How do I repay my overdraft?

[Deleted User]

As you can see from my signature, I have a 2K overdraft with Halifax.

I want to repay £50 pcm. I have heard that you cannot reduce the OD amount monthly because you are credit checked each time and you may not even be allowed the original amount (i.e. need to repay in full)

Problem I struggle to keep the O/D below -2000, I use it like my own money and feel good that I'm paying off other debts with any money left from my O/D. Mainly because I'm always O/D and the money available is almost always exactly what I have earned that month or likewise.

I don't know if my post is clear or if anyone can lend any advice. This seems to be my worst debt to deal with as I can manage credit card debts and have dealt with a lot over the last 12 months

Poppy_Jane_Parka

I'm in almost the exact same circumstances so look forward to seeing advice!!

Newyorkdreams

Hi AssJ - I'm in the same boat and because my OD is 9.9% I was using any spare money to pay off other high interest debt rather than my OD. However, a poster on the forum recently was asked to pay back their OD within 2 months by their bank and I was given advice to prioritise this debt first to avoid a disaster if the same happened to me. There is no way that I would be able to repay quickly so I have now prioritised this debt.

I have an instant savings account set up with the same bank that I have a current account with and it's all online - I am transferring money for my overdraft into there each month (I saved £50 in April and £200 this month). There is always the temptation to move it back into the current account I guess but for now I'm determined to repay it as quickly as possible and while it's in the savings account, at least I'm getting a wee bit of interest being paid, albeit it is paltry. If I left it in my current account there is no way I would save it! As soon as I can, I'll move the £1500 back into my current account and reduce the overdraft facility to £100 for emergencies only.

Hope this helps

NYD

[Deleted User]

Like the idea! I think this is also my only option. I don't think I'm going to like saving it all and handing it over to the bank!!! :-(

Newyorkdreams

No....me neither! But I'm looking forward to crossing it off the list and seeing my bank balance in positive figures rather than negative. Oh, and I pay up to £10 in interest each month which I won't miss!

Good luck with the saving-to-pay-your-overdraft!

NYD

Katzen

Check the terms of your OD. If you're allowed to keep it whilst using another bank for current acc then open a basic one elsewhere and pay off as any other debt. If you're not allowed to do that then find a way to be strict with yourself til its cleared. As far as I'm aware tho, if your acc is credited regularly and you don't exceed your limit the bank is unlikely to recall the OD as its easy money for them to make in charges. What always keeps me in check is the idea that once the OD is maxed you're effectively paying them circa £10 pm for the privilege of spending no more than what you earn.

prettyplease

discipline is the only answer!!
I had 4 overdrafts - ive paid 2 off in past few weeks but I did not spend on those accounts at I was paying them off otherwise the debts would have crept up again. So I made payments in to clear debt but nothing out (except planned dd's).
Then the second it was in the black I asked for the overdraft to be removed so I cannot be tempted.
Im going to leave the other 2 for now - 1 is interest free for a year and just been opened and the other account is only for bills and lower interest.
I'm hoping seeing only a plus balance on my spending account will help train my mind to spending only whats mine and not the banks!

newmum1

Hi all, what I did whilst reducing a previous overdraft was each month I would decide how much I wanted to reduce it by. Then I would call the bank and they would reduce it by that amount. I found it the most simplest way to do and I managed to do it quickly once I decided I wanted to be on that debt free journey.HTH

Newyorkdreams

newmum1 wrote: »

Hi all, what I did whilst reducing a previous overdraft was each month I would decide how much I wanted to reduce it by. Then I would call the bank and they would reduce it by that amount. I found it the most simplest way to do and I managed to do it quickly once I decided I wanted to be on that debt free journey.HTH

Hi Newmum - I wish my bank allowed this but they only allow the overdraft facility to be increased or decreased every 6 months so I need to wait until I have the whole amount to pay back

NYD

matttye

One word: willpower!

What's the difference between a current account and an easy access savings account? You can spend the money from both accounts easily. The only difference is that with a savings account the funds are separated from your current account, which is an arbitrary difference in terms of whether you spend the money.

Newyorkdreams

matttye wrote: »

One word: willpower!

What's the difference between a current account and an easy access savings account? You can spend the money from both accounts easily. The only difference is that with a savings account the funds are separated from your current account, which is an arbitrary difference in terms of whether you spend the money.

The main difference in my circumstance is that I don't have a debit card linked to the savings account. In order to spend the funds, I need to phyically go into the account and transfer the money into my current account, thereby creating opportunities to question whether or not I really 'need' that item I am just about to use my money on. It works for me but then again willpower and determination is equally required. When I stopped smoking, I learned that each craving lasts no more than 3 minutes. If you can get through those 3 mins then you'll be ok. You learn to distract yourself or create barriers or opportunities to question the belief system. This acts in exactly the same way as it creates diversionary steps.

NYD