Borrowing

Minx

luckybert wrote: »

The debts/overdrafts are with different banks. You are saying that one of them possibly could increase my overdraft limit?

For example my overdraft limit is £100 and I'm £900 overdrawn in account 1

In account two I have same but I could increase my overdraft limit to 2k and use the money to clear the other?

Potentially. If you don't ask you don't get. It will depend entirely on your circumstances and your bank. I was with Natwest years ago and they were always really good at increasing my overdraft limit when I needed to because there was always money going through my account and I was a good customer. For a while I had it at £2k.

They might not give you enough to cover the other debt but an arranged overdraft is much better than an un-arranged one - saves you the wasted fees every month. Then see if you can have an agreed overdraft on the second account - less likely if there's no money throughput.

The important thing is to speak to them - it is not in the banks interest to plunge you into unpayable debt.

enthusiasticsaver

No, I do not think it is a good idea to take out a £3k loan. You would do better either to get a 0% credit card which will let you do a money transfer to repay the £900 then focus on building up your other account so it is in credit all the time and pay the minimum off the credit card until the 0% deal is up and aim to get it fully paid off by then or do another 0% deal. Taking out consolidation loans almost never works without addressing the root cause of the debt which in your case must be spending more than you earn. In a few years time you would be back in overdraft and also have a £3k loan. If you can afford £130 loan payments you should be using that to reduce your borrowing each month.

luckybert

I did that SOA and had £84 left a month

Angry_Bear wrote: »

It works like this....
You have a £900 overdraft on one account, and regularly dip into your overdraft on the other.
You have £131 available to repay debts each month (otherwise you can't afford a £3000 loan). You could either
a) get a £3000 loan, assuming you are accepted, and pay £131 per month off this to repay in around 2 years.
b) Pay £131 into your £900 overdraft every month to clear it off in 8 months.You will then have £131 more in your other current account than you are sepnding each month. So it should (in theory) be less and less into the overdraft every month.
Overall it depends on what you are paying for your overdraft on the second current account, but method b) would mean you only pay a total of £48 interest on the £900 overdraft before it is clear.

That being said, if you have £131 "available" every month, then the amount you need to dip into your overdraft on the second account should be decreasing every month anyway. If not, then you need to look a bit more carefully at your spending and budget. Try filling in a SOA if you find - as many people do - that what you think you have available doesn't quite match reality.

luckybert

I have recently taken out a 0% CC but the limit is only £2900 and I am at £2600 already. I'm not sure they will increase my limit so soon.

enthusiasticsaver wrote: »

No, I do not think it is a good idea to take out a £3k loan. You would do better either to get a 0% credit card which will let you do a money transfer to repay the £900 then focus on building up your other account so it is in credit all the time and pay the minimum off the credit card until the 0% deal is up and aim to get it fully paid off by then or do another 0% deal. Taking out consolidation loans almost never works without addressing the root cause of the debt which in your case must be spending more than you earn. In a few years time you would be back in overdraft and also have a £3k loan. If you can afford £130 loan payments you should be using that to reduce your borrowing each month.

glentoran99

luckybert wrote: »

I did that SOA and had £84 left a month

so its definitely not a good idea to get a 3k loan as you would end up with the loan and the overdrafts

glentoran99

luckybert wrote: »

I have recently taken out a 0% CC but the limit is only £2900 and I am at £2600 already. I'm not sure they will increase my limit so soon.

So you have 2600 on credit cards
3000 on overdraft


You have only £86 per month left


You are living beyond your means and wont be able to get a £3000 loan


You need to be looking at how you can cut spending and pay off your debt, not take out more, If you are struggling with the minimums it might even be time to look at another solution

luckybert

I have -£900 on account 1 and currently -£700 on account 2 so not £3000

glentoran99 wrote: »

So you have 2600 on credit cards
3000 on overdraft


You have only £86 per month left


You are living beyond your means and wont be able to get a £3000 loan


You need to be looking at how you can cut spending and pay off your debt, not take out more, If you are struggling with the minimums it might even be time to look at another solution

glentoran99

luckybert wrote: »

I have -£900 on account 1 and currently -£700 on account 2 so not £3000

apologies it was based on the fact your OP said you wanted to borrow £3000. so what were you going to do with the extra?

luckybert

I'm hoping to keep my head above water until a better paid opportunity comes along.

glentoran99 wrote: »

apologies it was based on the fact your OP said you wanted to borrow £3000. so what were you going to do with the extra?

glentoran99

luckybert wrote: »

I'm hoping to keep my head above water until a better paid opportunity comes along.

But that suggests that you are living beyond your means and wouldn't be able to afford the repayments on a loan, and you would end up back in the overdrafts with a loan and credit cards on top