Reducing Natwest Overdraft

Mancmum86

Hi!

So I recently got a new job with a good salary so thought it was time i got my finances in order. I have a current account with Natwest which was originaly my student acc and then my graduate acc. This has a £1600 overdraft limit of which I am WELL into have been for a good few years.
I have opened a savings account with another bank in an effort to start lowering my overdraft, does anyone know if i can do this on a montly basis or if i need to pay a lump sum?
I spoke to Natwest online and they werent very helpful, i got the impressiom they were expecting me to pay it all off :cool::cool:

Norscbu

how will a savings account help with your overdraft?

spend less than you earn, your overdraft will reduce automatically

le_loup

Is the savings account rate of interest higher than the overdraft interest? Doubt it. Therefor instead of saving in the other account, pay the money in the account with the overdraft , thus reducing the overdraft and the charges.
The overdraft gets reduced every time you put money into the account - daily - weekly - monthly - whatever.

Mancmum86

Yes it reduces but the limit still stays the same

YorkshireBoy

Mancmum86 wrote: »

Yes it reduces but the limit still stays the same

So the issue is willpower then?


Is the overdraft interest free? If not, is it debit interest, or daily fee based, or both?

PeacefulWaters

Mancmum86 wrote: »

Yes it reduces but the limit still stays the same

Is your debt reducing? If so, that's good. When you get to a positive balance for a full month you're a winner.

I have an overdraft limit that I never use. £10,000. Balance always in credit.

It will help if there's ever an emergency, although that's not happened in 25 years.

Dobbibill

I believe that to reduce the limit on your OD you would need to contact Natwest each time.

What you can do is start treating the OD like a bill. So leave enough in your account for your bills + OD charges + amount you can/want to pay off that month.
The Natwest account will start to take care of itself and the available funds in the OD will increase month on month.

Move your other money to a different current account and do your spending from there.

Ben8282

If you have a good salary chances are you are paid over £1600 per month. Have your salary paid into this account. The overdraft will be gone. You will then start to drop into your overdraft during the course of the month. If you manage to save anything during the month the amount of the overdraft that you have to use during the course of a month will get less and less until eventually you don't have to use it at all.
Transfer the money from the savings account into this account immediately. Keeping it in the savings account when you are paying interest on the overdraft does not make sense.
Another idea, if your circumstances permit, would be to obtain a 0% money transfer card, repay the overdraft with a mix of the money in the savings account and the 0% money transfer, then if you don't want to use the Natwest account you could close it. Use the money that you were transferring to the savings account each month to make the payments to the 0% card.
I would recommend against any lowering of the overdraft limit. Keep the limit just reduce how much of the overdraft you use. If you don't want to actually use the account then close it once the overdraft is repaid.