Breaking the mega overdraft cycle?

Emmellar

We have a situation where some time ago we were given a £9,500 overdraft facility on my own account by RBS. Since 2009 we are forced to draw down this overdraft bit by bit to top up our other main current account. At the end of each year we have used up our overdraft in full and, just in time, it gets paid off with a bonus I receive with no surplus left over. Then the cycle starts all over again for the next year....:(

The result of this cycle of borrow and repay is that we end up paying around £900 in interest each year to RBS which is madness I know. However I'm at a loss as to how we can break the cycle and am thinking a loan is the way to go to restructure things but I can't get it clear in my head how this would work out or how long I would take it out for.

BTW we do not think we are profligate spenders. We have a one stream net income of £2,800 per month with a £750/mth mortgage and the money seems to run through our fingers as it gets spent on food (Lidl's, Tesco), bills (cheapest energy and phone I can find), council tax, car fuel, and various minor essential purchases each month (4 kids school age)! I also download all bank transactions and analyse them in Excel and yet nothing really stands out. We have no other debts and no credit cards at all.

Any advice on either how to restructure in order to reduce interest payments or your thoughts in general about our spend in relation to our income would be most welcome. Are we unique??

Thanks.

innovate

You'll probably get more sensible/targetted responses if you post your question over on the Debt-Free Wannabee board. Good luck!

Emmellar

Thanks. Posted.