Stoozing 0% overdrafts

sultanoflondon

Hi all,

I currently have a total of £5k drawn from 3 different overdrafts at 0% which I have stoozed. As a consequence, my credit score has fallen very low & I don't really expect it to improve. I have no other debt except a credit card that I pay off in full each month.

My overdraft eligibility is expected to continue until Summer 2022 or so, which is when I expect to pay off all overdrafts. I hope to get a mortgage in Autumn 2023 (this is when I expect to have saved enough for a deposit), so when should I repay the overdrafts to boost my credit score to get a competitive rate on a mortgage? I understand that getting a competitive rate is much more valuable than the interest I make using the 0% overdraft, so that's why I am planning for this.

Also, longer term, would stoozing a student overdraft permanently negatively impact my credit file? Or will this clean itself up after I repay the overdraft?

Thank you!

[Deleted User]

A good broker will be looking at the wider situation and there may be no need to repay as long as you have the funds available.

Your credit score isn't a guide to your chance of getting a mortgage so get some up to date advice on lender criteria before doing anything.

Thrugelmir

Clear the overdrafts well in advance of applying for a mortgage.

sultanoflondon

Thrugelmir wrote: »

Clear the overdrafts well in advance of applying for a mortgage.

Thank you. How advance do you recommend?

Ben8282

How much money are you actually making by 'stoozing' these overdrafts?

sultanoflondon

Ben8282 wrote: »

How much money are you actually making by 'stoozing' these overdrafts?

on average, between 6 & 7% I think. The capital has been spread between a couple of regular savers at 5% & some P2P lending & some equities.

Before anyone mentions it, I understand that there is a risk of loss of capital & I am comfortable with that.

fatbelly

I like what you're doing and I doubt the overdrafts are having much real-world impact on your credit-worthiness.

Don't miss any payments on your credit card (set up a d/d for the minimum payment) and make sure you are on the electoral roll.

YorkshireBoy

sultanoflondon wrote: »

on average, between 6 & 7% I think. The capital has been spread between a couple of regular savers at 5% & some P2P lending & some equities.

There won't be any 5% regular savers once your current savers mature, so that will cut your returns over the next 2.5 years or so.

What rate is the cash earning whilst it's waiting to be dripped into the regular savers? Have you factored that into your 6-7% claim?

In money terms, not interest terms, how much might you make in years 1, 2 & 3? Is it worth the risk? My view would be it isn't...and I speak as someone who has previously done what you're doing - with £10K from Santander and £7.5K from Nationwide...although mine was on deposit when rates were better than they are now.

Thrugelmir

sultanoflondon wrote: »

Thank you. How advance do you recommend?

How quickly can realise your P2P holdings. Might be more of a challenge than you think.

sultanoflondon

YorkshireBoy wrote: »

There won't be any 5% regular savers once your current savers mature, so that will cut your returns over the next 2.5 years or so.

What rate is the cash earning whilst it's waiting to be dripped into the regular savers? Have you factored that into your 6-7% claim?

In money terms, not interest terms, how much might you make in years 1, 2 & 3? Is it worth the risk? My view would be it isn't...and I speak as someone who has previously done what you're doing - with £10K from Santander and £7.5K from Nationwide...although mine was on deposit when rates were better than they are now.

Thank you for your advice! I use P2P to dripfeed cash into the regular savers - monthly interest & capital repayments are fed into regular savers.

I've calculated that I make enough (> £500 p.a.) to make it worth my while. Surprised at how you got such large student overdrafts from Santander and Nationwide!

Thrugelmir wrote: »

How quickly can realise your P2P holdings. Might be more of a challenge than you think.

Ah got it, thank you!

YorkshireBoy

sultanoflondon wrote: »

Thank you for your advice! I use P2P to dripfeed cash into the regular savers - monthly interest & capital repayments are fed into regular savers.

I've calculated that I make enough (> £500 p.a.) to make it worth my while. Surprised at how you got such large student overdrafts from Santander and Nationwide!

£500 on £5K is a 10% pa return.

Mine weren't student overdrafts, and Nationwide is still available.