Quick dilemma - can you advise?

Snugglepuss

I need to renew my contents / buildings insurance today. My dilemma is do I go for a direct debit at a horrendous rate of 20% on top of my premium (and yes I've followed the advice on this site and shopped through ALL the comparison sites and got the best deal I can), or do I pay the full amount using my overdraft? Which is the lesser evil? I'm tempted to go for the overdraft option, but that's still going to cost me.

Which would you go for?

Thanks.

pania

whats the interest rate on the overdraft? when is your overdraft next up for review? do you have a good track history with the bank? have you looked at quidco for cashback?

Personally i'd say if teh interest rate on your OD is less than that on the direct debit option then gof ro the OD, however you are then opening yourself up to further debt which effectively you wouldn't have if you were paying the direct debit monthly. answer the above questions to yourself, may help you make a better idea.
I am with virgin for my car insurance and they don't charge interest for paying monthly. would this make it more cost effective for you than the company you are looking at?

immoral_angeluk

If your overdraft is at a lower interest rate than the monthly payments would be then I'd use that.

Snugglepuss

Thank you! Overdraft interest rate is 8.7% so I'll do that. I've got a £1000 limit on that account that I haven't used, but I will do that instead of paying the 20%.

Pania I've spent hours searching through for the best deal - so hopefully have got the right one!

Thanks!