In a recent news article, an 18 year old student tells how she regrets taking on high-interest debt, that she now sees she didn’t really need.
On her 18th birthday, her bank gave her a $3,100 loan (more than she initially asked for), plus a credit card and overdraft facility – together, another $1,000 of credit.
Add in another loan from a non-bank lender, she ended up with $8,000 worth of debt. That’s a lot when you’re studying and only working part-time. She’s now trying to make new payment arrangements with the lenders, to make the debt more manageable.
Banks often offer tertiary students packages which include an overdraft and credit card. But taking on debt then struggling to pay it back is a common situation for many Kiwis, regardless of their age.
However, even if lenders will approve a loan or providing credit, it’s so important to be honest with yourself about whether you can actually afford to make the repayments.
It’s way better to plan ahead for what you want and need – our ‘Saving Up for Spending’ Journey can help you with that. Or if you’re in debt already, to pay it off faster use our ‘Get on Top of Short-term Debt’ Journey.
Meantime, here’s the Stuff article: