Nearly 2 in 10 students have gone over their agreed overdraft limit without the lender’s approval
Exceeding the overdraft limit without approval can cost £100s or £1,000s[1] a year warns Equifax
New YouGov research commissioned by Equifax[2], the credit information provider, shows how much students rely on short-term debt, particularly overdraft facilities, to get them through university. With tuition fees costing up to £9,250[3] per year for students in England, 29% of students describe their overdraft as an essential that they rely on every month.
2 in 5 of students (42%) said that they have an overdraft on a bank account held in their name, whilst the cost of arranged overdraft facilities can be managed, more worrying is the fact that 18% of students have gone over their agreed overdraft limit without the lender’s approval. A further 14% have asked to increase their overdraft limit. It’s perhaps not a surprise then that a separate survey found that 41% of students are concerned about meeting their financial commitments over the next two years.[4]
“Overdrafts are a debt like any other credit agreement and they need to be well managed. A £1,000 agreed overdraft can cost up to £20 a month totaling to £240 per year[5], if the person is found exceeding an overdraft limit it can cost up to £6 per day or £25 per transaction[6]. These costs can soon mount up”, explains Lisa Hardstaff, consumer credit information expert at Equifax. “Not managing finances well whilst at university can affect an individual’s ability to obtain credit after graduation. It helps for students to think about a credit report as a financial CV that illustrates the history of their financial behaviour.
Whilst it’s encouraging to hear that the government is looking at ways to ease the financial burden for students, it is important to recognise that poor financial management at university can impact negatively on future financial decisions.”
Websites like The Money Advice Service offer detailed advice on student loans and student finance, how and when to make repayments and what the law says.
ENDS
For further press information, please contact: Clare Watson, Cecile Stearn, Parm Heer or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: equifaxbtocteam@harrisonsadler.com
[1] https://www.moneysavingexpert.com/banking/cut-overdraft-costs
[2] All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2122
adults.
Fieldwork was undertaken between 2nd - 3rd January 2018. The survey was carried out online.
The figures
have been weighted and are representative of all UK adults (aged 18+).
[3]
https://www.ucas.com/ucas/undergraduate/finance-and-support/undergraduate-tuition-fees-and-student-loans
[4] All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,136
adults.
Fieldwork was undertaken between 16th and 17th October. The survey was carried out online.
The figures
have been weighted and are representative of all GB adults (aged 18+).
[5] https://www.moneysavingexpert.com/banking/cut-overdraft-costs
[6] https://www.moneysavingexpert.com/banking/cut-overdraft-costs
1https://www.ukfinance.org.uk/update-on-lending-for-january-2018/
About Equifax
Equifax Inc. (Equifax) is a global information solutions company that uses unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions.
Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor's (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs 10,100 employees worldwide.
Equifax Limited is one of the Equifax group companies based in the UK.
Equifax Limited is authorised and regulated by the Financial Conduct Authority.