Hello Dear Reader,
If you are struggling with debt after graduating from university, you are not alone. On top of tuition fees and maintenance loans, which are now estimated to average £44,000 in the UK, many students graduate with other significant debt.
Poor money management is considered by the media to be one of the main issues, with research by the University of Sheffield and comparethemarket.com discovering that ‘students will blow just over £2,700 of their loan in the first fortnight’. However, misleading student bank accounts also account for debt, as they add significant interest to overdrafts after students have finished university. Initial low interest rates, that rise significantly later, on credit cards are also a common cause for overspending and debt.
Whatever the reason for your debt, it’s important you seek help straight away, and here’s what you can do:
Talk to your family
If your mum and dad didn’t know about the loan or credit card you are struggling to now pay off, you perhaps don’t want to tell them. However, they may be able to help. If the debt is relatively small they could pay it off and set up an arrangement whereby you pay them back. While it might feel like an awkward solution it removes any interest accumulating on the amount owed and ensures you are debt free from creditors straight away.
Do not take on any further credit
It’s very important that you refrain from obtaining any more credit while paying off existing debts. If you’re struggling to make ends meet while repaying your debts it can be tempting to turn to credit but borrowing more money escalates the problem and increases your debt level. Debt is a slippery slope so if you’re struggling to make ends meet, look at ways you can make cutbacks or seek further help. Don’t take on any further credit.
Seek expert advice
There are numerous free debt advice companies out there offering help and support on clearing debts. Get in touch with someone and find out what options are available, you’ll feel better for talking and you could put down the phone with a clear point of action in mind.
Take on a debt solution
There are various debt solutions available, so it’s important you take time to weigh up your options. A Debt Management Plan is an effective solution when it comes to clearing debts, as it involves you paying one monthly payment based on what you can afford. This is usually a reduced amount however so while a DMP is more affordable, it may take you longer to repay your debts. Creditors can still add interest and fees to the amount which will also expand your plan.
An IVA (Individual Voluntary Arrangement) is another example of a solution that may be suggested. You pay a set monthly amount based on what you can afford but as this is a formal solution you pay what you owe for a set period of time, usually five to six years, and at the end of the agreement the rest of your unsecured debts will be written off. Interest and charges will also be frozen in a DMP. You can read more here about IVAs or take a look at the differences between them and a DMP. If you are in debt and struggling it is recommended you talk to a debt expert. They will be able to look at your personal finances and circumstances and explain what options are available to help you.
Love Froogs xxx
This is a sponsored post. Of course, not all students get into massive amounts of debt and lots of students get family financial help. However, it’s more the case that students are finding college life increasingly expensive and some students, like some people, find debt of any kind a spiral. I always invite comments but let’s not be too judgemental of anyone who found themselves with tricky student debt. There is help out there.