Clearing a £3000 overdraft

gemsyuk03

Hi,

I would like some advice on what the best way to clear my £3000 Lloyds overdraft I have would be, as I live in it every month and would really like it gone. I thought, oh its OK I will just leave money in my account every month to clear it but this isnt really happening.

Can you set something up with Lloyds to pay it back, like a direct debit or standing order?

I recently got my first mortgage back in November with the overdraft, and would ideally like to clear all other debts now. Any advice appreciated :-) The only other debt I have apart from mortgage is a £1200 interest free credit card, which I used to transfer a balance on another credit card with crippling interest rates! Thanks :-)

enjoyyourshoes

Hi

to manage your money more effectively (thereby not using OD/Debt/0% CC etc) I would suggest:-

1. Reconciling your bank account every day with all purchases (inc DD/SO/accruals for annualised and 1/4ly bills & any CC purchases)

2. Ensure you do not spend more than you have (reduce spending on irrelevancies (Fags, mags, coffee lattes, lotto, snacks etc etc) and only spend on NEEDS

3. Calculate your annualised bills, 1/2 & 1/4 ly bills and do a cash flow to work out how much you need to accrue each month (and deduct this from the monthly bank reconciliation and save it).

Start saving for 'wants' by putting money aside (in high interest current account that you don't dip into or a regular saver (allowing 12 months for the savings)

As you become more aware of your spending you can control it rather than it controlling you.

redpete

gemsyuk03 wrote: »

Can you set something up with Lloyds to pay it back, like a direct debit or standing order?

That won't really work, you are asking to pay money out from Account X and have it credited to Account X so that the overdraft reduces - net difference = £0. You can ask Lloyds to reduce the overdraft limit so that you are forced to reduce how much you owe but this will only work if you manage to 1) earn more money and/or 2) spend less money.

Getting a loan (either a bank loan or another credit card balance transfer) is only moving the debt from one place to another. Are you paying down the CC bill each month to reduce the balance?

How about posting an SOA so that people can advise on how to spend less?

If you forego your planned holiday this year you should be able to clear the majority of the overdraft.

MoneyMission2015

What a lot of people on here do with their overdraft is open up a new bank account with no overdraft to use as your main account, so have your salary going in to your new account and have all bills being paid from your new account. Then treat the overdraft like you would a credit card, pay a little off it each month until you've cleared it.


If you are going to do this, you're better off opening a bank account with a different bank.