Best way to clear overdraft?

Ivrytwr3

Hey all,

I currently have a £2k overdraft limit which i am very close too breaching!!

Fortunately, i will be getting approx £800 into my account by the end of the week and pay day is not too far away either.

However, what with regular outgoings and with Xmas coming up, i was looking at clearing approx £1k overdraft by other means.

Is this possible? I do not want to take out a loan, but can you balance transfer an overdraft? Or do i just chip away at the OD?

Ta!

thriftylass

Ivrytwr3 wrote: »

Hey all,

I currently have a £2k overdraft limit which i am very close too breaching!!

Fortunately, i will be getting approx £800 into my account by the end of the week and pay day is not too far away either.

However, what with regular outgoings and with Xmas coming up, i was looking at clearing approx £1k overdraft by other means.

Is this possible? I do not want to take out a loan, but can you balance transfer an overdraft? Or do i just chip away at the OD?

Ta!

It's probably the obvious answer but look at why you're in there and address that first. Do not consolidate or get a loan. Just dig yourself out of it. Could you use half of the 800 to reduce the overdraft (change the OD level with your bank instantly) and keep the rest towards Christmas?

Have you looked at the reason how you got into the OD what is preventing you form getting out of it. Try and SOA and loads of people might be able to advise on where to cut your spending.

Ivrytwr3

the £800 will be paid straight into my account and will go towards the OD debt.

So the best idea is to dig myself out?

NineDeuce

No. It's impossible. Take out a mortgage.

thriftylass

Ivrytwr3 wrote: »

So the best idea is to dig myself out?

Yes, because how else? If you don't dig yourself out you'll still have to pay the loan or whatever else you plan to fill the hole with. Might as well just spend less, earn more or sell sth and pay off the OD. Seems the most sensible way and it will address how you got in such a big OD in the first place.

Good luck

ReadingTim

Ivrytwr3 wrote: »

However, what with regular outgoings and with Xmas coming up, i was looking at clearing approx £1k overdraft by other means.

Is this possible?

No, it is not possible to borrow your way out of debt. To get out of debt, more needs to come in than goes out - you need to spend less than you earn.

Review and reduce the regular outgoings, same with the Christmas spending plans.

EssexHebridean

Ivrytwr3 wrote: »

the £800 will be paid straight into my account and will go towards the OD debt.

So the best idea is to dig myself out?

OK - so you pay the whole £800 against the OD - have you already got the money you need to cover any expenses over Christmas saved? otherwise you need to think ahead a bit - this is the perfect time to think about christmas spending if you don;t already have a plan in place to cover it - most people still have three pay packets to come ahead of the day, so that's plenty of time to establish what you need to set aside to cover what you plan to spend.

An overdraft can occur for a lot of reasons, but from the way you've described yours it sounds dangerously like it's just crept up and crept up over time - would this be an accurate assessment? If so then that happens for one reason only - you're spending out more than you're getting in. The way to tackle this is a budget, for a start - get out a year's worth of bank statements (and card statements too if you use a CC) and list everything you pay out - don;t forget the things you pay for less often - insurance policies maybe - and work out groceries as an average - add up the total you've spent over the year and then divide by 12 to give you your monthly figure. Cash withdrawals from the account that you can't ascertain precisely what they were for get their own category - call it "frittering" if you like. once everything is listed and subtracted from your monthly income, either you have a negative figure in which case - time to start working where you make savings - or a positive one - in which case time to get a spending diary on the go so you can work out where that money is going - as clearly it's not remaining in your bank account, is it!

By far the best way to clear an overdraft is, as others have said, to address the spending habits that have created it.

CHlHlRO

I've been here, and with a much bigger overdraft than you, I'm ashamed to say. You do just have to dig yourself out. Keep a complete log of ALL your spending and look at where you can cut back or make savings. When I did it I was living on my own so I just did price comparison on my utilities and insurance, then cut back anywhere else that I could. Yes, it meant giving up a few things, but it was worth it and it didn't take nearly as long to get out of the hole as I thought it would, and nor was it that long before the bank was trying to give me another bloody overdraft! �� I politely declined, obviously

determined_new_ms

my od was the last of my debts to go - but my bank wouldn't allow me to reduce it gradually each month. so each month I went into £100 less of the od amount. I did this steadily and then kept the od until I had saved the same amount as the od level. Then I closed all od's - I had 3 accounts at that time. It was scary for a few moments, but never been in it again

CHlHlRO

determined_new_ms wrote: »

my od was the last of my debts to go - but my bank wouldn't allow me to reduce it gradually each month. so each month I went into £100 less of the od amount. I did this steadily and then kept the od until I had saved the same amount as the od level. Then I closed all od's - I had 3 accounts at that time. It was scary for a few moments, but never been in it again

Yes, that's what I did—not an actual reduction in the OD limit itself, just going less into it every month. IIRC (it was a few years ago now) the bank wouldn't actually let me reduce the limit, which is why I changed banks once my dent into it had gone low enough to allow me to do so.