Best way to clear an overdraft

callmeted

Hi all,

I'm a bit of a noob, but wanted to ask some advice. I have a £2,500 overdraft I would like to clear from my current account, as I am being charged about 20% annual interest. I'm thinking the best way to do this would be to take out a loan and pay it back over 18-24 months, as I think I can get a better interest rate from a lender of some sort.

What would be the best way to do this? I filled in an application for a Tesco 0% 18 month credit card, but was also given a credit limit of £1,100 - also, I don't know if I could transfer the credit from a card into my current account. What would be the best way to clear this money?

Also - thinking of getting married, so will need a further £2,500 in the future for wedding stuff... I don't know best way to do this!

Any tips would be highly appreciated.

x

Sharon87

A loan is a no no for a small amount.

MBNA, Virgin do Money transfers on their credit cards. Apply for one of them on their 0% deals and see if you can get the money.

Is the Tesco credit card 0% on spending? If so use that for every day purchases and use your wages to pay off the overdraft.

I am also trying to clear and overdraft and use a separate current account for every day spends, so at the beginning of the month I work out how much I might need and transfer that to the other account. But if you've got a tesco clubard credit card, you can use that and earn clubcard points, so it's almost like a cashback credit card.

Good luck!

closed

best way is to cut your coat according to your cloth

if you have available 0% credit, use that upto the limit for things you need to buy, and that will free up cash to reduce the outstanding od

Ilona

Drastically cut your spending, don't buy anything at all for a few months. Don't go out, stop buying food out, take packups everywhere. Only pay your rent/mortgage, council tax, utilities, transport to get to work, and basic food. Then throw every penny you have left at your overdraft.
Ilona

unimaginative_user_name

Do an inventory of your store cupboards and freezer and try to use up as much as possible while spending only on things like fruit, vegetables and milk. What you save can be thrown at your debt. There are lots of helpful threads on the old style money saving board.

Mockingjay

You could ask the bank to reduce your overdraft by £100 each month, saves you being tempted to keep spending it!