Grad Loan + some general advice

Joonyer

Hi all

New to the boards but really starting to realise I should have been here a while back!

I'll try to keep this as brief and to the point as possible. I made this post intially on the Loans forum as I hadn't actually noticed this board, so apologies for making it again but it's far more relevant here.

My current situation.

I'm about to finish my 3rd and final year of uni (on may 6th) and I'll be moving in with my gf straight away (I'm 22 and had a gap year last year working for a loan company). We have our flat, signed and paid for etc, and it's ready to go.

I took a gap year after my 2nd year, with the aim of working full time and making some cash. Due to reasons I won't disclose, I ended up working less than full time, and spending far too much constantly. I'm hugely regretting it now but never mind!

I owe my gf's dad a bit of rent money which he's cool for until I'm sorted - I'll be getting into work asap as I'm speaking to graduate recruitment agencies and seeing my careers advisor again on monday, along with mountains of help from a financial/business whizz that I live with (legend he is). I'm on for my 2.1 and I'm hopefully heading for sales/PR line of work, and I'm extremely confident that I'll be sorted within a couple of months.

My finances

I will be leaving uni £2,000 overdrawn on a Natwest graduate account. Now, I lied to Natwest at the start of the year and told them I had graduated so I could get the extra £300 on the overdraft (needed it at the time) which they believed as I'd had a gap year and never told them. The interest free bit on this, I presume, will run out very soon, though I need to look into that.

I have a natwest credit card with a £350 limit, which currently has £300 on it and I'm paying the minimum each month. I've had it at £350 since I was 18 and I'm really good with it generally, but obviously would like to clear it.

I also have a standard overdraft of £150 with Lloyds TSB on a current account, which accrues small amounts of interest, but also has £25 a week going into it, so it's not a big problem, and will be cleared with my grad loan, then I'll be closing the account.

On top of that, I owe a bit to my gf's dad like I say, so basically I'm contemplating a graduate loan.

The problem

What I need to know from you knowledgable lot is, would it be better for me to go and speak to natwest, and convince them to give me the graduate overdraft interest free for another year - I'm an incredibly good liar, and I'll just inform them that I told them after my 2nd year that I was having a gap year, so this is their mistake and not mine, and I'm not happy about it at all, and am contemplating moving my business elsewhere.

Would this work? They'll either say "you're lying, we know you're lying, so we're either gona do you for fraud or you're gona pay it all back now." In this instance, I'll need an extra £2k on my graduate loan to clear that overdraft immediately. However if I can get it interest free for another year, would it be more financially viable to get £2k LESS on a loan, and just pay the overdraft off gradually throughout the year? This would require me to be pretty strict, but I'm more than prepared to do it now I'm in my own flat and there's so much at stake.

Secondly, my credit card. Do I account for the £300 on it with my grad loan and just clear it so I don't have to worry, or should I balance transfer it, so it's interest free for a few months, and pay it gradually like that?

My only qualm with that would be that if I'm paying for rent, council tax, bills, grad loan repayments, credit card repayments, and my overdraft each month, it's gona be pretty damn tight.... So that's why I was contemplating just getting a bigger grad loan and clearing the overdraft and credit card, so I can just focus on repaying the loan.... but that might mean I pay more overall, depending on the loan, which is what I don't want, and why I need you lot!

So yeah, I'm a bit confused. As ironic as this sounds, I'm pretty good with money when I need to be. The only reason I've got into this situation was down to a weed habit (behind me now, don't judge!) but even then, I've never got myself in any REAL trouble. I could have upped my credit limit long ago but didn't out of choice. The only bad thing was lying about my graduate status, but I can blag that as a mistake.

I've got a meeting with a halifax advisor on wednesday to discuss opening an account with them for when I'm working, and doing a balance transfer on my credit card. My gf works for them so it would make life easier for us both overall.

So what would you advise? Do I get a big grad loan and clear all my little debts? I don't mind keeping them all and juggling them carefully, I'm fine with it and I know that sometimes consolidation can make you worse off, so I'm being cautious with it really.

