transferring an overdraft to a loan?

allibongo123

Hi all,


Wondering if anyone has any advice. I currently hold a bank account with HSBC which is a graduate account (2 years in). I have an overdraft of 2000, which I am always in. I have learned that unless I have a lotto win, this will never be paid off completely.


I am thinking about asking them to reduce it to 1000, and put the remaining 1000 and convert to a loan. Ive had a loan with them in the past and never have had any problems paying it (must be a mind thing!) I feel this way I would be able to have more control reducing the 1000 overdraft with my monthly wage (although understand the increased interest rates etc with a loan).


Has anyone ever done this? Or does anyone know if this is feasible? I plan on visiting the bank tomorrow, as I am very aware they can withdraw the facility at any time, but wanted to know if anyone has had any experiences of this.


Many thanks

financialdisease

Could you ask about automatic monthly decreasing increments to the overdraft a set amount on your chosen day just like a loan payment without the loan?

[Deleted User]

allibongo123 wrote: »

Has anyone ever done this?

Yes, I have, and it was one of the worst decisions I've ever made.

allibongo123

financialdisease wrote: »

Could you ask about automatic monthly decreasing increments to the overdraft a set amount on your chosen day just like a loan payment without the loan?

My wages don't cover the £2000 so not sure how that would work? Im unsure on these kinds of things, but decided today that enough is enough. I just hope they will offer some advice tomorrow

allibongo123

Bedsit_Bob wrote: »

Yes, I have, and it was one of the worst decisions I've ever made.

Ah, that's not good. At least I know it can happen though. Sorry to hear that

financialdisease

allibongo123 wrote: »

My wages don't cover the £2000 so not sure how that would work? Im unsure on these kinds of things, but decided today that enough is enough. I just hope they will offer some advice tomorrow

That shouldn't make any difference I have seem customers pay back £3k at a £10 a week by simply having the bank resuce the od to 2990 2980 2970 and on and on as long as the £10 is available for the reduction it works quite well

Thrugelmir

Why not switch the entire overdraft into an affordable loan?

YorkshireBoy

financialdisease wrote: »

That shouldn't make any difference I have seem customers pay back £3k at a £10 a week by simply having the bank resuce the od to 2990 2980 2970 and on and on as long as the £10 is available for the reduction it works quite well

Be aware that some banks will run a credit search for an overdraft reduction request (from memory, NatWest, and so presumably also RBS).


The alternative, or course, is to find some willpower from somewhere!

allibongo123

Thrugelmir wrote: »

Why not switch the entire overdraft into an affordable loan?

That may be an option. Would prefer that tbh but just unsure of the interest rates they may sting me with. Suppose that's the nature of lending. Thank you

backinbusiness

Also be aware that if the bank suspects you are struggling financially, they may pull the plug on your overdraft completely.

financialdisease

YorkshireBoy wrote: »

Be aware that some banks will run a credit search for an overdraft reduction request (from memory, NatWest, and so presumably also RBS).


The alternative, or course, is to find some willpower from somewhere!

I never thought of that, I suppose every time the amount is adjusted it could be seen like setting up a new limit?


Maybe the will power to put the proposed loan amount into a saving account monthly by standing order at a different bank with no card to make it difficult to access then pay of a chunk of the od when you feel you are tempted to use it.