Paying off an overdraft

littlemiss_sal

Hi everyone,
I have an over draft I want to try pay off - I’m a bit stuck in a rut with it as I’m getting charges now 
it’s for £900 and I’d be able to pay it off if it was consolidated to a monthly lump sum. I’d be able to pay about £100 a month..  
I’m really not sure if I’d need a loan to do this or a credit card? I don’t have either at the moment. 

Could anyone help advise me? Or point me in the right direction of who to talk to eg is this something step change would help with? 

Thank you 

WARBURI

You could also look at leaving £100 in the account with the overdraft each month to bring the outstanding debt down. You could then ask the financial institution to reduce the overdraft limit each month. 
This would save you a credit search for a loan or credit card, but you'd have to have the discipline not to touch the money in the current account until the limit is reduced. 

BeerSavesMoney

I had an overdraft I was struggling to pay off in the past and spoke to the bank about it and they did as @WARBURI has suggested.

Each month when my pay went in they reduced the overdraft by £100 until it got to £0 and was paid off. They were actually even kind enough to freeze interest if I stuck to the plan. 

It might be worth asking your bank about it if you haven’t already.

numbersrule

BeerSavesMoney said:

I had an overdraft I was struggling to pay off in the past and spoke to the bank about it and they did as @WARBURI has suggested.

Each month when my pay went in they reduced the overdraft by £100 until it got to £0 and was paid off. They were actually even kind enough to freeze interest if I stuck to the plan. 

It might be worth asking your bank about it if you haven’t already.

I'd be wary of this type of overdraft reduction by 'arrangement to pay where the interest is frozen because you will get an 'arrangement to pay entry on your credit file for 6 years after the arrangement ends.

maxsteam

littlemiss_sal said:

Hi everyone,
I have an over draft I want to try pay off - I’m a bit stuck in a rut with it as I’m getting charges now 
it’s for £900 and I’d be able to pay it off if it was consolidated to a monthly lump sum. I’d be able to pay about £100 a month.

The normal process would be just to reduce the overdraft by £100 each month. The questions that you need to ask yourself are, how much are the charges and are they big enough to warrant arranging another debt? I would expect the charges to decrease as the overdraft decreases.