Overdraft and loan

DLGSLA

Hello I’m new to MSE so I’m not sure if I’m in the right place? After a little advice to cover my debt. Between myself and my partner we owe around £6k debt (such as very, credit cards etc). Natwest is my only bank and only ever has been, I don’t have a credit card with them, but have an overdraft with them which I’m living in the red due to maternity leave (£1.5k). We are struggling at the moment only due to the amount of debt we are paying out monthly! Is it worth asking for a loan to cover all the overdraft and debt so we’re just paying one debt over a period of time? If so what are the likely chances we will be successful? My partner now has quite a high paying job and I will soon be going back to work but will have nursery fees to pay. Thanks in advance!

sourcrates

Hi,

No, you don;t want more debt, you need either money management or debt advice.

An SOA is the place to start, consolidating existing debt just does not work.

http://www.stoozing.com/calculator/soa.php

Dobbibill

Welcome to the forum.

I agree with sourcrates - complete the SOA via the link provided. You can format it for MSE and post it here and the good forum members will see if they can offer suggestions to suit your situation.

Consolidation loans don't work and just get you further into a debt spiral. Please ditch this idea.

enjoyyourshoes

Agree, do not get consolidation loan.

However , do work out what spending has got you into the debt and then work out strategies to mitigate the spending.

Solve that problem and you can then work on reducing the debt , highest apr by highest apr. As you have said the oD is main problem , so calculate how much it is costing you and then live frugally to reduce the dependancy.

Ilona

Simple answer as everyone else says, Complete a Statement of affairs, post it here, and stop spending. Cut right back on everything that is a 'want', only buy what is a 'need', like rent/mortgage, council tax, utilities, food, car to get to work. Everything else you can do without. Be brutal, like chopping back a tree, whittle it down to the bare branches.

Ilona

EssexHebridean

Agreeing with everyone else here (you'd not have seen that coming, would you!)

No to consolidation - it doesn't work, it just moves the problem.
Step 1: SOA as stated above
Step 2: give yourselves a proper working budget and learn to stick to it - this will take a bit of time as you adjust, make changes and find out where you can make savings on your current outgoings.
Step 3: Get that overdraft gone and if further children are planned save for the next lot of maternity leave ahead of time so you don't find yourselves in the same situation again.

It may be that once we see your SOA the advice will be to set up a new bank account away from NatWest - but the priority at the moment is to work out what can be done to get rid of the OD. Personally I truly dislike overdrafts as they are what I call "dangerous" debt - the bank could call you tomorrow and say they are calling it in and there is nothing you can do about that - not the kind of unstable situation that any of us would think ideal. The good thing is though that you've spotted the issue and are looking to tackle it.

seatbeltnoob

6K is manageable debt and with two of you earning should be possible to pay it back.

As others have said do a SOA and work out your surplus/deficit. -£1.5K down on a current account is pretty bad, especially if it's your only card. Do you have other funds you can use if the worse case scenario happens as overdraft gets withdrawn?

Once you have received your pay, I would recommend getting your current account up to a positive balance as quickly as possible.

Make sure all your credit cards are on 0% interest switch them over if you can. If you pay back £250-£300 a month that will allow you to pay off the cards quickly.

If you cant get all of them onto 0% then just pay the minimum on the 0% cards and pay as much as you can on the other card, do minimum payments all all but the highest interest card.

katie4

Can i just add that sometimes consolidation loans do work!
I now have one. i went with my local credit union as i couldnt get credit anywhere else
i borrowed £3700 to pay off my high interest credit card repayments are now a more affordable £150 a month instead of £300 a month the card was costing me and its saving me a fortune in interest


i have found most people on here will tell you not to get a debt consolidation loan but so long as you remove your overdraft or cancel your credit card once they have been paid off with the loan and dont take any more credit then they can work. It's working for me