Advice on overdraft-to reduce gradually

littlechezza

My bank wants to discuss reducing the overdrafts I have, I have made an appt but they have asked me to come up with an idea of what would be an amount I want to reduce by each month - what would be best, I did ask for their advice but they asked me what I thought, hope you can help.

chanz4

£50 a month, not too much but enough

littlechezza

Would that be £50 on both, I had thought this and then would mention when the smaller one was reduced I would move the £50 to the other, also with the interest being quite high and a charge each month of £5 does anyone have any experience of these being reduced, to be honest thought the person was quite rude, but that's by the by I know it has to be done.

littlechezza

Please could anyone give advice regarding the interest.
Thanks

CLAPTON

we need some more information

what are the sizes of your overdrafts?
what are the charges (if any) for the overdrafts
what is the APR of the interest (if charged)

which bank is it
what account(s) is/are they

why have they asked you to reduce them?
have you been over the agreed limits?

littlechezza

They are both Lloyds, one is £3000 and one is £900 always up to limit but never over, not sure of apr to be hones, but there is a £5 charge on both, think the interest on the £3000 one may be £20 and the other £15, not sure why they have asked me to see them, they phoned and I asked if there was a problem, the person asked if I thought there was a problem, I asked if I could go over the details over the phone and they have said no, don't have a problem reducing as I know it isn't my money but would like to be prepared.
Thanks

izools

Bottom line is -

How much can you afford?

Do an income and expenditure sheet, work out what you're esential costs are, where you can cut back on frivolous expenses, and cut the limits back by as much as you can realistically afford each month.

You might find after doing a budget and scouring over your bank statements that you can afford to drop them by £100 a month each, you might find you can't really afford more than £20 a month each, but we can't make that judgement for you

littlechezza

Thank you, I think £40-£50 is realistic for both, wouldn't be able to make the £100 on each but this may change over the year, obviously it's just having to negotiate the interest and charges, will take a lot longer is they won't budge on that, I fully understand that they don't have to but hope they will.

izools

There's absolutely no room to move on the interest charges. I wouldn't waste your time - you absolutely won't get anywhere.

The only way to reduce the interest charged is get the balances down as fast as possible.

Have you actually sat down with printed statements and excel to see what you can cut back on to help you get this paid off quicker? There's always something you can change about your expenditure to help - often many things. You might surprise yourself

littlechezza

Things change from month to month, the idea was the £50 was a start and any extra would go into each month, wouldn't want to give them a figure of £100 and then not able to meet that, thanks for your help.

izools

Ahh I see that figures - so LTSB will reduce the limit monthly for you? Not a matter of you calling them each month and saying "I'd like to reduce my OD limit by £XX please"?

Best of luck on this, and well done for tackling the problem