Is a loan the best way to do this?

Dopez2

Hi, I've got £2500 overdraft which is maxed out... and a £1500 credit card which is also maxed out. Both with HSBC.

I'm finally on a good salary earning £28600 a year before tax. so roughly around 1600 a month but my outgoings including £800 for rent and bills. Probably have about £250 a month to put towards paying off the debt but the interest is killing me!! Feel like im not making a dent in paying them off!

Is it best to take out a lower interest loan for £4000 to pay off the two debts?? If so what's the best bank to do that with?

Or should i do a balance transfer on another credit with 0% interest?

Confused!!!:(
Thanks in advance for your help.

gb12345

Dopez2 wrote: »

Hi, I've got £2500 overdraft which is maxed out... and a £1500 credit card which is also maxed out. Both with HSBC.

I'm finally on a good salary earning £28600 a year before tax. so roughly around 1600 a month but my outgoings including £800 for rent and bills. Probably have about £250 a month to put towards paying off the debt but the interest is killing me!! Feel like im not making a dent in paying them off!

Is it best to take out a lower interest loan for £4000 to pay off the two debts?? If so what's the best bank to do that with?

Or should i do a balance transfer on another credit with 0% interest?

Confused!!!:(
Thanks in advance for your help.

First thing to consider is, if you went the CC route, whether you would get a 0% card (and if so what balance would be offered). Similarly, for loans would you get a rate that is better than what you currently have on the card and overdraft.

Without knowing the APRs of the debts, it's impossible to say what would be best.

The main thing to do though is think about why you are 4k in debt and to make sure that if you clear the existing debts, they don't build up again - otherwise you'll be back in 6 months or so with an 8k debt problem.

Dopez2

Thanks for your reply..

The interest on the debit card overdraft is: 19.90%

The interest on my credit card is: 17.9%.

Does that help at all?? They both seem very high to me.. just want to repay it without an interest rate.

opinions4u

It's good that you're taking some time to think about this.

But part of the solution is to stop spending more than you're earning.

What are you doing about this?

You could probably hibernate for six months and get debt free.

gb12345

Dopez2 wrote: »

Thanks for your reply..

The interest on the debit card overdraft is: 19.90%

The interest on my credit card is: 17.9%.

Does that help at all?? They both seem very high to me.. just want to repay it without an interest rate.

They are not obscenely high. It would all depend on whether you were able to get a loan for a lower APR.

Your best bet would be to try Nationwide's soft search as that will give you an indication of the APR you are likely to get, without leaving a search on your credit history

CLAPTON

If you have 250 to throw at the debts, why are both OD and CC maxed out?

Dopez2

I built up the debt because i was a freelancer with irregular income.. i am now in a permanent job so looking for the quickest and cheapest way to clear the debt either buy a lower interest rate loan or a balance transfer....

With my outgoings i would have 250 a month to put towards paying it off but dont want to waste some of that 250 on interest if it's unnecessary

maghater

simplest solution, would be to talk to your bank, should sort a loan out no probs given the information you have provided, should be much lower rates than you are paying on cc and od.

CLAPTON

Dopez2 wrote: »

I built up the debt because i was a freelancer with irregular income.. i am now in a permanent job so looking for the quickest and cheapest way to clear the debt either buy a lower interest rate loan or a balance transfer....

With my outgoings i would have 250 a month to put towards paying it off but dont want to waste some of that 250 on interest if it's unnecessary

you are paying about £60 per month in interest

certainly worth reducing but I doubt it's killing you

Thrugelmir

maghater wrote: »

simplest solution, would be to talk to your bank, should sort a loan out no probs given the information you have provided, should be much lower rates than you are paying on cc and od.

Second this. The bank would consider converting the OD into a loan.

gazter

Dopez2 wrote: »

Hi, I've got £2500 overdraft which is maxed out... and a £1500 credit card which is also maxed out. Both with HSBC.

I'm finally on a good salary earning £28600 a year before tax. so roughly around 1600 a month but my outgoings including £800 for rent and bills. Probably have about £250 a month to put towards paying off the debt but the interest is killing me!! Feel like im not making a dent in paying them off!

Is it best to take out a lower interest loan for £4000 to pay off the two debts?? If so what's the best bank to do that with?

Or should i do a balance transfer on another credit with 0% interest?

Confused!!!:(
Thanks in advance for your help.

You should be able to scrape more than £250 a month from your salary. Batten down the hatches for a few months and it will be gone.