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To Pay off Overdraft or Not?
PennyCrayon_2
Posts: 71 Forumite
Hi,
I have been overdrawn for several months due to the recession and unemployment. I have been getting by using my overdraft to pay rent and food etc.
However, I am desperate to clear the overdraft as it is a massive burden. I am thinking of taking the savings I have to pay it off.
I didn't want to do it previously as I was worried I would not find a job for a while and would need some kind of emergency fund.
I now have a temporary job and and feel like I am just working to cover the charges.
I just want to pay it off in one go and have my credit back to zero again. Sick of being in the red.
I have been overdrawn for several months due to the recession and unemployment. I have been getting by using my overdraft to pay rent and food etc.
However, I am desperate to clear the overdraft as it is a massive burden. I am thinking of taking the savings I have to pay it off.
I didn't want to do it previously as I was worried I would not find a job for a while and would need some kind of emergency fund.
I now have a temporary job and and feel like I am just working to cover the charges.
I just want to pay it off in one go and have my credit back to zero again. Sick of being in the red.
0
Comments
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Well if you pay it off, worst case you need to use part of it again & you could do in a dire emmergency.I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.
Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
"A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
***Fall down seven times,stand up eight*** in ~~Japanese proverb. ***Keep plodding*** Out of debt, out of danger.
One debt remaining. Home improvement loan. 19months left.0 -
If you are paying rate of interest on your overdraft than you are getting on your savings (which I imagine you are) then you should pay it off using the savings. It makes no sense to have something sat earning you barely any interest and then paying out interest on something else.
You said yourself that you feel like you are working just to pay off the charges....0 -
Good luck as mentioned if you need to re use the overdraft you can. Well done on the temporary work :-)I AM A MONEY MAGNET, THEY ARE MAKING MORE MONEY FOR ME AS WE SPEAK:pMIKES MOB, DFW NERD 1071, DFW LHS 132!MIRACLES HAPPEN I'VE SEEN IT WITH MY OWN EYES. LBM 08£77240.69 Current outstanding total £36083.01 Paid so far = £41157.680
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Hi,
I decided to take your advice and pay the overdraft off using my savings.
I transferred a big chunck of it over and felt as though a massive weight had been lifted from my shoulders.
You are right, it is ridiculous to keep paying more interest on the overdraft than my savings actually make!
I will be charged interest soon but hopefully I will not have to use the overdraft again unless in an emergency.
I'd never been in so much debt before the recession but I had no choice but to use to stay afloat.0 -
Good for you
I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.
Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
"A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
***Fall down seven times,stand up eight*** in ~~Japanese proverb. ***Keep plodding*** Out of debt, out of danger.
One debt remaining. Home improvement loan. 19months left.0 -
well doen xxI AM A MONEY MAGNET, THEY ARE MAKING MORE MONEY FOR ME AS WE SPEAK:pMIKES MOB, DFW NERD 1071, DFW LHS 132!MIRACLES HAPPEN I'VE SEEN IT WITH MY OWN EYES. LBM 08£77240.69 Current outstanding total £36083.01 Paid so far = £41157.680
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PAY IT OFF! lol0
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Hi,
I have now paid off my overdraft completely. I no longer have the burden of it on my shoulders. Just hope I don't end up going into again.0 -
I'm sure you've done the right thing, Penny. Worth bearing in mind that banks can withdraw an overdraft facility at any time,so always best, if possible, to use it when you need it (good to know it's there just in case), but not let it become a 'structural' long term debt, which is easy to do. I'm gradually getting my overdraft down, but have credit card debt too and so that's a bit of a balancing act. Anyway, well done you!0
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