Getting A Handle On Your Debts When You’re A Student

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When you think about students you think about them just starting out, and the first debt they get is their student loan and student bank account, however, some people study when they are older and already have existing debt that they are now adding too. If you’ve chosen to study but you have existing debts, being a student doesn’t mean that you need to wait to start getting your debt in order at the same time as bettering yourself. 

Leaning on loans, credit cards, and overdrafts is pretty normal when getting by in university or studying from home. You should try not to let it overwhelm you. Have a look at this quick guide to help you get a handle on your debts when you are a student: 

What Is Debt? 

To put it simply, debt is a certain sum of money that you have borrowed and need to pay back in a time frame. You will usually pay interest on any amount that you borrow and have to pay it back in an agreed time frame. Borrowing more than you can afford to pay back will usually cause you problems. 

Are You In Debt With A Student Loan? 

You may feel like you are in debt just because you have a student loan from the government, however, you should try not to class this as ‘normal’ debt. It works slightly differently. This loan works completely different to a usual loan, repayment start after you earn above a certain amount after you finish studying, and usually small. Similar to paying tax. Try not to worry about it too much as there is a lot of help surrounding this including debt relief for student loans. 

Should You Take Out Credit? 

Before you pay for something using an overdraft, credit card, loan, or another form of credit you need to ask yourself: 

• Do I really need it? 
• Could I save for it instead? 
• Am I willing to pay a higher price for it when adding on the interest?
• Can I pay the balance in full when the statement arrives?
• Can I afford the monthly payments?

If you answer no to ANY of the above questions, or you don’t track your money very well, then borrowing may not be the right choice for you. If you answered yes and are confident that you can pay it off then it would be classed as good debt. 

When Dealing with debts make sure you: 

• Plan for cash emergencies. 
• Avoid paying the minimum amounts. 
• Don’t ignore any debt. 
• Keep up with payments every time. 
• If you miss a payment, hold your hands up, speak to the creditor, and get back on track ASAP. 

Remember that unhandled debt can cause you problems in the future when it comes to obtaining things like a mortgage. Studying at university or at home may mean that you are adding to your debts slightly, however, it is still possible to keep a handle on them and even get on top them so they are in good order once you pass.