Paying off overdraft with Santander

coldoasis

Hi

I have a longstanding £1400 overdraft with Santander on my current account which is more than cleared every month by my wages but then i go into it to the max during the month.

I would like to pay it off so i can move bank accounts to First Direct.

Rather than take out a loan would i be able to apply for a balance transfer credit card and pay it off that way?

Or are balance transfers just for credit/store card debts?

bengalknights

Only MBNA issued cards would have allowed a transfer to your current account.

You should be able to switch banks though although maybe on your next pay reduce your overdraft limit so you dont dip into it.

Tixy

If you go into the max each month it sounds like you even if you took out a loan or credit card you wouldn't have any money available to repay it.

Have you looked at all your expenditure to see what you could cut out or reduce so that you can try to gradually reduce your overdraft each month? If you could start reducing it by say £50 a month then at least you would know you could afford repayments if you did move it to a card.

Only a few cards allow you to transfer from a credit card into a bank account, these are MBNA issued cards (such as Virgin and others), and the post office. M&S credit card allows you to do the same by buying sterling travellers cheques and paying them into your bank account.

Alternatively can you open a new account anyway and move your main banking to there and then st up a fixed monthly standing order to the old account to start repaying the overdraft (this obviously does carry a risk that santander will remove your overdraft once they see its not you main account.

Have you applied for a first direct account yet? have you been told you cannot have an overdraft with them?

ses6jwg

Short term solution.... take out the longest 0% on purchases credit card you can get your hands on, make sure not to take a larger credit limit than your maximum monthly spend would be to avoid getting into trouble. Do all your day to day spending on the 0% card and your overdraft should gradually reduce back to zero. Keep transferring balance on credit card to 0% when it runs out.

Long term solution... up your income and reduce your outgoings.

CLAPTON

how much interest/fees do you pay each month; because that is the only saving from refinancing the OD and you may have to pay BT fees etc

coldoasis

I only pay £7.50 set fee a month for it.

I could afford to pay it off gradually but want to do it quickly so i can go elsewhere.

Santander are hard work

Almost impossible to get a credit card out of them yet i've just been accepted by the Halifax with a £7000 limit.

Plus i've heard nothing but good stories regarding First Direct.

CLAPTON

if you only pay £7.5 on a 1400 loan then that's about 6.5% APR; unlikely to get a loan at that rate

better to consider ways of reducing your spending and pay the debt off more quickly

YorkshireBoy

An MBNA run super balance transfer card, as suggested earlier, won't help you.

At the moment you're paying £7.50 a month (50p per day capped at £7.50 per month?), but the MBNA run cards have a contractual minimum monthly payment of £25.

So, being as you're currently maxing out the overdraft every month - even after being paid - where will you find the additional £17.50 a month from?

Your best option is, as CLAPTON says, to reduce your spending (or increase your income)...not restructure your debt.

ses6jwg

Not a great saving, but if you fund your account with £1k+ pcm you can bring that cap down from £7.50 to £5 by upgrading to the Preferred Account, retaining your existing card and account number.

That's £30 a year straight off the bat.