'Savings to pay off debt'... MoneySavers wisdom please!!

Ashdown

Hi MoneySavers,

I wonder if you can give me some reassurance/advice/support about my financial position regarding debt/savings etc...

Debt-wise, I am running close to my £1,500 overdraft limit on my HSBC Plus current account, and am about half way through paying off my £2,000 2-year loan. So I'm about £2,500 down I guess.

I have about £4,000 saved. Should I pay off my overdraft and 'start afresh'? I can live within my monthly salary which is typically £1,600 after tax and stay in credit, maybe even become disciplined and save.:A

So, bail myself out with my savings or live in my overdraft for the forseeable? It sounds sensible, but the idea of having no savings frightens me. Am I in a disastrous financial position or a good one? I am 25.

Thanks in advance, you are the wise ones!

Ash
:beer:

immoral_angeluk

What you have to think about is in which scenario you would be better off... is the income from the interest on your savings more than the interest you are paying out on your debt? If not then I'd pay off the debt with your savings.

WASHER

I doubt very much you are servicing your debts at 0% interest. So I would pay off the debts with your savings. May I ask why you got a loan when you have savings in the bank? It doesn't make financial sense to me, unless you have recently come into the savings.

tiff

I would definitely pay off the o/d, you will still have savings left and a clean slate. Just dont be tempted to use the o/d again.