Urgent- How to pay off overdraft?

pnq06

Hi guys and girls,

I have just had to phone my bank to see if a cheque has cleared (not relevant) and they have tried to sell me a different bank account on the grounds of it costing us less in overdraft charges each month... I didn't realise but its now costing us £34.99 overdraft interest and £30.00 excess fee :eek: (I thought it was costing us approx £30.00 per month)

It is totally unaffordable but so is the account they are trying to sell us. The only benefit we will get is the first £50.00 of the overdraft interest free but in order to get this on our overdraft of £2700.00 it will cost £6pm.

I have a loan on a very good apr so should I increase it to clear the overdraft or shall I get a credit card?

I'm pretty sure there is a much cheaper way around it!!!

Any help much appreciated :beer:

never_too_late_2

I wouldn't think getting a credit card is generally a cheaper way of doing it unless you have a very good credit score (worth checking first) and you get accepted for a 0% deal with say Virgin as me and my husband did back in March this year.

We both had CC debt anyway so transferred this over (with a 3% fee mind you) and then later on we also transferred his 3 grand of O/D (being charged 3% again for the honour!) to save on the interest and charges. So yes it's worth looking into but I don't know if we HAD to transfer a cc balance before being able to use the rest of the credit limit for his O/D.

Borrowing more by way of loan or cc is potentially a better idea if of course it will save you money in the long term by way of interest. BUT make sure you have a plan in place to pay it off before the CC reverts to a non-0% rate or else you could end up worse off.

Does that make sense?

Either way, someone cleverer will no doubt be along to help and also check out the various tips on this site for best loan and CC deals currently.

Hope I've helped a bit!
ntl
-x-

pnq06

Thanks for that...

Unfortunatley not got good credit history so I doubt we'll be able to apply for a credit card Although we did have a card with egg for £3000.00 and it only cost us £35pm we paid it off with end of year bonuses so may be worth a ring?

Do you think my best option would be to try and increase my loan by £2700.00? I'd rather put an extra £40 pm towards that than £60 on the overdraft as it looks so depressing each time I log on the bank :eek:

Thanks

GettingThingsDone

Hi pnq - I would say 'do the math'. An overdraft is just another type of loan. Bang the numbers into the snowball calculator and see what works out best/cheapest. Careful with extending the loan that you don't end up consolidating yourself back into more debt.

Is there anyway you can move your overdraft to another bank with better terms? All the usual tips apply- ebaying, claiming back unlawful charges etc and have you been through your soa with a finetooth comb?

Good luck - I threw everything I could at my overdrafts to clear them as they were the root of most of my grief.

gtd

Teacher2301

Natwest do a 13 month 0% BT deal at 2% fee - worth doing for £2700 - fee would only be £54. In two months you would be saving money (theorectically of course - by not paying around £35/ month in charges etc). Still try it - you never know - when was your last cc application? If it was less than 12 months ago - I'd wait as these appear as searches on your credit file.

Speaking of which - have you seen garlik.com? they used to do a free credit report - not sure if they still do but worth a look at it and find out what your credit report is like - they give a star rating - 3/5 or more i would presume to be good - I suppose!

Have you thought about changing banks - A&L generally match your overdraft limit with your current bank - well they did for me at £1500 o/d. Plus you can always say I referred you and we both get £50 - cheeky I know but hey!

pnq06

Thanks for the replies-

Is it actually possible to transfer banks if your always in the overdraft and going over that some months

Unfortunately 'GettingThingsDone' we've put up our SOA and found that we've got it very easy already!!! Although of course we're still struggling