Get a student loan during an IVA

Get a student loan during an IVA

You can get a student loan while you are in an IVA. It is not officially credit and so as an eligible student, you will qualify even though you have a poor credit rating.

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Can you apply for a student loan during an IVA?

You are allowed to apply for a student loan if you are in an IVA.

The fact you have an IVA means your credit rating will be poor. However, a student loan is not awarded in the same way as normal types of  credit such as a bank loan or credit card.

You will be able to get the loan simply on the basis of you being an eligible student. This is regardless of, and not dependent on, the state of your credit rating or whether or not you have an IVA.

Under normal circumstances, if you want to take credit during your IVA (such as car finance) you will have to get permission from your IVA company. This permission is not required for a student loan because it is not officially credit.

Struggling to get your head round all of this? We can help. Call us (0800 011 4712) or complete the form at the bottom of this page. The advice is free and confidential.

Is it possible to start full time study during an IVA?

You are allowed to become a full time student during your IVA. The Arrangement is not dependent on you having a job.

The only sticking point is you must be able to maintain the agreed monthly payments. If you stop paying, your Arrangement will fail.

Your student loan will help to replace the income you have lost if you have given up your job. You might also continue to work part time. However, keeping your IVA payments going is likely to be a struggle.

To help manage this, you can talk to your IVA company about reducing the monthly payment you make. However this option is not guaranteed.

If you will not be able to maintain your IVA payments, you might want to consider cancelling your IVA and using a different debt solution. Bankruptcy might be a sensible option if you have no assets.

Do not count on being allowed to reduce your payments. You should discuss this with your IVA company before going ahead with your studies so you know where you stand.

Can you get an IVA if you are already a student?

If you are already a student and are struggling with your debts, you can consider using an IVA. However, a key thing to consider is whether you will be able to afford the required monthly payment.

Generally speaking, to make an IVA work you will need to be able to pay at least £100 into it every month.

The other thing to remember is that the Arrangement is likely to last for 5-6 years. You are likely to finish studying during this time and get a job (or a better paid job).

Assuming your income goes up at this time, so too will your IVA payment.

In light of theses issues, you should take time to think about whether an alternative debt solution might be better. If you are not a property owner, then you might be better off going bankrupt. With this option, you may not be required to make any further monthly payments and your debt would be written off after 12 months.

Remember, Student Loan Company debts are not included in an IVA or any other debt management solution.

Need help to start an IVA? Give us a call (0800 011 4712) or complete the form at the bottom of this page.

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