Credit ratings... Overdraft vs loans

MetalMan_2

We want to remortgage next year. However last year I was made redundant and unfortunately fell into my overdraft slightly. I am back in employment now, but have about £2500 in my overdraft.

I was considering taking a loan to clear the overdraft as it will take me two years approx at current rate of income vs outgoings to pay it off.

The question is, should i do this if I want to remortgage next year? Would a large overdraft or a small loan (not sub prime) look better on my report in this regard?

Thanks

Thrugelmir

If its going to take 2 years to clear your overdraft. Then the thought that is my mind is. Will affordability be an issue if you apply to remortgage with a new lender?

Switching product with your current lender wouldn't be. As no credit check is performed.

jamesd

Get rid of the overdraft. It's seen as a sign of poor financial management.

Wh05apk

It would make negligible difference, go with whatever is the lower interest, provided you keep within your overdraft limit and do not incur additional charges then there would be no difference.