Overdraft balance transfer?

Claire_Bear

I currently have an overdraft of 2600, which started as an interest free student overdraft (taken out nearly ten years ago!) which now costs me roughly £50 per month to have. There is pretty much no chance of me paying it off, but have just heard about doing a balance transfer to a credit card, but I have no idea how to work out how much per month I would have to pay off to keep up with the minimum payment, they all seem to have different percentages etc. I could basically afford the 50 but nothing more, are there any cards who I could switch to in order to start paying it off for the amount instead of just paying the fees for the rest of time? Any kind of explanation how to work it out would be appreciated

eskbanker

See http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs, which features the Fluid card with 0% interest for 29 months, albeit with a 4% transfer fee. Minimum monthly payment is 1% of balance plus interest or £25, which are about the same to start with, so the other £25 will be making inroads into the debt. There's an eligibility checker on that page too, to give you an idea about how likely you'd be to get one of those....

Edit: of course both £25s will be making inroads into the debt during the interest-free period, i.e. over the 29 months you'd pay off £1450 if you paid £50 every month.

grumbler

MSE guide: money transfers

While 0% lasts, the minimum payment is typically 1%, i.e. £50 will cover it.
However, when it reverts to the normal rate, the minimum payment will depend on your APR and will be higher. So, if you manage to get a card, concentrate on reducing the balance as much a possible while it lasts.

thebritishbloke

If you do get a money transfer, just make sure you close down the overdraft once you've done it, otherwise you'll be tempted to rack it up again.

CLAPTON

Claire_Bear wrote: »

I currently have an overdraft of 2600, which started as an interest free student overdraft (taken out nearly ten years ago!) which now costs me roughly £50 per month to have. There is pretty much no chance of me paying it off, but have just heard about doing a balance transfer to a credit card, but I have no idea how to work out how much per month I would have to pay off to keep up with the minimum payment, they all seem to have different percentages etc. I could basically afford the 50 but nothing more, are there any cards who I could switch to in order to start paying it off for the amount instead of just paying the fees for the rest of time? Any kind of explanation how to work it out would be appreciated

whether you are likely to get a 0% BT card will depend upon your income and what your credit files say about you.


also bear in mind the BT fee (maybe up to 4% i.e. £100) may be payable in the first month.

Claire_Bear

Eligibility checker gave me 20% chance for a 0% transfer, would I be better going for one of the cards to build up my credit score before I risk applying for the balance transfer?

Aquamania

Claire_Bear wrote: »

I currently have an overdraft of 2600, which started as an interest free student overdraft (taken out nearly ten years ago!) which now costs me roughly £50 per month to have. There is pretty much no chance of me paying it off, but have just heard about doing a balance transfer to a credit card, but I have no idea how to work out how much per month I would have to pay off to keep up with the minimum payment, they all seem to have different percentages etc. I could basically afford the 50 but nothing more, are there any cards who I could switch to in order to start paying it off for the amount instead of just paying the fees for the rest of time? Any kind of explanation how to work it out would be appreciated

You'd probably be best off posting your SoA on the Debt Free Wannabe - full explanation of how to do that over there.

I'm sure they give you some really good advice.

CLAPTON

Claire_Bear wrote: »

Eligibility checker gave me 20% chance for a 0% transfer, would I be better going for one of the cards to build up my credit score before I risk applying for the balance transfer?

it depends upon your income and what your credit files say

jamesd

Claire_Bear wrote: »

Eligibility checker gave me 20% chance for a 0% transfer, would I be better going for one of the cards to build up my credit score before I risk applying for the balance transfer?

Better to try and possibly get a shorter 0% time. That's one of the ways that card issuers adjust their offers based on their opinion of credit history.