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Repaying an overdraft

2 replies 112 views
pennyblack79pennyblack79 Forumite
1 posts
MoneySaving Newbie
Hello
just looking for some advice 
I have a £2200 overdraft with Halifax and have been getting charged up to £100 a month in charge some months, I decided to try and take charge of this and address paying my overdraft off. I rang the bank and explained it was a lot
of money and asked what my options were for Repaying the overdraft back over a period of time. I asked if they could remove it from my bank account to a separate debt and I’d pay that off. Anyway to cut a long story short they agreed to freeze the interest and charges and discuss a repayment plan with some one. I had to do income and expenditure and agreed an amount to reduce the overdraft and said I would be paying more when possible. When I’ve checke my credit file I now have a note saying a payment arrangement will be added to my account next month!
i have researched this and it seems it’s very bad. I haven’t made the first payment yet what are my options? I am so angry I didn’t realise it would have such an adverse impact when all I was trying to do was get out of my overdraft being proactive? Can I leave this arrangement to pay and hAve it removed? Would I have been better switching to a new bank account first and leaving my overdraft then contacting them to repay it in instalments? I would sooner go back to being charged and try and reduce it myself given the option and keep my credit file ok. Any advice from anyone would be appreciated. I want to pay it off it isn’t that I can’t afford the charges I just want to get out my overdraft. If I move banks what will happen, will the interest keep accruing 

Replies

  • eskbankereskbanker Forumite
    12.9K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    If you can afford the charges then the best way to get out of your overdraft is to repay some of the capital as well as the charges, and this doesn't involve any discussion or negotiation with your bank, you just do it, possibly with the assistance of https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

    Any arrangement to pay is (rightly) seen as a negative on your credit files because it signifies that you've agreed some sort of concession that involves not repaying on originally agreed terms.  No harm in asking them to revert to previous terms if that's viable though, but doing so may not repair your credit files if that's what you're hoping.

    Moving banks wouldn't have been a good idea as leaving an overdraft in a different place from where you pay your income risks the overdraft facility being withdrawn and full repayment being demanded on their terms rather than yours.
  • Willing2LearnWilling2Learn Forumite
    5.7K posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
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    Hi pennyblack and welcome to the forum  :)

    I recommend you head on over to the Debt-Free Wannabe (DFW) boards for advice, support and guidance.  When you start your new DFW thread, it would be good if you could complete a Statement of Affairs (SOA).  This will allow us to see your monthly income, expenses, debts and assets.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
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