Student Bank Account help

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Not Too Sure
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I'm in my first year of uni and I'm in need of a PC for work (all lecturers are online), atm I'm sharing one with my family, I used to be able to manage sharing it, but now uni work has increased and lockdown, meaning my mum is working from home and less free time for me to use it.

I have a job ready, but I start it next month, and until then I need a PC.

I've looked into student Bank accounts, but I'm a little confused about them, they say it's an interest free overdraft that you start to repay after graduating, but that pretty much seems like a 3 year loan, and I feel like there has to be some sort of catch to it. I called Santander and asked more about it, and they said the catch is I need to have an inflow of £500 every few months.

Are all other banks like that? I searched on their websites and found nothing mentioning it, just that you have to start repaying after graduating. I'm currently with Barclays so I plan to open a student account with them (I was going to open one with Santander since they give the highest overdraft, but the £500 inflow thing didn't let me). Are these overdrafts meant to be used as loans? I intend to start paying it off as soon I begin work.

Also if anyone has a Barclays student Bank account and maybe can give their experience using it.
Last edited by Not Too Sure; 1 month ago
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martin7
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(Original post by Not Too Sure)
I've looked into student Bank accounts, but I'm a little confused about them, they say it's an interest free overdraft that you start to repay after graduating, but that pretty much seems like a 3 year loan, and I feel like there has to be some sort of catch to it. I called Santander and asked more about it, and they said the catch is I need to have an inflow of £500 every few months.
Banks generally require that you use a student account as a "main account" and one way to demonstrate that it's your main account is to pay your income into it. Some banks require that you pay in X amount per term.

An overdraft is borrowing money from the bank, but it's structured differently from a loan.

Are all other banks like that? I searched on their websites and found nothing mentioning it, just that you have to start repaying after graduating. I'm currently with Barclays so I plan to open a student account with them (I was going to open one with Santander since they give the highest overdraft, but the £500 inflow thing didn't let me). Are these overdrafts meant to be used as loans? I intend to start paying it off as soon I begin work.
With a loan you borrow the full amount in one go any then pay the money back over the term of the loan. With an overdraft you can use the facility and then stop using and then start again. You're using the overdraft when the balance of your account is below zero.

Typically the bank will decrease your overdraft limit in stages once you graduate to give you time to pay it off.

Note that all overdrafts are "repayable on demand", but it's unlikely you'll be required to do that as long as keep to the terms and conditions of your account.
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Not Too Sure
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But overdrafts and loans are quite similar in this scenario, right?

Would it be reasonable to use the overdraft in my case? I plan to pay it back asap

Also, as long as I follow the terms and conditions, this overdraft is really like a 3 year loan, isn't it?
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martin7
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(Original post by Not Too Sure)
But overdrafts and loans are quite similar in this scenario, right?

Would it be reasonable to use the overdraft in my case? I plan to pay it back asap

Also, as long as I follow the terms and conditions, this overdraft is really like a 3 year loan, isn't it?
I don't personally think it's helpful to look at overdrafts as being the same as loans. They are both ways of borrowing money from the bank -- but that's where the similarity ends.

A loan is paid out in one single chunk and you repay it in equal installments over the term of the loan (e.g. you borrow a single sum of £1200 which is paid to you immediately and which you pay back £100 a month every month for a year).

An overdraft is a way to borrow flexibly from the bank. You can use as much of it as you want to, when you want to, you pay back what you want when you want. If your balance goes below zero you're using your overdraft. When your balance goes back above zero then you're not using your overdraft. Effectively, the overdraft on a student account allows you to have a debt of up to your overdraft limit at any time up to when the overdraft facility is removed.
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999tigger
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(Original post by Not Too Sure)
I'm in my first year of uni and I'm in need of a PC for work (all lecturers are online), atm I'm sharing one with my family, I used to be able to manage sharing it, but now uni work has increased and lockdown, meaning my mum is working from home and less free time for me to use it.

I have a job ready, but I start it next month, and until then I need a PC.

I've looked into student Bank accounts, but I'm a little confused about them, they say it's an interest free overdraft that you start to repay after graduating, but that pretty much seems like a 3 year loan, and I feel like there has to be some sort of catch to it. I called Santander and asked more about it, and they said the catch is I need to have an inflow of £500 every few months.

Are all other banks like that? I searched on their websites and found nothing mentioning it, just that you have to start repaying after graduating. I'm currently with Barclays so I plan to open a student account with them (I was going to open one with Santander since they give the highest overdraft, but the £500 inflow thing didn't let me). Are these overdrafts meant to be used as loans? I intend to start paying it off as soon I begin work.

Also if anyone has a Barclays student Bank account and maybe can give their experience using it.
Its an overdraft.
The £500 thing is toi make sure you are using it and theres enough activity going on.
Where has your student loan been paid?
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Not Too Sure
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(Original post by martin7)
I don't personally think it's helpful to look at overdrafts as being the same as loans. They are both ways of borrowing money from the bank -- but that's where the similarity ends.

A loan is paid out in one single chunk and you repay it in equal installments over the term of the loan (e.g. you borrow a single sum of £1200 which is paid to you immediately and which you pay back £100 a month every month for a year).

An overdraft is a way to borrow flexibly from the bank. You can use as much of it as you want to, when you want to, you pay back what you want when you want. If your balance goes below zero you're using your overdraft. When your balance goes back above zero then you're not using your overdraft. Effectively, the overdraft on a student account allows you to have a debt of up to your overdraft limit at any time up to when the overdraft facility is removed.
Ohh ok, thanks for the explanation

(Original post by 999tigger)
Its an overdraft.
The £500 thing is toi make sure you are using it and theres enough activity going on.
Where has your student loan been paid?
Long story but I don't have a maintenance loan. I don't think Barclays has that £500 thing, so would it be reasonable to use that overdraft on a PC? Or is it usually only meant for emergencies?
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999tigger
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(Original post by Not Too Sure)
Ohh ok, thanks for the explanation


Long story but I don't have a maintenance loan. I don't think Barclays has that £500 thing, so would it be reasonable to use that overdraft on a PC? Or is it usually only meant for emergencies?
You dotn have a maintenance loan? because you are international or EU?

If you get an account with an OD then use it for what you like.
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Not Too Sure
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(Original post by 999tigger)
You dotn have a maintenance loan? because you are international or EU?

If you get an account with an OD then use it for what you like.
There's another reason, but once I begin work I should be eligible for the Santander student bank.

Oh ok, thanks. Was just double checking if this is the type of thing that it can be used for.
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999tigger
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(Original post by Not Too Sure)
There's another reason, but once I begin work I should be eligible for the Santander student bank.

Oh ok, thanks. Was just double checking if this is the type of thing that it can be used for.
Suit yourself I no lonmger have the energy chasing students for info that would be relevant from the beginning so I cna see the whole picture.
I based my answers on the partial information you gave.
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Not Too Sure
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(Original post by 999tigger)
Suit yourself I no lonmger have the energy chasing students for info that would be relevant from the beginning so I cna see the whole picture.
I based my answers on the partial information you gave.
Ohh mb. I do receive a maintenance loan but it straight away all goes towards expenses. So not really in my account for more than a few days.
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