It is very uncommon to come across an individual in today's society who has no debt at all. In recent years, the availability of credit has increased, meaning that most people will now have a mobile phone contract, credit card, personal loan or mortgage. Debt only becomes a problem when repayments cannot be met.
In Student Funding, we meet a lot of students who have financial problems and feel their situation is out of control. Once it gets to this stage, it is no longer just a financial problem- it can take over your life. The sooner problem debts are dealt with, the less likely they will turn into a crisis situation.
The advice below aims to help you to get started in resolving your debt problems. Should you have any queries, please contact the organisations listed on the right hand side of the page.
Examine your spending habits
A warning signal is having debt that isn't really from anything. It didn't buy a car or a computer, it simply came from continually spending more than your income. Why not see where you can make savings by completing a budget plan? This can help you to get a true indication of your financial situation and can be useful if you need to request lower repayments on any of your debts from your creditors.
Be smarter with your borrowing
Traditional debt advice says 'never borrow your way out of a debt problem'. Indeed, you should never borrow more when you are already in debt, however with financial products and their suppliers competing with each other constantly, you may be able to make savings simply by being a bit smarter with your borrowing.
Being savvier with your borrowing is a great start to debt rescue by reducing the amount of interest you are paying. For example, you may wish to think about transferring your balance from your credit card, to another with a lower rate of interest.
There is always a route out
Being in debt can be a particularly stressful time. Many people are afraid to tell their family, partner or friends. There is always a way the problem can be resolved, although this may not always be quick or easy. If you are feeling stressed out by your debt problems, there are many organisations you can approach for support, and their contact details can be found on the right hand side of this page. If you feel your debt problems are affecting your academic work, please speak to your personal tutor.
- Try not to default or miss payments, and always ensure that your priority payments such as your rent and utilities are paid first. These companies do not always shout the loudest if you miss a payment, but the consequences can be far worse than if you miss a credit card repayment for example.
- If you can't make a repayment, always let your lender know so that you can make other arrangements and hopefully avoid any penalties.
- If you find that you can't make repayments, prepare a budget (try our online budget calculator) and contact your lender to advise them what you can pay and when.
- A Budget Planner can also help you to identify areas in your spending where you can make savings.
- When negotiating payment, never agree to pay more than you can afford. Even if you can only afford £1 a week, pay it and maintain the payments for as long as you need to.
- Ask your lender to stop adding interest and refund any charges.
- Look around for cheaper sources of borrowing, but remember that every application you make will be recorded on your credit file (see Credit Scoring).
- If you are at all unsure, contact one of the organisations listed on the right hand side of this page who can provide you with advice and support.
The following organisations can provide free assistance if you have problems with debt.
The University cannot be held responsible for the content of external websites. Before taking any action about your finances, you should access relevant advice from an impartial adviser.