Many student accounts offer an interest free overdraft that lasts longer than your course. This means you can pay it off over a few years.
Student overdrafts can be interest free for up to six years, or three years after graduation.
They usually change into a graduate account after you finish your course and often start to reduce how much of your overdraft is interest free each year. When the free period ends you will start paying interest on the amount you owe.
However, you can continue to use your student account after you graduate or get a new student account that offers a better overdraft.
Your account terms may change after you graduate. Check the small print or ask your bank the following:
Will it still have the same interest free overdraft after you graduate?
How long will it last?
What fees and interest will you have to pay after the overdraft is withdrawn?
You can still apply for a new graduate account if you can prove that you have graduated with a copy of your qualification certificate.
You could also get a new graduate account with a different bank if you want one with better features, such as:
If your account no longer offers an interest free overdraft
If it offers an interest free overdraft that will end soon
Some banks let you switch to their graduate accounts up to three years after you finish your course.
Find the longest interest free overdraft that will cover the amount you still owe. Some accounts offer overdrafts of up to £3,000.
If you find an interest free overdraft that lasts longer than your existing bank account, you will have longer to pay off what you owe without any charges.
Some offer overdrafts that are gradually withdrawn each year, for example:
Year one: £2,000
Year two: £1,500
Year three: £1,000
Your new current account will pay off the overdraft on your existing student account. You will then owe that amount on your new graduate account.
Moving to a new account is simple and only takes seven days. Here is how to switch to a new current account.
The bank will run a credit check when you apply to help them decide if they should accept your application and on the size of the overdraft they can offer.
If you do not have an overdraft and will have a positive balance, you can choose an account with other benefits like:
Access to exclusive discounts
Interest on your positive balance
Restaurant discount schemes
To switch to a graduate account you may need to prove that you have graduated by providing a copy of your degree or qualification certificated.
You may also need to provide documents to prove your identity and address.
New bank accounts are launched all the time, so compare all of the best options to make sure you get the right one for your circumstances.