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Choosing the right bank account is essential,
you will need a bank account into which you can put your student loan
and this also makes repayments easier and sometimes the loan can be cheaper
if you repay them by direct debit. There are multitudes of banks out there
each offering different accounts and trying to catch the eye of the student
and draw them in by offering various deals or items of interest to the
student such as mobile phones and mp3 players free when you sign up for
the account.
The reason why the bank wants the student as a customer is because they
are seen as potential high earners and also long-term customers. When
looking around at the different banks and building societies it might
seem that the biggest choice you have to make is which free gift you prefer,
however, there is more to it than that and there are more fundamental
reasons for choosing your account.
The important points to consider
All students unless they are very lucky will fall into debt, so you should
choose a bank that offers an interest free overdraft. Most over drafts
for the student start at around £1,000 for the first year and then rise
to around £2,000 during the third or fourth year.
When going with a bank that offers an overdraft make sure that one of
the things you check is the interest rates that are charged should you
go over the limit, while the overdraft itself is interest free up to a
limit, if you go over this limit then you will be charged. Banks vary
greatly in the amount of interest they charge for this starting from 16%
and going up to as high as 29.8%.
Easy access
One of the most important points for the student to consider is access
to your money once you have the account and your student loan in it. A
cash machine is a big plus so check that the bank has cash machines in
various parts of the country and in particular near your campus, so your
money is always within easy reach.
You should also consider whether the bank has a student advisor who can
help you with your finances should you need them, what services they offer
and the services they offer once you have left college or university.
After you have checked out the various websites and seen what they have
to offer then visit the branch nearest your campus or home, make an appointment
and ask questions.
Some offers are only available on line when you sign up so be wary if
you are going for a special offer when actually signing up for the account.
Other important points which you should consider are does the bank offer
internet banking and telephone banking.
Opening the account
Once you have chosen which account, with which bank, then its time to
sign up, most of the work can be done online, however many banks do require
that you also fill in and send paperwork back to them. You will of course
have to prove that you are a student and most will ask for your acceptance
letter from the college or university or your student union card.
In order to get your free gift some banks ask that you deposit you student
loan into the account first before they will send the gift and you might
have to sign to say that you will only use the service of one banks student
service.
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