Best way of clearing overdraft?

Essexgirl_3

Hi

We have an overdraft on our current account of about £3500. No other debts other than this. We usually run the overdraft up over the year, then pay it off by selling some shares. Unfortunately the shares have taken a big hit this year and its not going to be worth selling them. We are paying about £40 a month in interest (cant remember the rate) and account charges. I am wondering if there is any way of transferring the overdraft either to a loan or credit card to reduce the monthly fees? I am looking at the balance transfer 0% credit cards, but are these just for transferring from other credit cards? Any help would be appreciated. Thank you!

Gemmzie

You can transfer it to a credit card but as it's a current account it has to be something known as a 'super balance transfer' - which means that only a few cards accept those transfers.
The best one is the Egg Money card, don't worry about the rate you're offered on it as you only need to put the money from the overdraft to the Egg Money to move it to the other 0% card.
So overdraft >> Egg Money >> new 0% credit card. Then you can make your monthly payments
Hope that makes sense, if not, just ask!

Essexgirl_3

Thanks Gemmzie, thats fab advice. You're a star! x

russ91

i have been overdrawn for about a year in a current acc. (natwest), by the end of the month im usually about £4000 over, when wages go in its down to about £2000, im getting charged £53pm for this. I applied for Virgin 0% and sent last 3months bank statements cos i havent been in my flat long as proof of wages etc., they turned me down cos they couldnt see me getting rid of this debt, i explained that i would be £53pm better off for starters, but they said they would only accept if i was in credit, which begs the question"why would i contact them if i wasnt in debt? " How can i get out of this hole ?

RAS

Have you reclaimed the charges on this account???

And if you do a full SOa, it may be possible to start cutting this back.

russ91

Hi RAS, i did write to Natwest asking for the charges back about 3months ago , they told me that these cases havent gone to court yet and so they werent going to pay out to anyone.
What is an SOa ?

RAS

See here

http://www.makesenseofcards.com/soacalc.html

You can format it for MSE.

Then we can see what can be done to reduce your debt.

russ91

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 36
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 100
Clothing................................ 40
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 100
Presents (birthday, christmas etc)...... 40
Haircuts................................ 10
Entertainment........................... 70
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1434

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
overdraft......................4000......0.........0
Total unsecured debts..........4000......0.........-

Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including secured debts)...... 1,434
Available for debt repayments........... 566
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 566
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -4,000
Net Assets.............................. -4,000
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

RAS

russ91 wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 50 - this is massive, cut you contract and then go PAYG
TV Licence.............................. 36 - This will reduce after a few months, when?
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 100
Clothing................................ 40 - stop buying stuff, you need to clear the OD
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 100 - what is this?
Presents (birthday, christmas etc)...... 40 - this needs to reduce
Haircuts................................ 10
Entertainment........................... 70 - you need to cut this back
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1434

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
overdraft......................4000......0.........0
Total unsecured debts..........4000......0.........-

Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including secured debts)...... 1,434
Available for debt repayments........... 566
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 566
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -4,000
Net Assets.............................. -4,000
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

The first question has to be - do you actually have £566 at the end of the month, because if so, you can clear this OD in eight months, and less if you economise.

If you do not, then you need to keep a spending diary to find out where the money is going - lunches, lattes, magazines etc.