Advice on clearing overdraft

AB18 · 20 January 2018 at 11:08PM

Hello, I was hoping I could get some advice from some people who are more clued in than I am.

I have a £3000 overdraft which I effectively live in, my salary doesn't take me out of it and then I'm back to the start. On top of this I pay daily fees, roughly £5 per day which isn't helping me get out of it.

On top of this Im paying back a loan, about £200 per month with 4 months left until it's finished.

I'd really like to get out of the overdraft and start to save; with that in mind can anyone offer any advice?

Friends have suggested a credit transfer card to consolidate the debt, others have suggested another loan and finally others have said finish paying the loan and go from there. I wanted to go and see my bank to see what they said but apparently a credit transfer isnt an option.

Thanks in advance for any advice.

enthusiasticsaver · 20 January 2018 at 11:21PM

A 0% money transfer card is what you would need to repay the overdraft.

Have you looked at your monthly income and outgoings to make sure you are not overspending each month?

Have you tried to cut back on outgoings and reduce the overdraft month by month? If you cannot get a 0% money transfer card then this would be my suggestion. Try and reduce the limit each month so £3000 January, £2800 February and so on and keep your outgoings as low as possible until the overdraft is gone. If it is not gone within 4 months you then have the loan money to help you reduce it. I would not take out another loan.

theoretica · 20 January 2018 at 11:39PM

Is the £5 a day fixed regardless of how big your overdraft is, or will it fall if you get it below a certain level?

Hoogle · 21 January 2018 at 12:43AM

How can banks get away with this, surely this is classified as unfair fees. on average a month is 30 days which basically means the bank is charging you £150 a month for the overdraft. Or is this if you go over your agreed limit, back in my student days I paid about £2 a month for my £1000 overdraft if I ever went into it beyond £50 I think.

Do you have good credit to get a 0% balance transfer card or a loan surely a loan would be cheaper if you get 1 at 20% APR for £3000 that would only be £50 a month saving you £100 a month unless I am totally wrong I know it is almost impossible to get the loans that advertise at 6% apr.

Failing that if you have a struggling credit history then maybe you can phone the bank and freeze charges and enter a repayment plan.

However I do not have much experience with Debt/loans etc Just answering because I am shocked that a bank can get away with charging £5 a day for an overdraft no wonder my bank is always spamming me to upgrade my account with an overdraft if they can make that kind of money on it.

vickthestick · 21 January 2018 at 1:23AM

There are bank accounts which cap the amount of money you pay for running an arranged overdraft and although it is unlikely that you can transfer to another bank to do this, it is usually possible to swap bank accounts within the bank you already use. e.g. move from Sntndr 123 paying £5 month to Sntndr Choice paying £10 month for the account and a maximum of £20 in overdraft fees. Check with your own bank to see what is available.

MeenaM · 21 January 2018 at 11:14AM

I would def recommend a 0% money transfer card, it will let you breath again and use that money from the bank fees to clear it off ,

libster08 · 21 January 2018 at 1:28PM

hi

yes I agree with others, if you can, a money transfer at 0%. then reduce your overdraft to say £100 as a buffer just incase you do go overdrawn, but easy to pay off.

I did it through b@rclayc@rd.

£150 a month is ridiculous, I was paying £30 a month for £1000, which was too much.

hope you get it sorted

sourcrates · 21 January 2018 at 2:00PM

I`m guessing you bank with either Halifax or Lloyd's, both having recently switched to daily fee charging, instead of monthly, people with large OD`s will suffer under this new policy.

If you have good credit history, then the 0% money transfer is a good option, if you don't, then maybe some kind of debt management plan where the interest is frozen, would be more appropriate, depends on your circumstances.

-taff · 21 January 2018 at 7:00PM

WHy are you living in your overdraft? Until you answer that one, with a budget, then you are just getting yourself deeper into debt without looking at the cause.

Advice on clearing overdraft

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