IVA & Debt Consolidation Advice

Growing levels of student debt have highlighted the need for debt consolidation among many university and college graduates.

Research by the Consumer Credit Counselling Service (CCCS) found that on average young people between the age of 18 and 24 came to the charity with debt totalling £15,079. When combined with figures by the Institute of Employment Studies for the Department for Education and Skills showing that the average student can expect £8,000 worth of debt on completion of their studies, it is possible to see why so many graduates consider the need for debt consolidation.

And with many students about to embark on their first year of university study the CCCS and consumer watchdog Which? are warning students of the dangers of getting into too much debt.

Frances Walker, CCCS spokesperson, said: "Students should shop around to get the best deal that they can. Obviously they need to be conscious of when these deals are out. I think a lot of them go on for one, two or three years after they graduate and then they have to start paying interests.

"They need to be clear about the terms and conditions and know when they have to start repaying. There are a lot of attractive deals around for students and some offer incentives. The advice would be not to be taken in by freebies, but to look at how long you get the interest free [deal] and how long you get it after you graduate."

However, many students get in bad spending habits during their time at university and when combined with student loans find themselves in debt when they leave. A competitively priced loan could help many students in their debt consolidation needs.

Mike Naylor, Which? principal researcher, said : "Students need to borrow so an account that gives interest-free borrowing can be a really good way for them to pay for some of their studying costs.

"Using those free gifts potentially can blur the choice of what is the best account for them. It is like with any financial product, you need to look past the gimmicks and the promotions and look at how much it is going to cost you to run your account with a particular bank or how much is a particular product going to cost over a period."

Although banks are keen to lend students money throughout their time at university, many students can find themselves graduating with some level of debt – the important factor is to consider the possibility of debt consolidation with a reputable company before the situation worsens.