What about student banking?

As well as Government and grant based assistance, students are supplementing their finances by taking advantage of student banking packages which are available from most major banks. These packages are aimed at students aged 18 years and over and include:

• Bank accounts with interest free overdrafts
• Debit cards
• Personal Loans
• Professional and Career Development loans
• Credit cards

In addition Banks often offer incentives which can include cash, mobile broadband offers, free travel insurance and retail and entertainment discounts when you open an account, which can be very enticing and useful!

The most common type of overdrafts offered to students are 'tiered' personal overdrafts where interest rates and overdraft limits are gradually increased over time. Students can take advantage of interest free overdrafts which start off at an agreed limit of between £300 and £500, subject to status and application criteria. If your account is managed well you get the option to apply for higher overdraft limits of up to £3,000. A key requirement to getting an overdraft is you must have income deposited into the account regularly, for example your student loan, any wages or payments from parents or guardians.

Managing your finances as a student can be tricky for several reasons, you may have just left school or still be living at home and not have much experience managing your own bank account, living expenses and bills. It's also a busy time moving to a new place of residence, meeting new people and getting to grips with your course work, so always think carefully about what you will be able to afford to repay before committing to student banking packages.

Unauthorised overdrafts and other debts such as personal loans and credit cards can quickly become difficult to manage and repay because of their higher interest rates and penalty charges, you could unexpectedly find yourself in a large amount of debt. Adding worry and stress about unpaid debts can negatively impact your time at University or College and also damage your credit rating, which will become important later on in life if you want to apply for credit, personal loans or a mortgage.

The key to avoiding student debt is good budget management, make sure you know what income you will have from things like your student loans, grants, part-time work etc., then work out what your expenses will be, things like rent, food, power and phone bills, books and course materials. Use our Student Budget Calculator to balance your income against your out goings and see if you can cover the additional costs of having a student overdraft, personal loan or credit card. If you're not sure what a personal loan or credit card might cost you, use our calculators to see what borrowing different amounts might cost you to repay.

Download the Student Loans PDF Guide here - see our other free PDF guides here

Guide Contents

What are student loans?
What about student banking?
Shopping around for a student bank account package
Applying for your student bank account
Student loan FAQs
Student loan help

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