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Understanding and managing your debts where to go if you need help.

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Understanding and managing your debts where to go if you need help.

As a student, it is almost impossible to avoid being in debt. However, not all debts are the same and it is important you understand the some of the differences. In this article, we hope to explore some of the main types of debts that students may have and signpost you to some trusted resources for further support if you need it.

Worrying about money can affect anyone at any time. It is not something unique to young people and definitely not student specific.  It's a fact of modern life and certainly not something you need to hide or be embarrassed about.  What is important is to ensure you know where to go if you need help or advice.  We also want to make sure that any help you do get is from a trusted source rather than just looking for help online and/or from posts on social media.

Before we start it's important to note that its now a fact that almost every student will borrow money to cover some or all the costs associated with studying.  However, student loans from the government are very different from other types of borrowing as although you will be charged interest, the way you will repay your loans via the taxation system, over your working lifetime, means that the repayments are normally affordable.  Also, they will not impact on your credit score and you wont get a bailiff at your door.  Because of this you do need to learn to 'compartmentalise' them as if you think of all of your debts in the same way they can impact on your wellbeing.  If you are worrying about debt, the cost of studying or your student loans, talk to someone in your institution.

I have other debts as well as my student loans, what should I do?

Student overdrafts - as well as student loans, most students in higher education will have a student overdraft.  An overdraft is when the bank lets you use some of their money while you are studying and doesn't charge you interest for using this money. They will expect you to repay the overdraft over a specific length of time after you complete your course.   While it can be worrying to see your bank account below zero, the main things to think about are: -

  • You don't need to repay this money until after you have finished your studies and even then, it will be over a specific period (normally around two years) and not just in a lump sum.
  • If you are always in your overdraft, even when you have just had your loan, make sure you re check your budget and look at your spending. Get help if you need it.
  • Don't go over your overdraft limit or you will be charged and it will impact on your credit score.

We have included a guide to student bank accounts and overdrafts below.

Buy Now Pay Later (BNPL) - this idea is a fairly new way of borrowing money by spreading the cost of paying for things. BNPL platforms such as PayPal and Klarna offer you the chance to pay for relatively small purchases over three, four or more instalments. The main things to think about are: -

  • The amounts may be small, but it is easy to get into a muddle if you buy lots of things using this method as its easy to lose track of where you are up to and  then subsequently get into debt without realising it.
  • While you may be able to spread the cost, the instalments do not always help with a student budget if you are only living off your loan and don't have another regular income.

We have included a guide to BNPL in the links below. 

Credit cards - some student bank accounts come with the offer of a student credit card.  Credit cards are a bit like an overdraft, you get a card to use to buy things you may not currently be able to afford and will be sent a bill at the end of each month.  If you don't pay it in full you will normally be charged interest. The main things to think of are: -

  • Credit cards can be a way of improving your credit score which can be good for students who have little or no credit history. However, you need to make sure you pay the bill on time every month and stay within your credit limit.
  • Although they look like a debit card, never use them to withdraw cash as you will be charged higher fees.

We have included a guide to student credit cards below.  

My debts are not from a bank or the same type of debts that my friends have got, what should I do? 

We know for many reasons that some students will have debts that are not only unregulated but may be from a so called 'loan sharks' or other illegal lenders.  If so you may feel even more stressed or embarrassed about seeking help. Please don't be, the advice lines in the resources below are all experts in this field and will talk you through your options without judging. If you don't want to call the advice lines then please speak to someone in the advice centre in your university or college who can signpost you to help.

We have included information on illegal lending in the resources below.

Where to go for more help

When it comes to debt advice you should look at trusted sources of information and/or talk to staff in your university or college.  Since the pandemic lots of adverts have started appearing on social media offering money and debt advice.  While most of these will be legitimate, we would advise you contact the organisations below or talk to someone in your university or college.

The most important thing is to talk to someone about how you are feeling and not think you must face any problems alone.


Citizens Advice
National charity giving advice and support to millions of people

Step Change
National charity that can offer support via the web, an app or by phone.

National Debtline
National charity that have some great online resources and a free helpline.

Money Supermarket - Credit Cards for Students
This guide gives information about student credit cards.

Citizens Advice - Loan Sharks
This guide is about illegal lending.

Money Saving Expert - Student Bank Accounts
This guide looks at student bank accounts and overdrafts.

Money Saving Expert - Buy Now Pay Later
This is a good guide to Buy Now Pay later from MSE.

By Lynne Condell - Student Money Advice Specialist

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