Stay in control of your debt and borrow sensibly

This National Student Money Week, we’re focusing on helping you feel future-ready, and a big part of that is understanding how to manage debt confidently. We’ve partnered with our fantastic Funding Team to share practical advice on borrowing, repayments and making informed financial choices.

First things first: not all debt is bad.

It’s completely understandable to feel uneasy about the word ‘debt’. But some borrowing is structured to support you – as long as you understand how it works and use it carefully.

Student Loan repayments: what happens after graduation?

Take your Student Loan, for example. Many students worry about it hanging over them in the future, but it isn’t the same as a commercial bank loan and it doesn’t affect your credit history in the same way.

You don’t need to repay anything until you’re earning over a certain salary threshold (check your repayment threshold here). Repayments are based on what you earn, not what you owe, which helps keep them manageable. If your income drops below the threshold, repayments stop. Payments are usually taken automatically through your employer, without any extra admin for you to organise.

It can be helpful to think of a Student Loan more like a graduate tax than traditional debt. Depending on your loan plan and where you’re from in the UK, any remaining balance is written off after 30–40 years. Once it’s written off, you won’t need to repay anything else – even if the full amount hasn’t been cleared.

Overdrafts: helpful tool or hidden trap?

The honest answer? They can be both.

Student overdrafts are designed as a short-term safety net, not a source of ongoing income. Many student accounts offer an interest-free overdraft, which can be useful for unexpected expenses. The key is to treat it as a buffer for emergencies rather than extra spending money.

If you find yourself regularly relying on your overdraft for everyday essentials, that’s a sign it might be worth reviewing your budget or checking whether you’re eligible for additional financial support through the University.

It’s also important to know what happens after graduation. Interest-free overdraft limits often reduce over time, and charges may be introduced. Planning ahead and gradually reducing what you owe before you graduate can make the transition much smoother.

Graduate accounts: read the small print

Banks often promote graduate accounts with temporary benefits, such as extended overdrafts or short-term interest-free arrangements. These can be useful while you’re finding your feet after university, but they’re not all the same and the benefits don’t last forever.

Before agreeing to anything, take a moment to check how long any interest-free period lasts and what happens afterwards. Understanding when charges might apply will help you avoid surprises later. Remember, you’re not tied to your student bank permanently – it’s always worth reviewing your banking options to make sure your account still suits your circumstances.

Buy Now, Pay Later: convenience with caution

Buy Now, Pay Later services, like Klarna, can make purchases feel more affordable because the cost is split into smaller payments. However, they are still a form of borrowing and can be easy to lose track of.

Before using them, pause and ask yourself whether you would still buy the item if you had to pay in full upfront. Make sure you understand the repayment dates and what penalties apply if you miss one. Used occasionally and intentionally, they can be manageable. Used regularly without a clear plan, they can build up quickly and become harder to control.

Paying off debt: steady progress matters

If you already have debt, try not to panic. The most important thing is not to ignore it. Having a simple, realistic plan can make things feel far more manageable.

Start by getting clear on what you owe and to whom. From there, you can:

Focus on clearing higher-interest debts first, as these cost more over time.
Set a fixed weekly or monthly repayment you know you can afford.
Cut back temporarily on non-essential spending to free up some breathing room.
Speak to your lender early if you’re struggling. Many will agree to a payment plan if you contact them before you miss payments.

It’s also worth remembering that everyday commitments like rent and household bills need to stay a priority, as falling behind can lead to additional charges or affect your credit record. Setting up Direct Debits can help you avoid missing payments – just make sure you keep enough in your account to cover them.

If you feel unsure about what to tackle first, or your situation feels overwhelming, seek advice sooner rather than later. You can call UBHeard on 0800 917 9379 and ask for help with managing your finances.

Clearing debt doesn’t usually happen overnight, but small, consistent steps can help you move forward with confidence.

A final reminder

Borrowing money as a student is common, and it doesn’t mean you’ve done anything wrong. The key is understanding how different types of borrowing work and making informed choices about how you use them.

If you’re unsure, you can speak to the Funding Team for support; they’ll be in Careers Corner in the Main Library tomorrow, Thursday 5 March 2026, 12:00-15:00 (ground floor, behind the IT desks). You can also explore our financial support pages for more tips and funding.

Taking time to understand your finances now is a positive step towards feeling confident and in control in the future.