Cheaper rate v. credit rating black mark

Credit_Card_Kate

Can anyone offer some advice? I have a personal overdraft of £4000 (amongst other debts) and keep going over my overdraft limit. I would like to take out a personal loan to clear the overdraft and start living within my means.

I have an account with the Co-Op bank, as well as Lloyds TSB. Lloyds can only offer around 15% due to my poor credit rating (because I keep going over my limit). I think I may be able to get a rate of 7.5% with the Co-Op (not guaranteed until I actually complete the application).

Should I go for the 7.5% or should I shop around to try and find a cheaper rate? I was recently turned down for a 0% credit card and I'm worried if I do too many applications that I risk being turned down again and further harming my credit score. The Co-Op say I'm pre-approved for £2,500 although that wouldn't be sufficient to clear my £4000 o/d. However, as I'm an existing customer of their and my accounts with them (2) are both in credit (albeit with very small balances) I thought I might get a more favourable response from them than somewhere where I'm a completely unknown quantity. Also, they're offering a 3 month payment holiday. (hurrah, I'm packing my bucket and spade as I type)

What do you think?

Joe_Bloggs

What rate is on your overdraft ? You will get the most advice from this site if you own up to what you owe and are paying. Others maybe able to come up with a better strategy. As you know the forum for this is the Debt-free wannabee.
Are charges causing the overdraft to exceed the limit ? You can consider claiming these back on the Budgeting and Current Accounts page.
Even if you get 0% cards you still usually have to pay back 2-2.5% of the balance back per month. That's an extra £50 to £62.50 a month from somewhere. To transfer it to a current account would require a transfer to a card capable of direct transfers to current accounts (Super Balance Transfer).
I doubt the Co-Op would let you balance transfer directly into you current account.
J_B.

Credit_Card_Kate

Thank you for your quick reply. I have no idea (I'm ashamed to say) what rate I'm paying for my overdraft and I'm just about to rush out so I can't check at the moment. But, it is probably fair to say that the bank charges are contributing to me going over my limit and I will certainly look at claiming them back. Over the last few weeks I have really begun to examine everything in detail - including doing Martin's budget - and it is scarey. I am trying to work through things on the basis that "if you're going through hell, keep going" but some days, like today, is really hard. I will post all info on the Debt-free Wanabees forum at some point, but I'm not sure I'm ready to do that yet.

Incidentally, the 0% credit card application was to pay off another credit card rather than to clear the overdraft.