New PhD Student - Bank Question

matt147

This is my first post so hi to all other users! I'm 25, in quite a lot of student debt, and about to start a fully funded (fortunately) PhD in October.

I have an HSBC graduate account and pay back £305 a month (irrespective of status, eg unemployed, student etc.) for 2 professional studies loans I took out 2 years ago. I was given a 12 month 'grace' period plus an extra discretionary 6 months grace between my last course finishing and the start of repayments. I have now decided I want to do a PhD (I know, I haven't made things easy for myself!). This, added to my previous large overdraft debt, has meant my overdraft has increased from £-1750 to £-3000 over various requests. It is currently due to reduce to £-2500 this December. I am paying interest on this atm. I also have a credit card which has a £500 limit and which is £10 short of being maxed out. I am temping until October.

This October I start my PhD and, with my fees paid for by the university, will be on a maintenance studentship of £3150 per quarter (this is not subject to tax or NI). I feel some loyalty to HSBC given their flexibility with the postgrad loan repayments start-date I was granted and their overdraft facilities, although I know I should look for the best bank deal.

This has thrown up a few questions. Eg, should I keep my current bank account and interest levels, lest my overdraft dramatically reduce if I went back to having a student account? Or would they perhaps allow me to transfer my overdraft to a student account and give me the first £-1750 (HSBC's student limit) interest free? If other banks offer better interest deals (I am currently £-2900 overdrawn and paying c.£23 a month in interest) would I be allowed to transfer my overdraft to them? Should I open up a separate higher interest account in which to put my studentship? I have an almost empty ISA with Abbey too.

If anyone has any advice on any of the above I'd be really grateful. Sorry for the long post and thanks for reading if you got this far!

melancholly

you should be able to go into the uni branch of HSBC and have your account changed back to a student account. then your overdraft should be interest free (at least some of it). you can then pay in every free months to that and pay off huge chunks of your loan.

you'll probably need to speak to someone at HSBC about what they can offer you, but i think the best thing to do is get a student account and have all your stipend paid in there. then transfer most of it out (e.g. pay off lots of loan, pay 2/3 of the rest into a high interest account and pay that back into your current account as a monthly budget).

within the first 2 years you should be able to clear your credit card and overdraft and pay back lots of your loan (or less - depends on how frugal you want to be!). then you can start saving up in your ISA (I wouldn't worry about that until you aren't in commercial debt).

kelloggs36

Never feel the need to be loyal - I can guarantee they won't be to you!!! They may have been flexible, but believe me it is in their best interests that they seek, not yours. Go for the best deal for you!