Which? student finance top tipsWhat you need to know before going to university
14 August 2013
With this year's A-level results due out tomorrow, it's a good time to start thinking about how to look after your finances while at university. Which? Money rounds up top tips for students.
1. Get an interest-free overdraft
If your outgoings are likely to exceed your income while at university, the main selling point with any undergraduate bank account is a large, interest-free overdraft. This means you'll have access to extra cash when you need it without interest racking up. It's common for undergraduate accounts to offer a free overdraft, though exactly how much can vary widely.
In the first year of study, you should be able to get an interest-free overdraft of at least £1,000 with most of the major banks, though this may depend on your personal circumstances. If you're worried about getting into debt early on, choose a student account that offers a tiered overdraft limit that can be increased incrementally each academic year.
To work out what will work best, take a look at our student bank account reviews.
2. Watch out for student account charges and fees
If you go over your free overdraft limit, the bank will normally charge interest or fees. If you find yourself in a tight spot, you'll usually pay much less if you contact the bank and formally arrange for the limit to be increased rather than go over it without telling them. Some banks may allow you to extend you free limit. If you do go over your student overdraft limit without authorisation, interest can rise to almost 30%. You may also be charged a penalty fee.
3. Don't be dazzled by freebies
Many banks offer freebies and perks along with the interest-free overdraft to get your attention. This can range from money off travel insurance, shopping discount cards, to a free Young Person's Railcard for discounts rail services throughout the UK. It's worth seeing what's out there, particularly if the freebie is something you'll actually use. However you need to weigh up the money you'll save against the value of the best (and biggest) interest-free overdraft.
4. Claim student loans and maintenance grants
Full-time students starting a higher education course this year can apply for loans to help with tuition fees and living costs. In England, a loan for tuition fees of up to £9,000 is paid by the Student Loans Company directly to your university. Welsh students receive a loan of £3,575 a year to cover their fees and a tuition grant to cover the rest, while Scottish students at Scottish universities don't pay any fees.
You will also get a second loan, for maintenance, which is paid into your account at the start of each term. The exact amount you can borrow depends on where you live, your household income, when you start your course and what year of study you're in.
Find out more with our guide to student loans and grants.
5. Travel home cheaply
It's likely that you'll want to visit home at least once a term, and when you do make sure you don't pay over the odds to get there. If you're travelling by train book tickets in advance as they will be cheaper. Advance fares tie you to a particular train, though, and are not refundable so you don't want to change your plans, or miss your train if you can help it.
Those aged between 16 and 25 or those over 26 in full-time education can get a 16-25 railcard which will cost around £28 for a year but will get you a third off standard and first class train fares, including advance tickets. The only restriction is a £12 minimum fare before 10am on a weekday (expect in July and August).
Read our guide to cheap train tickets.