Best way to clear overdraft

JD002

Hi all

We have a Natwest overdraft of £3,000. We now bank elsewhere. We are just under the agreed overdraft limit.

Our spare income after expenses is around £500 a month. Would the best way to clear this overdraft just be to pay something to it each month?

I don't like the idea of getting it down to say £2000 and then having one of us taking money back out of it again and getting it back up. How easy is it to reduce the overdraft limit and would Natwest mind?

Thanks

mildredalien

Hi there

Your idea sounds sensible - transfer money into it each month until the balance is at 0. Maybe set up a standing order to transfer a set amount each month? You could clear it nice and quickly if you really do have £500 spare income! I don't have any experience with Natwest specifically, but most banks will allow you to reduce your overdraft limits pretty regularly.

You could always cut up your cards so you can't spend any more from that account!

ms_london

Just call them and ask them to reduce your overdraft by £500 each month, or however you decide you can afford. If you don't have any kind of an emergency fund, I would suggest hanging on to £100 a month for that purpose and then throwing the remaining at your OD. Although if you are being charged for it, probably best to clear it as soon as possible.

JD002

ms_london wrote: »

Just call them and ask them to reduce your overdraft by £500 each month, or however you decide you can afford. If you don't have any kind of an emergency fund, I would suggest hanging on to £100 a month for that purpose and then throwing the remaining at your OD. Although if you are being charged for it, probably best to clear it as soon as possible.

I've read that they might credit search me when I request to reduce the overdraft and it might lead to them withdrawing it all together.

timbstoke

It depends on your bank. First Direct charge £25 a go to change your overdraft limit, up or down. So my limit stays as it is until it's paid off, then I'll just tell them not to renew it.

Daddy-Spendless

i bank with natwest i just re apply for a new overdraft online whenever i want to pay some off and request an amount lower than my current limit, i would hate to have an available ballance building up over time, i much prefer to commit to reducing it permanently by just re applying.

JD002

Daddy-Spendless wrote: »

i bank with natwest i just re apply for a new overdraft online whenever i want to pay some off and request an amount lower than my current limit, i would hate to have an available ballance building up over time, i much prefer to commit to reducing it permanently by just re applying.

How often do you reduce your overdraft?

Amziix

I bank with Natwest and i'm in the same position, either go into you're branch, or ring them and they will lower it, I'm doing mine by £50 a month, just taking it in to the bank and asking them to lower my limit. They will do it there and then and don't charge a penny for it

Daddy-Spendless

JD002 wrote: »

How often do you reduce your overdraft?

ive just decided to tackle it and reduced it by £100 last week, ill do the same this week, then 700 the week after, that will half it.