Everything you need to know about student debt
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Students are leaving university with an average debt of £3,561 – and that’s on top of their student loans.
Research from MoneySuperMarket found that a staggering 79% of graduates were concerned about their bank balance, with 15% saying their debt amounted to £10,000.
More than half, 55%, expect parents to make up the shortfall, asking them to lend them money whilst a university.
The average family loan now totals £2,188, but only 48% of parents can expect to be paid back!
Whether you’re a student, or a parent who wants to help your young adult better manage their money, here’s everything you need to know:
Although borrowing from mum and dad may seem like the easy option, opening the right student account can help with managing money. There are a range of perks and benefits that come with student accounts.
The HSBC Student Account offers a 0% interest overdraft starting at £1,000, going up to £3,000. The Santander 123 Student Account comes with a free 4-year railcard and a 0% overdraft of up to £1,500.
But be aware you’ll be charged a higher rate of interest after graduating.
Spending money on grocery shopping and textbooks is a must, but you want to have some fun too. Budget for things like eating out and entertainment, but make sure you stick to the budget to avoid debt. Apps like Yolt or Money Dashboard can help you budget. If you’re struggling to save, the Chip app is a good start, which automatically shifts money into savings for you.
0% Credit Cards
If you have credit card debt and pay interest, then see if you can move the debt to a 0% balance card. You will need a good credit score to be eligible for the best rates, so check your credit score first at Experian, TransUnion or Equifax to see how likely you are to be accepted.
Only use the card to pay off the debt and not to spend on it. Make sure you always pay the minimum each month, otherwise you will be slapped with a high interest charge.
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