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  • FIRST POST
    • JP83
    • By JP83 15th Mar 17, 11:21 PM
    • 2Posts
    • 0Thanks
    JP83
    Advice on clearing loan/overdraft/credit card
    • #1
    • 15th Mar 17, 11:21 PM
    Advice on clearing loan/overdraft/credit card 15th Mar 17 at 11:21 PM
    Hi,

    Im after some advice on how best to clear a 5000 loan (monthly payment of 177), 400 on credit card and 2x bank accounts with 2000 overdrafts.

    Ive been looking at various options but unsure of best way. Ive looked at doing some bank account switches to get the intro offers on some - but apparently you can't switch an account overdrawn? maybe I could set up a new one and leave minimal in it and use that to swap and get the offers?
    but my main issue was getting a better rate on the loan I have, originally over 5years but have been paying for over 2 years. - I looked at maybe a money transfer card, but my details don't show up in the credit checker through this site. Ive joined experian on the free trial and it says I have a fair credit score. I just applied for the virgin money money transfer card and the pre check option said I wouldn't be able to get it.
    On he experian site it says I have a 90% chance of getting a balance transfer card, but am i right in thinking that I can't balance transfer a loan and overdrafts?

    cheers in advance for any help/advice!
Page 1
    • Dobbibill
    • By Dobbibill 16th Mar 17, 5:57 AM
    • 2,135 Posts
    • 3,252 Thanks
    Dobbibill
    • #2
    • 16th Mar 17, 5:57 AM
    • #2
    • 16th Mar 17, 5:57 AM
    You would need a MT for overdrafts - a BT card would only be used to pay off your CC.

    What APR is on your loan?

    How much are the overdrafts costing in charges and/or debit interest?

    If you can get an MT card to reduce the cost and save money but if you do make sure you remove the OD - please don't think you can borrow you way out of debt.

    Moving debt is not 'clearing it' - you will still be in debt but owe to a different source.
    • enthusiasticsaver
    • By enthusiasticsaver 16th Mar 17, 6:59 AM
    • 3,396 Posts
    • 5,687 Thanks
    enthusiasticsaver
    • #3
    • 16th Mar 17, 6:59 AM
    • #3
    • 16th Mar 17, 6:59 AM
    As you say you won't be able to transfer an overdraft. What rate are you paying on loan and overdrafts. Incidentally overdrafts are a very expensive way of borrowing. I would be tackling that 4K of overdrafts urgently. How much are you reducing it by monthly?

    As dobbi says moving debt is not clearing it.
    Debt and mortgage free and saving for early retirement
    • Bedsit Bob
    • By Bedsit Bob 16th Mar 17, 1:25 PM
    • 9,561 Posts
    • 49,968 Thanks
    Bedsit Bob
    • #4
    • 16th Mar 17, 1:25 PM
    • #4
    • 16th Mar 17, 1:25 PM
    Don't be tempted to refinance the loan.

    I fell for the "we can offer you a loan, with lower monthly payments" line.

    The payments were, indeed lower, but the loan was reset back to five years, from the ~ 2.5 years I'd have left to pay.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - 1161
    • Fireflyaway
    • By Fireflyaway 16th Mar 17, 5:13 PM
    • 916 Posts
    • 910 Thanks
    Fireflyaway
    • #5
    • 16th Mar 17, 5:13 PM
    • #5
    • 16th Mar 17, 5:13 PM
    How much income do you have spare? Do a budget and attack the debts with any spare money. My bank allowed me to decrease the overdraft a little each month. I think it might dent your file if you have a repayment plan in place but might be worth it depending on your circumstances.
    Its not mathematically correct but I like Dave Ramsey's snowball method, its a more motivational way to get out of debt.
    • JP83
    • By JP83 24th Mar 17, 2:24 PM
    • 2 Posts
    • 0 Thanks
    JP83
    • #6
    • 24th Mar 17, 2:24 PM
    • #6
    • 24th Mar 17, 2:24 PM
    Thanks for the replies, really appreciate them!

    As you say Im gonna tackle my overdrafts first. Im going to get a part time job and get that paid in to one account to help pay overdraft.

    Ive also set up a new bank account and Im going to use that and then switch it on monday and get an introductory offer and use that to lower the balance as well, every little helps! i read that someone has done the bank account t switch multiple times so hoping I won't have an issue!

    Ive just left this for so long and lived with it so it becomes normal but I really need to sort my finances out!
  • National Debtline
    • #7
    • 24th Mar 17, 3:38 PM
    • #7
    • 24th Mar 17, 3:38 PM
    Hi JP83,


    I would suggest that you post your SOA. Like other posters have said, moving debt isn't clearing it and although it may make it easier to repay (in theory) it can be a slippery slope back into debt if you are not careful.


    I think the new bank account is a good start, but I wouldn't suggest you switch the overdraft over. Leave the debts away from your income and deal with them from a distance. Remember banks can recall overdrafts at any time, so if you have one on your current account, your money isn't safe and you may end up having to move banks again (not impossible, but can be frustrating).


    If you are struggling and cannot afford the minimum payments on everything, then give one of the free debt charities a call to discuss your options without taking out any more credit. Good luck,


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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