debt keeps growing due to weak pound=(

LindaS

Hi,
I got a loan from the Norwegian State Educational Loan Fund to study at Warwick University, as an overseas student. When I got my loan, the currency was nearly 14 kroner to a pound. IE I had to pay 14 NOK for every pound I got. Now I have to start paying back my loan, but the pound is so weak I only get 9.8 NOK for a pound.

And as the pound keeps falling, my loan keep getting bigger and bigger...

And to make things worse, the Norwegian Bank has just made a statement that it won't lowering interest rates (like all other European countries!). Although the interest rate isn't too bad at 6.9% (but is increasing a little every quarter).

My quarterly repayment is 8000NOK. This would have been £571 at the old exchange rate, but is now £816.

In order to pay my last repayment I had to take up an overdraft of £700, there just isn't enough money... (I earn 2000 per month, then have £490 tax plus NI, 450 rent, 69 council tax, 435 train ticket commute, you see why there's no money left at the end of the day...??).

I really don't know what to do other than move back to Norway. Which I really don't want to do.

Any advice appreciated.

bryanb

If you think things will only get worse, why not take a sterling loan to pay your debt off? At least then you will be paying in sterling so things won't seem so bad if sterling continues to fall against the Norwegian Krone.

wannabespendthrift

Hi Linda,

First thing is the £435 train commute - if you are only renting where you are living surely you can rent a flat/share a room much nearer to where you work or even change jobs to be nearer to where you live?

From your figures, your net monthy pay is £1,510 and you are paying just about 30% in travel costs? If you moved closer, you would have an easier life in terms of travel and the difference in what might be higher rent would potentially be offset in lower travel costs with some left over for living - might be worth looking into?

I know exactly what you are saying about the exchange rates - I need to send money every now and then into the eurozone and it costs me much more than 2-3 years ago in sterling but really that is just what you get with currencies. What about getting a UK loan to cover the kroner loan and at least you have a fixed sterling outgoing?

chevalier

I was just wondering if there was a system for deferring payment if you aren't on a very high income, as there is for British student loans. Or you could just write anyway and ask for the payments to be less.

chev

LindaS

You're right about the train costs - its a lot. I don't really want to move into London though (work in Islington, commute to Euston and walk from there).

How would I get a loan of 37 k when I don't have a house/ anything of value? is this what you mean, I get a £37 000 loan and pay my Norwegian loan with that, then pay off the uk loan instead? I don't think i would be able to get a huge loan like that...

wannabespendthrift

LindaS

I see what you mean about the unsecured loan of £37K - I didn't see the amount of the loan in your sig when I posted.

You might be able to get an unsecured loan of about £10K though - this would take 25% of your student loan to sterling if that would help?? I second the poster that asks if the Norwegian gov will negotiate on the amoutn of the repayment if you're having difficulty. You're paying about £200 per month then if its £800 per quarter??

Sxxx

LindaS

wannabespendthrift wrote: »

LindaS

I see what you mean about the unsecured loan of £37K - I didn't see the amount of the loan in your sig when I posted.

You might be able to get an unsecured loan of about £10K though - this would take 25% of your student loan to sterling if that would help?? I second the poster that asks if the Norwegian gov will negotiate on the amoutn of the repayment if you're having difficulty. You're paying about £200 per month then if its £800 per quarter??

Sxxx

The problem is 8000NOK wouldn't be that much if I was living in Norway and earning a Norwegian wage, it's only a lot due to the credit crunch and weak British Pound. So I doubt they would take that into consideration.

Cleosmum

I think you need to try and get accomodation closer to work and cut that travel cost right back. Maybe you could try it for 6 months and see how it goes? Would give you some breathing space though.

Billy_two_speakers

Did you know now you have finished, you can ask them to convert 40% of the loan to a grant ?

LindaS

Billy_two_speakers wrote: »

Did you know now you have finished, you can ask them to convert 40% of the loan to a grant ?

Errr, no... Who? The State Educational Loan Fund?

G'Meister

With regards to whether or not it would be worthwhile converting the loan to Sterling, I would recommend you make use of historical data available from sites such as http://finance.alphatrade.com/quotes/chart?s=%24%24GBPNOK. I must say, you were very unlucky to budget your loan with early 2000 currency rates in mind - 14 kroner to the pound was a historical high, which will likely not be reach again within the next decade. To be honest, if it gets as high as 12.50 to the pound, I would be extremely tempted to convert the loan to sterling if I were you, but yes, at the moment you're basically gambling on the forex.
I would not recommend converting your loan now, in fact I strongly recommend against it, in spite of the British Economy. That's just my take on the market though, remember this is an open forum, and anyone can post so always exercise caution when acting on info.