Advice on overdraft please

stressedoverdebt

I am new here and a self confessed ostrich when it comes to finances...until now that is...needs must so I am looking forward to joining the community of savy money savers!
I've checked Martin's advice on this site once or twice before and it's been great (thank you!) but I am unable to find the answer to this one so I am really hoping someone can help?
I have a current account overdraft upon which I am paying heavily in interest and charges. It stands currently at around -£6000 and although I have just changed my mortgage in order to reduce my outgoings I don't see this clearing for some time - but if I can be very careful and budget I may be able to do it in a year or two. Therefore I would like some advice on the best way to pay this off with the minimum interest charges. I was/am looking to move this to a credit card with a minimum interest rate offer for a year or so...(I gather there are none that offer 0% interest on balance transfers and I am struggling to find one that offers balance transfers on current accounts) Does such a thing exist?

Or, is there an option to change bank accounts and get 0%/low interest on transferred overdrafts on amounts of this level? I read here that one bank is offering this but only on overdrafts of up to £2,500 so that does not cover my needs.In case a little more info is needed, I am employed full time, earn a decent salary but have a huge mortgage! (the equity level is good on my property investment but of course tied in) and also have a loan on a rate of around 6. something % that is being paid monthly on direct debit.There may be options that I haven't considered so I would be extremely grateful of any advice!

LandyAndy

bumpity bump. surely we can't leave a newbie without a reply. how disheartening would that be

Lucy1982_2

I'm not sure I can really help. Could you move your current account and then make repayments into your old overdraft to pay if off that way? Rather than transfer it?

I'm not great when it comes to this sort of thing (I have an overdraft myself and struggle with that!)

Storm

I guess the difficulty with switching part of the O/D is that it's normally a condition that your salary has to be paid in there every month, but especially if you've got a good credit rating it's probably worth going around the banks and seeing if you can get a better apr rate on the overdraft.

You could have a look at the dates your DDs go out too - i.e. if you pay one on the 1st of the month, but it's not due until the 15th, leaving it in account for an extra 2 weeks will slightly reduce the interest charged each month presuming it's calculated on a daily basis.

In terms of clearing it off, then the best thing to do is to set up an arrangement with the bank where they reduce the limit by £X a month so that you can see the figure coming down.

If you pop up a SoA (see SouthernScousers sticky) then we'll be able to see if you can save money on your regular outgoings to help get the O/D reduced quicker.

gizfizz

stressedoverdebt wrote: »

Or, is there an option to change bank accounts and get 0%/low interest on transferred overdrafts on amounts of this level? I read here that one bank is offering this but only on overdrafts of up to £2,500 so that does not cover my needs

sorry, no advice but which bank etc is this? oh has an o/d of £2000 so this would be great for us!!

danielleindebt

sorry no advice here. im the same i have a 6k o/draft which i live in. untill i get my d.m.p sorted.

Spendaholic_Chick

gizfizz wrote: »

sorry, no advice but which bank etc is this? oh has an o/d of £2000 so this would be great for us!!

It's the Alliance and Leicester - it's 0% interest for 12 months. And if you go via Quidco you'll get £50 cashback too! :money:

david_hellier

Hi,

Welcome. You will really need to post your SOA so we can work out an amount to service the OD. These are difficult to service in practice because all other outgoings cloud their progress. However if you work out a budget and control spending, it can easily be done.

gizfizz

Spendaholic_Chick wrote: »

It's the Alliance and Leicester - it's 0% interest for 12 months. And if you go via Quidco you'll get £50 cashback too! :money:

thank you, dont really like a&l, my dad had a business account with them and they changed the terms, started charging him for stuff without telling him. he only opened the account because they charged less than his lloyds business account, but after they did that it worked out dearer so he promptly closed it-he'd only had the account for about 3/4 months!! i shall have to have a looky thank you again!!