Considering my options..?
Options
Hello all,
I'm fairly new (go easy!) so apologies if I've missed a thread although I've had a quick browse and thought id ask for some advice specific to my situation.
I'm 24 and I've had a student overdraft since studying, which I completely paid off when they started charging interest around 3 months ago using all of my savings.
Long story short, family bereavement and change in work situation means I am now working part time earning around 500 a month and I had to reactivate my overdraft and I'm sat at - £2000.
I've spoken to Lloyd's and they've agreed a £60 a month payment to clear the overdraft and have asked me to call them in 3 months updating them on my circumstances. Obviously this will take ages to pay off and whilst I appreciate their help, I still look in my bank and see all the negative money and struggle to see a way to save whilst knowing I have all that debt sat there.
I am looking for extra work and I also freelance so I gain some income from that, but I also have my MOT and car insurance renewal coming up at the end of the month, alongside just generally not having much money for anything at the moment.
I am considering the idea of a £2500/£3000 loan to write off the overdraft and sort my car and insurance whilst also allowing myself to balance my finances in my own way in the future. As long as I meet the monthly loan payments I figure the rest of money will be mine to play with, rather than knowing I still owe much more on the overdraft.
Another factor is that I will be receiving some money from the selling off of family Estate within the next few months which will inevitably be able to pay off the loan, or overdraft should I choose to keep it.
My main question is, what seems like the best option? I'm certain that the overdraft will continue to frustrate me just having it sat there, whether it's a mental thing or not I'm not sure, whereas the loan will still in theory allow me to sit in the black with the bank and feel like I'm saving some money.
Thanks in advance for the answers, and I hope that wasn't too complicated!
I'm fairly new (go easy!) so apologies if I've missed a thread although I've had a quick browse and thought id ask for some advice specific to my situation.
I'm 24 and I've had a student overdraft since studying, which I completely paid off when they started charging interest around 3 months ago using all of my savings.
Long story short, family bereavement and change in work situation means I am now working part time earning around 500 a month and I had to reactivate my overdraft and I'm sat at - £2000.
I've spoken to Lloyd's and they've agreed a £60 a month payment to clear the overdraft and have asked me to call them in 3 months updating them on my circumstances. Obviously this will take ages to pay off and whilst I appreciate their help, I still look in my bank and see all the negative money and struggle to see a way to save whilst knowing I have all that debt sat there.
I am looking for extra work and I also freelance so I gain some income from that, but I also have my MOT and car insurance renewal coming up at the end of the month, alongside just generally not having much money for anything at the moment.
I am considering the idea of a £2500/£3000 loan to write off the overdraft and sort my car and insurance whilst also allowing myself to balance my finances in my own way in the future. As long as I meet the monthly loan payments I figure the rest of money will be mine to play with, rather than knowing I still owe much more on the overdraft.
Another factor is that I will be receiving some money from the selling off of family Estate within the next few months which will inevitably be able to pay off the loan, or overdraft should I choose to keep it.
My main question is, what seems like the best option? I'm certain that the overdraft will continue to frustrate me just having it sat there, whether it's a mental thing or not I'm not sure, whereas the loan will still in theory allow me to sit in the black with the bank and feel like I'm saving some money.
Thanks in advance for the answers, and I hope that wasn't too complicated!
0
Comments
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It's pretty unlikely you'll get a loan, while on an arrangement to clear your overdraft.
Best option is to cut your costs and clear it quicker, paying cash for your insurance.
Visit the DFW boards for advice and support.0 -
Been accepted on the 'check your likelihood of acceptance' calculator on one of the websites however0
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Best option is to either increase your income or reduce your spending, a loan doesn't solve the issue, its just moves it.
How far along is the sale of family Estate ?0 -
Well I will be recieving a considerable sum once the house is sold, but it is being put on the market next week0
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Been accepted on the 'check your likelihood of acceptance' calculator on one of the websites however
Have you actually applied and been accepted for a loan, if so is the rate offered better than the overdraft?Well I will be recieving a considerable sum once the house is sold, but it is being put on the market next week
It can take months for the sale of a property to complete then the executor needs to distribute the funds so don't get your hopes up about seeing that money in 2018.0 -
You have to remember that lenders see your debt as added together, not one minus the other as there is no guarantee the loan won't hit the account and then your MOT, insurance yadda yadda comes up and the loan goes on that and you have 2x the debt. As per above if you are struggling to pay back the OD don't bother trying to save, you will be paying more in interest than you get in savings interest and get the OD down. The estate sale can then form part of a longer savings plan.0
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