Getting Myself Sorted!

Orrizonte

This is my first post, so hello to you all!

My issue boils down to two dreaded words...student overdraft.

Poor financial decisions while I was a student led to me me taking out two overdrafts, one with HSBC and the other with Natwest. At the time I had planned to leave university and get a job with a decent wage and get them paid off without little trouble, however life isn't always that simple haha. I found myself unemployed for quite a long time.

I've dug my head into the sand for a while but now I am determined to get my finances in order and my life back on track.

This is my problem in basic terms.

• Overdrafts amounting to £2250.

• Basic wage of £295 (Working part time, still looking for full time employment)

• Bills of £60. (Living with parents, so luckily not much to pay yet!)

• Overdraft interest of £40. (roughly 20 per bank)

• Transport/food etc usually amounts to about £50 per month.

This means I am left with the princely sum of £145 with which to try and pay off the overdrafts and have a life.

I'd like to know what you guys would advise. Would I be able to get in touch with the banks and work out a payment plan? Is it likely I could freeze the interest and use that money to pay off the debt instead?

Any advice/Info you could give me would be very much appreciated!

Thanks!:)

Orrizonte

Sorry to bump, also wanted to ask if it was worth getting a loan to consolidate the two overdrafts into one payment? This is something I've been looking at but I'm unsure if it would be the right decision in the long run.

Tixy

Hi and welcome

I would imagine given your low income you would stuggle to get a loan.

Have either bank tried to formally recall the overdrafts? are you using either of them as your main day to day current account?

Are both now charging interest on the full amount?

ellesbellesxxx

Hello and well done for taking first brave step.

I would be very cautious about con;)lidation, a lot of people on here would advise you against it as it can often land you in more of a pickle. Am sure someone will be along surely with better advice!

First things first, can you up your income? Any overtime coming up?

Secondly, cut back...although I can see it's cutting it fine as it is.

It is definitely worth getting in touch with the banks and seeing if there is anything they can do for you. Again am sure someone will be along with great advice in a mo, just didnt' want to read and run.

Orrizonte

Thanks for the replies so far.

Tixy:
I am using one of the accounts as my main account. I have had letters advising that I start to repay but thats about as serious as the letters have been. I think I am being charged interest for the full amount.

Ellesbells:
Yeah, I wasnt sure about the consolidation. On one hand it seems like a quick way or sorting out the overdrafts and having one set monthly payment but on the other hand I could see how it could potentially end up being worse. Plus as Tixy says, I probably could get one with my crappy wages anyway!

When_the_going_gets_tough

OP I know how hard it is for new graduates in the job market but it may well be worth going for a part time job of any kind to fit round what you are doing ( is it career orientated in any way?) , bar/retail work especially near Christmas - a few weeks of work with your low overheads means you could clear your overdrafts pretty quickly and set yourself up for the next stage of your life. Good luck.

Northerness

You could do a MONEY TRANSFER at 0%.

This site has an article on Money Transfers under the 'Loans' section of the site (dated 3 September 2013). Can't put a link to it for some reason but have a look around the site, and here is an explanation taken from that section:

While normal balance transfers let you shift debt from other credit cards, money transfers allow you to shift cash from the card to your bank account, giving respite from overdrafts or loans onto 0% for up to 26 months or 6.9% for life, saving £1,000s.

What is a money transfer?

A few special credit cards permit you to pay money straight into your bank account for a fee, yet you still get the special cheap transfer interest rates.

Therefore, you now have the cheap debt on the card and the cash in your bank account. These money transfers open up all kinds of opportunities. It's crucially important though that you then set up paying off the 0% debt before the intro period ends.

Orrizonte

When_the_going_gets_tough wrote: »

OP I know how hard it is for new graduates in the job market but it may well be worth going for a part time job of any kind to fit round what you are doing ( is it career orientated in any way?) , bar/retail work especially near Christmas - a few weeks of work with your low overheads means you could clear your overdrafts pretty quickly and set yourself up for the next stage of your life. Good luck.

I've offered myself up for extra shifts at work so hopefully my wages should increase over christmas. I'll definitely keep an eye out for other jobs i can fit around my current one. Ideally I'll find something full time soon which will seriously help my financial situation. I'm lucky to have such small amount of money going out each month, if only I had a much larger amount coming in haha.

Northerness:
That sounds interesting, I'll look into that. Is it something you have done yourself?

Orrizonte

So I've looked into this money transfer thing, it sounds promising. It works out that I'd have to pay £75 a month back over 27 months, which isn't too bad.

Does anyone have any personal experience of using a money transfer? If so was it good or did it end up being more problematic?

Northerness

I haven't done a Money Transfer myself - but getting any kind of unsecured debt onto long-term 0% interest has to be a winner.

Here's the link, which I think gives a great explanation (I've been struggling with my Ipad since installing IOS 7.0.3...and copying/pasting links is all different so couldn't fathom it before!)

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

Orrizonte

I'm not even sure I'd be accepted with the low amount of money I'm bringing in at the moment but its definitely something I will consider doing.

Would love to hear from people who have personal experience with using a money transfer.