Best way to pay off a £2k overdraft

TheAllanCadenhead

I am just wondering what is the best way to pay-off a long unwanted £2,000 overdraft.

My disposable income is around £200. My bank are charging me £26 p/m on this in total. I worked out it will take me a year to fully pay this off if I was paying £200 a month.

What is the best way of doing this?

YorkshireBoy

3 ways:

1. Earn more
2. Spend less
3. Restructure the debt, ie lower the costs.

I'd suggest a combination of all 3 would deliver the fastest result.

Assuming this is an authorised overdraft(?), your £26/month figure would indicate it's not just interest but daily usage charges as well? So can you shift some (non-interest bearing) payments back?...ideally to just before payday.

Other things worth investigating are putting your essential spend (groceries/fuel/etc) on a 0% credit card to spend your way out of the overdraft. Additionally, a superbalance transfer card such as those run by MBNA may clear your overdraft entirely (for a 4% fee), and get it on 0% for 20 months or so. Both these options need a plan for repaying the debt before the introductory period ends. This plan should include the aforementioned earn more/spend less suggestions.

Good luck!

Eloise86

My partner has a 2k overdraft and he too has problems with charges.

I would always say do a bit of research on credit cards, do you pay PPI that you don't need? If so cancel it.
Do you pay too much for your mobile/mobile bill? if so, lower it
Do you spend too much on your monthly food shop, most of us do. If so, stop it.
And so on and so on. My partner took my advice.

Stopped PPI payments saving him £15 a month. Lowered his mobile phone tariff, again saving him £10 a month. Also he eats when at his parents and now only buys a little food shop. Again saving a good £60 a month. It all adds up.
The money you save, put a way rather than spending it on something else. (he was very bad for that)

Although this may seem like very 'obvious' advice, in fact, most if not all people, do not follow this sort of thing up, which effectively means you are wasting money. So that 2k overdraft could be a 1k overdraft by just saying 'no' to luxuries for a good few months.

Also a really good idea...sell all your unwated crap on ebay, he did. He made a good £200 on dvds, cds and games. :-)

Again, good luck.

Bad_website

When i was in debt, which was a lot more than yours, i thought to hell with it, i am going to get rid of this debt once and for all.
So i cut back on spending considerably, i bought the cheapest food, made large pans of soup, stews, pasta's, that i knew would feed me for a few days.
I never went out with mates, and stopped spending money, i would look round the shops and see dvd's and the like, and think do i really need it, no i don't, and i got over the urge to buy things that i didn't really need in the first place.

I really had no life but the money i saved soon reduced my debt, i did it for myself, not the banks, i was sick of been depressed, frightened of the post, answering the phone. Am so glad i have got rid of this debt and wont ever do it again, i made repayment plans with my debtors and made small payments to all every month except one which i would pay as much as i could off, once that one was gone i would then move that payment to the next one, that way i kept all my debtors happy with out them pestering me.