Daily overdraft fees are killing me

BenTheAspiringAdult

Hi all, brand new member here so apologies if this is in the wrong place. I shall start with a (hopefully) brief overview of my situation and hopefully one of you knowledgeable folks will be able to offer some sage advice.

In 2015 my wife and I graduated from university and moved in together. Between us we had £4000 in interest-free student overdrafts and 3 years to gradually pay it off. In that 3 years we have both struggled with physical and mental health issues meaning that we haven't had 2 full-time incomes for any consistent period. In June this year we were both unemployed and decided to move in with the wife's parents and reset our professional and financial lives. We now have until May(ish) 2019 to be standing on our own feet again when her parents will be selling up and moving out of the area.

Between now and then we need to get together a minimum of £7000 (£3000 for rent, security deposit, estate agent fees etc. and £4000 to pay back the overdrafts). The issue we both have is that our lovely bank is charging us daily overdraft fees which are costing us around £40-80 a month. Each! This is a huge amount to be losing on a regular basis and the bank has said it cannot freeze the interest at all and we just need to pay it.

My question is: Is there any way to pay back this overdraft and avoid these incredibly high charges? The repayments on a personal loan would probably be less than the charges, but I know that no provider will let me take a loan out to pay off debts. My mum said that maybe a 0% interest credit card could pay the overdraft off and I just make sure that I pay it all back before the 6 months are up. My issue is that where we've been struggling with money for so long, my credit rating is lower than a reality TV star's IQ, so I may struggle to get the credit we need for the overdrafts.

Any help or advice your guys could offer would be greatly appreciated. We really want to get our lives back on track, but only having 6 or 7 months to get all this money together seems like quite a challenge, made even more difficult by the daily overdraft fees.

Many thanks
Ben

Kitten868

How bad is your credit rating? Lots of defaults or are there ccjs? Much of this depends on your circumstances. Is it likely you will have one of you in regular employment going forward? If yes then do look at loan or credit card eligibility tools as even 18.9% is likely to be cheaper than what your paying now. See what you can get to move the £4000 or as much as you can so you can pay it down. Most loans allow overpayments and credit cards definitely do. Do what you can and then you can start saving.
Another option is nationwides flex direct which is a fee free overdraft for 1 year you could both try and apply for and transfer what you can.

You can do this. You can get out of this hole and pay it off. Xxx

Kitten868

I meant to say the eligibility tools on here.

If you are both still not in employment then contact step change about arranging a repayment plan with your creditors. X

Fireflyaway

I have the same issue ( I'm with with lloyds bank) . I've opened up a new account with a new bank with no overdraft facility to start afresh and then I plan to pay back the old overdraft like a separate debt by standing order. That way I'm in control.
Sometimes separating your income and debts gives you a clearer understanding. Do a written budget so you can see where to make savings and to see the progress you make each month.

BenTheAspiringAdult

Thanks for the replies everyone. No CCJs, just lots of defaults. The wife's isn't too bad I think, but mine is definitely in the very poor range. We're both working now, so should be able to settle everything fairly quickly. I had thought of opening a fresh account with a different bank and just paying the overdraft back as a monthly payment like you are doing Fireflyaway. However, the daily interest fees keep on coming out even when there is no money in there. I am currently £50 over my maximum overdraft due to continuous charges.

Willing2Learn

Ask your bank, in writing, to freeze interest and charges, so that you can reduce the actual debt. It may help to send the a copy of your monthly budget (Income & Expenses) with your letter as evidence of your current financial difficulties.

Edit: I also agree with the previous post, in that it would be good to open up a new current account with a different banking group, to keep your monthly budget income separate from your debts.

Edit 2: It may also be helpful for you to post up your Statement of Affairs (SOA) on this board, so that you can receive more targeted advice and support. If you do decide to post your SOA, then please click on the 'Format for MSE' button at the bottom of the form.
http://www.stoozing.com/calculator/soa.php