Advice on clearing my overdraft...

tubsolard

Hi, I'm hoping you good souls might have some useful advice for me!

I am currently living in my Halifax £1,000 overdraft, which I really want to get out of. I have opened an Alliance & Leicester current account with no overdraft and from 27th my wages will be paid into this account too.

The problem now is that for every £50 I pay on my overdraft, about £30 gets deducted in fees (£1 per day the account is overdrawn - which is practically every day as bills come out soon after I get paid and will be literally every day henceforth). So if I pay £50 a month into my overdraft, it will take me 35 months before I can bring the account up to the £300 overdraft limit where fees are not applied even though I am not even sure if this will be valid as I will not be paying £1,000 into the account on a monthly basis. At which point though, I will have paid £1,050 in fees!

I phoned Halifax to ask for their opinion and help and their only advice was to put the money on my credit card (also Halifax) which I can't do as I'm at my limit, or take a loan out to clear the overdraft which I also can't do as I am currently borrowing over the bank of england limit for unsecured lending.

Basically, I can't take any more credit to pay it off, but Halifax have no interest in helping me out with this. I'm not sure why I expect them to help, I realise this is perhaps a bit naive, maybe it's because they are making good money out of me on my overdraft and on my credit card!

I am not struggling financially, but I can't afford to pay much more than £50 a month to pay it off.

I hope someone is able to provide some usefull help!

Thanks,

Scott

Tixy

Its a tough situation.

You have done the right thing in moving your current account away from this account though.
And in ignoring their nonsense about putting it on your credit card. They should not be encouraging you into more debt.

But you are in an inbetween situation like many, the situation isn't so bad that you need to default and ask them to freeze interest & charges, but still you can't clear the debt quickly.

Have you looked through all the expenditure items on your budget to see if there is anywhere you can save money by switching suppliers etc or where you can make cutbacks?
Do you have anything you could sell to help boost your repayment?
Could you increase your income/ do overtime or anything?

If you have any other debts where you are paying more than the minimums have you worked out the relative APRs to see which you should target first? and whether you would be better paying more to the o/d instead of elsewhere.

IWantToBeFree_2

What exactly is the Bank of Engalnd limit for unsecured lending?!

Have you thought about posting your statement of affairs so people could give you ideas as to how you could cut your outgoings so you can pay your overdraft quicker.

Also, with Halifax if you are getting £300 interest free overdraft and have to pay £1,000 a month in, that must mean that you are using the ultimate reward current account that costs £12 a month to run, is that correct?

tubsolard

I have been advised by various sources that the BOE limit on unsecured lending is 3 x monthly income.

I think I might have got the £300 interest free Overdraft wrong and I infact pay a £1 per fine on any of the overdraft from -£1 to -£1,000.

I may be able to afford to pay a little more off of my overdraft as my circumstances will change over the next couple of months so that I might be as much as £150 a month better off and certain other financial commitments end.

So if my only option is to clear as soon as possible as to pay less fees then I might have to take this route.

I am just gutted that £30 of my income everymonth goes on paying off my overdraft until it's paid off, it's a real kick in the teeth that I have no choice but to keep paying.

My other worry is that as I won't be paying any more money into my account, they will decide to ask for me to pay the overdraft off.

As you can see my intentions are clear, I just want to pay it off. I just wondered if the only way to pay it off quicker was simply to pay more or are there other avenues I could consider.

Thanks for your help.

Scott