Personal Finance

Resorting to credit

Getting out of debt

Personal Finance Course

Making a budget may sometimes seem tedious, but the benefits can be big. It helps you achieve specific financial goals, focus on your priorities, reduce stress, prepare for unforeseen events, and avoid the consequences of excessive debt.

An effective and useful tool! provides tools to help you increase or update your knowledge of personal finances and an interactive calculator so you can create a personalized budget to guide you when making financial decisions.


Resorting to credit

Using credit is part of managing your personal finances. Here are some examples of types of credit:

  • Government student loan
  • Credit cards
  • Line of credit
  • Personal loan
  • Computer loan
  • Borrowing from parents/friends
  • Creditor leniency (late rent payments)

Pitfalls to avoid

  • Giving in to tempting products offered by lenders
  • Impulse buying
  • Using credit with very high interest rates
  • Making late credit card payments
  • Having multiple credit cards
  • Failing to monitor credit card limits, which institutions can increase with or without notice

Useful advice

  • Use only one credit card that has a very reasonable limit
  • Check your receipts against your bank account and credit card statements
  • Pay your credit card balance in full each month to avoid paying interest
  • Shop around when it comes to lenders’ interest rates for all types of credit
  • Avoid using credit for living expenses like food

Benefits of Loans and Bursaries compared to a line of credit

Comparative Table

Line of credit

Loans and Bursaries

Interest rates
  • Determined by the institution, sometimes variable
  • Very often, the interest rate increases after graduation
Determined by the government, usually lower than rates offered by financial institutions
Interest during studies Must be paid during school or added to the debt The Ministère pays the interest during Full-time studies
Acquisition Credit check required No credit check
Other features
  • Life insurance may be required during studies
  • Possible over-indebtedness
Amount determined by the Ministère to fulfil students’ everyday needs
Other benefits Total amount must be repaid after the end of studies
  • Possibility of earning scholarships that do not need to be repaid after graduation
  • Possibility of receiving a 15% loan remission
  • Tax credit on the interest paid on the student loan
  • Possibility to apply to the Deferred Payment Plan which allows you to repay your student loan, according to your budget and despite your financial difficulties

Getting out of debt

The debt situation

A problematic debt situation is when you are unable to pay basic expenses such as

  • The minimum amount on your credit cards
  • Your telephones bills
  • Your rent
  • Your tuition fee

Practical advice

When you use credit to cover your living expenses and don’t know how you will pay off your debts, there are ways of resolving the situation. Here are some tips:

Debt-tracking Table

To get a good idea of your financial situation, it may be useful to make a list of all your debts, whether owed to a financial institution or to an individual. To better plan the repayment of your debts, you can use tools such as a debt repayment calculator.

Example of a debt-tracking table

Debt Amount due Interest rate Minimum monthly payment Due date Interest start date Repayment start date

Download the table (Excel)

Sample Student Annual Budget     Budget Consultation