The graduate Loan

Next is Grad Loans. Could you please recommend me the best deal for my situation? Which bank should I use, and what should I say? I'm hoping that from my current situation, my degree and my career focused state, it won't be an issue. I used to work for a loan company (gap year) and we were throwing loans at people who were NEVER gona be able to pay them back; however with the current issues with interest rates etc, I'm a bit concerned that people won't be willing to lend at a decent rate as it HAS to be unsecured. I don't want to secure it on my parents or anything as I need to do this for myself and build a bit more of a credit rating.

Any advice AT ALL is welcome and appreciated. I'm not great at maths but I can manage my money, I just need some expert advice (beyond that of my legendary housemate, who actually steered me to this site).

Thanks in advance, and sorry for the epic post!

Regards,
/J

**ADDITIONAL**
PLEASE don't get all moral high-horse on me about the blagging part - I realise the risks and it was only a thought, as overdraft interest is one of the cheapest forms of credit for banks so they tend to be quite leniant and I think I could pull it off (as I did the first time). Some guy on the other board just made idiot remarks at me which helps no one.

Also, dannynixon had a good idea here, if I decide not to get a loan. http://forums.moneysavingexpert.com/showpost.html?p=10501337&postcount=7

Joonyer

Well I really didn't think it was that serious... originally the graduate overdraft thing was more of a naive mistake that I didn't rectify... they didn't spot it, and now I'm entitled to my graduate year overdraft surely? And I agree, but please read it all and advise where necessary... we've established that it's better that I do it honestly and I acknowledge that wholeheartedly, but please, I'm asking for help here and would greatly appreciate some advice as to graduate loans at the moment - honestly, all I want is some help, I'm trying to get my life on track here before things go wrong. We all make mistakes, no one's perfect, and I'm trying to sort myself out.

Please, I implore you, can we all stop focusing on the mistake I made when desperate for money - if everyone here can honestly say they've never done anything even remotely dishonest in their life I'll be pretty shocked.

Thanks again in advance,
/J

Joonyer

Fair enough and that's greatly appreciated mate but they'd have to prove who it was, which is pretty difficult over the internet as there are absolutely no details linked to my user name, my account, or this post, that anyone could track back to me specically, and as far as I know, if the site owners revealed my IP to anyone who asked, it would be against the law... anyway please can we get on track? Do you think I can avoid getting a grad loan? I reckon I can if I just do a balance transfer on my credit card, and get into work ASAP, which I will be as I'm extremely career focused at the moment...

Northern_girl_2

You're level of debt is about the same as mine when I graduated. A very unscientific poll of my friends would suggest it is fairly normal amongst students to have lived in their overdraft for most of their undergraduate years.

Your bank will probably remove the interest free component of your overdraft gradually (mine went down b £250 each year after graduation) so there isn't an immediate pressure to pay it back. Your credit card debt is fairly small so the minimum payments won't be much either.

If you only want the graduate loan to consolidate your debts I would advise against it. Once you get a job and with a bit of budgeting the debts you listed can probably be paid off quite quickly. At the moment all of your repayments are fairly flexible but if you take out a grad loan you will have a fixed monthly payment.

I definitely wouldn't get a graduate loan to cover your interest free overdraft!

When I did my Masters I ran up some extra debt on a credit card and ended up taking out a grad loan. It alleviated immediate cash flow problems but now I'm earning fairly good money I wish I had the flexibility to pay it back in bigger chunks to save on the interest.

Hope that makes sense.

Joonyer

Aaaah that's fantastic news, I thought it literally went from being £2k interest free, to suddenly charging full interest over night once the year was up... naive as I am haha! This place is great, you all speak such sense!

It was mainly to cover some rent and bills for the first few months but my gf can support us for now - our first month's food is sorted as is the rent and council tax so as long as I get pro-active the minute I move in (which is 1.5 weeks from now!!) things should be ok. I'm pretty confident anyway, and if I manage to totally avoid getting a loan then things should shape up nicely.

