being in minus) etc etc

So it looks like my options are A) try and reduce it as best as possible by ringing them up and asking them to reduce the OD limit and/or when it likely comes to just before September and the fees are about to begin I will need to try and get a 0% money transfer if possible (this may become possible as one card I have just doubled the credit limit on it, which I will only use if/when it comes to august time and I need to do a money transfer to get the OD off my back - of course only if the fees of a balance/money transfer are less of that of the OD over a realistic repayment term)

So there we have it. I think this is my only realistic route. The bank im with is Barclays and they only seem to have a Higher Education account which doesn't look like any beneficial graduate account unlike others, I'm already 2 years after graduation so I don't think any grad accounts are of use to me or if they are, will only be for a limited time and will need credit checks and blah blah

grumbler

MrJester wrote: »

... makes it tricky to know how much you have left at times (being in minus) etc etc

Hardly a rocket science, especially for a graduate. And, if it's interest, not just a flat fee, you pay more interest on the debit balance if you have a separate account with a credit balance.

So it looks like my options are A) try and reduce it as best as possible by ringing them up and asking them to reduce the OD limit

You achieve nothing by getting the limit reduced, but can incur extra charges for accidentally going over the lower limit.

diamonds

MrJester wrote: »

So lots of opinion here, thanks all.

Basically I considered a second bank account because then I could treat this current account with the OD as just another debt, and pay into it when I can. As right now I will have to balance trying to reduce my overdraft limit bit by bit, and makes it tricky to know how much you have left at times (being in minus) etc etc

So it looks like my options are A) try and reduce it as best as possible by ringing them up and asking them to reduce the OD limit and/or when it likely comes to just before September and the fees are about to begin I will need to try and get a 0% money transfer if possible (this may become possible as one card I have just doubled the credit limit on it, which I will only use if/when it comes to august time and I need to do a money transfer to get the OD off my back - of course only if the fees of a balance/money transfer are less of that of the OD over a realistic repayment term)

So there we have it. I think this is my only realistic route. The bank im with is Barclays and they only seem to have a Higher Education account which doesn't look like any beneficial graduate account unlike others, I'm already 2 years after graduation so I don't think any grad accounts are of use to me or if they are, will only be for a limited time and will need credit checks and blah blah

Nothing stopping you trying a online Santander account application mentioned above, they prob want to take you from any other bank in the hope you give lifetime loyalty (how old school!).


Set up your direct debits on the account, leave enough in to cover them plus £56 each month and transfer the rest to Barclays or another or new account as your spending account.

MrJester

grumbler wrote: »

Hardly a rocket science, especially for a graduate. And, if it's interest, not just a flat fee, you pay more interest on the debit balance if you have a separate account with a credit balance.

You achieve nothing by getting the limit reduced, but can incur extra charges for accidentally going over the lower limit.

Perhaps more than tricky; frustrating to see, as well as a desire to be able to easily see my debts as separate balances that need paying off. If I remember the letter right, it's a daily flat fee which changes depending on the amount of the overdraft. Which for me, would workout to be around £45 per month.

Let's just call it OD limit, and my OD limit is £1500. So if I ask them to reduce it to £1400 OD limit, then I am effectively paying them back £100 am I not?

MrJester

diamonds wrote: »

Nothing stopping you trying a online Santander account application mentioned above, they prob want to take you from any other bank in the hope you give lifetime loyalty (how old school!).


Set up your direct debits on the account, leave enough in to cover them plus £56 each month and transfer the rest to Barclays or another or new account as your spending account.

However the issue with that is, please correct me if I am wrong, is that sure I could open a single bank account with another provider but then I just have the bank account and I am missing out on any potential bank switching bonuses? And most likely I will not be able to easily switch with an overdraft of 1,500 like I have, so that would mean it makes most sense to pay off my current OD with my current bank (Barclays) before attempting to do a proper bank switch (which I will, when I am able to).

Why did you say plus £56 each month?

Any way this method means I would likely end up with a miffed off Barclays account with an OD that they might start demanding for even sooner etc?

diamonds

MrJester wrote: »

Perhaps more than tricky; frustrating to see, as well as a desire to be able to easily see my debts as separate balances that need paying off. If I remember the letter right, it's a daily flat fee which changes depending on the amount of the overdraft. Which for me, would workout to be around £45 per month.

Let's just call it OD limit, and my OD limit is £1500. So if I ask them to reduce it to £1400 OD limit, then I am effectively paying them back £100 am I not?

The aim is to pay no interest or fees

Santander or a 0% credit card

grumbler

MrJester wrote: »

Let's just call it OD limit, and my OD limit is £1500. So if I ask them to reduce it to £1400 OD limit, then I am effectively paying them back £100 am I not?

No, your aim is to reduce the balance, not the limit.

If the limit is £1500 you are allowed to borrow up to £1500. You can pay everything you owe back and have the same limit.

If the limit is £1500 and the balance is less than -£1400, you can reduce the limit to £1400 without paying anything back.