Thanks so much for taking the time to reply, it's hugely appreciated, and I know you're well aware of how I'm feeling right now lol!

Cheers again,
/J

Joonyer

Argh I've just had a huge phone bill through!! I'm sick of Orange, they always seem to find a way to give me a huge bill, even when I'm SO careful with my minutes! I'm sure I didn't go over them this time Duno what I'm gona do... I'm moving in less than 2 weeks though so I think I just have to hold on until then, and get working ASAP...

Do graduate loans require a graduation certificate? Because I won't get that until september... Also who is best to speak to about current grad loans?

Cheers,
/J

Northern_girl_2

Joonyer wrote: »

Aaaah that's fantastic news, I thought it literally went from being £2k interest free, to suddenly charging full interest over night once the year was up... naive as I am haha!
/J

I'd double check with your bank just to make sure though because all of them work it differently.

If you are going to take out a graduate loan the best place to start is probably the bank you have your student account with. I got mine through HSBC when my student account was transferred to a graduate account. They didn't require proof of graduation but they did need evidence that you had a firm job offer. If this is the case you may not be able to go down this route (and if you had the job you probably woudn't need the loan).

I don't know whether this is possible but can you transfer your overdraft on to a credit card with an interest free balance transfer. Even if it was just £500 of your overdraft it would relieve your immediate cash flow problems. Don't want to encourage you into more debt but it would be a way of avoiding the graduate loan (which is more debt anyway). If you're cofindent of getting a job fairly quickly then you would be able to pay off the credit card before the interest free component ended.

Honeybee_2

How long is your contract with Orange? Pay as you go packages can work out a lot cheaper when you facor in the extras you can add. I used to be on contract for my mobile and paid silly money per month, I now pay less than £15 per month on pay as you go and that's including extras of 400 texts and 150 off peak, cross net minutes per month. In addition to that, I get 10% of my top ups back every 3 months, might be worth looking into.

Joonyer

@Northerngirl: I've done a bit of research and I'm pretty sure that I can indeed get another year interest free on my natwest overdraft, as they've acknowledged it was their error, as they even said to me once face to face when paying money in "So you're a student right?" and I said "yep" and they could see on the screen that it was a graduate account. Threatening to move my business elsewhere seemed to do it, so rather than transfer it to a credit card with a fairly high rate of interest, I'm just going to keep paying off that overdraft for the next year or two.

I think I'm going to try and totally avoid the grad loan altogether - as long as I get working quickly, which I will (I'm on it already) then things will be fine, as my gf can carry us through for a month or two if necessary.

My housemate helped me work out that even if I only started at £17,500 basic, I'd still take home over £1100 a month, which needs to cover my £300 of the rent, council tax, and food, then the I could put £100 a month minimum into my natwest overdraft, and still have plenty left as needed, meaning I could be out of my overdraft in 16-20 months if I'm sensible. I barely ever drink, I don't smoke, and I have no problem with not going out (I've just finished 4yrs of being a student... it's out of my system now) so I think I should be ok.

@Honeybee: My contract ends on june 23rd. Generally it saved me a lot of money as I used to send 3000 texts a month easily, but I think going on a basic pay and go package for a few months might be the best move. If I've got less credit then I'll use less - plus I won't need to ring the gf or text her as I'll be living with her! If my mates need me they can phone me lol. I'll definitely look into that - the only thing that really made me want a new contract was the new phone they'd give me, but of course that's me being pulled into some really basic marketing ploys!

Your advice is hugely appreciated both of you, and I think I'm seriously going to try to avoid this grad loan idea. I think if I'd had big credit card debts then I'd need one, but it's well under my limit and paying about £7 a month at the moment, which I can happily ignore. I never spend on my CC any more, haven't for months and don't plan to, so it's not a big issue. The phone bill today was my largest ever @ £170 which nearly made me vomit, and I'm about to ring them but I know there'll be nothing I can do about it. It's a horrific amount, argh! Oh well, watch this space, I'll keep you updated.

Thanks again to all of you - seeing it on "paper" and getting some other perspectives has really opened my eyes.

regards,
/J