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  • FIRST POST
    • FinancialThrowaway64
    • By FinancialThrowaway64 13th Apr 18, 9:38 PM
    • 4Posts
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    FinancialThrowaway64
    Overdraft/debt advice greatly needed
    • #1
    • 13th Apr 18, 9:38 PM
    Overdraft/debt advice greatly needed 13th Apr 18 at 9:38 PM
    Hi guys,

    Thanks first of all for reading and hopefully giving me some advice here.

    State of play:

    1450 Santander arranged overdraft 750 Natwest arranged overdraft

    My monthly net income is roughly 1700. Rent is 600.

    Basically, I really need advice on the cheapest way of paying these overdrafts off, whether that is via a credit card (I've been in these overdrafts for a while now though so not sure how viable this option is) or perhaps a personal loan? I'm doing by best to research this myself but the options and information is quite overwhelming. Any advice here is really, appreciated. Thanks everyone.
Page 1
    • zx81
    • By zx81 13th Apr 18, 9:42 PM
    • 19,618 Posts
    • 20,993 Thanks
    zx81
    • #2
    • 13th Apr 18, 9:42 PM
    • #2
    • 13th Apr 18, 9:42 PM
    It depends on your options, which are likely to be limited if you're living in your overdrafts.

    Have you tried an eligibility checker?

    You will probably need to do it the old fashioned way - spend less and pay it off.
    • theoretica
    • By theoretica 13th Apr 18, 9:42 PM
    • 5,439 Posts
    • 6,756 Thanks
    theoretica
    • #3
    • 13th Apr 18, 9:42 PM
    • #3
    • 13th Apr 18, 9:42 PM
    How much can you put towards paying them off each month?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • FinancialThrowaway64
    • By FinancialThrowaway64 13th Apr 18, 9:45 PM
    • 4 Posts
    • 0 Thanks
    FinancialThrowaway64
    • #4
    • 13th Apr 18, 9:45 PM
    • #4
    • 13th Apr 18, 9:45 PM
    I think I can put around 400 per month towards paying them off. I was just hoping there would be perhaps a cheaper way of doing things?
    • FinancialThrowaway64
    • By FinancialThrowaway64 13th Apr 18, 9:46 PM
    • 4 Posts
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    FinancialThrowaway64
    • #5
    • 13th Apr 18, 9:46 PM
    • #5
    • 13th Apr 18, 9:46 PM
    It depends on your options, which are likely to be limited if you're living in your overdrafts.

    Have you tried an eligibility checker?

    You will probably need to do it the old fashioned way - spend less and pay it off.
    Originally posted by zx81
    I've not tried an eligibility checker. Would moneysavingexpert be best for this? In an ideal world what would be the best route to go down with the checker?
  • archived user
    • #6
    • 13th Apr 18, 10:53 PM
    • #6
    • 13th Apr 18, 10:53 PM
    Your debt is relatively small which is a good thing.

    My advice. Don't get into debt to clear debt.

    Have a quiet 4-5 months. Join a gym, cut back on the drink and focus on clearing this. If you can clear 400 a month of it do so. Yes interest isn't a great thing to pay but in 4-5 months youl be debt free which is great.

    Rather than looking for a personal loan to clear the debt. You get the loan clear the debt make the payments and still continue to overspend. You end up getting the overdraft again next thing your in the same position only you have a loan to pay as well.
    • fatrab
    • By fatrab 14th Apr 18, 6:54 AM
    • 1,145 Posts
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    fatrab
    • #7
    • 14th Apr 18, 6:54 AM
    • #7
    • 14th Apr 18, 6:54 AM
    https://www.moneysavingexpert.com/credit-cards/money-transfers

    ^^^ Read this first. If you are eligible for a money transfer card then I'd say that's your best bet. Whatever you're paying in overdraft fees just now is money down the pan. BUT you need to have some serious discipline going forwards. As soon as the overdrafts are paid off you must cancel them and never reinstate them! You must set the direct debit so that the balance is clear at the end of the credit card's 0% term. I reckon you probably already know all this but if you don't think you'll be able to do these things then getting a money transfer card is not the right option. I completely agree as above, taking out new borrowing to pay existing debt can be dangerous, it will only pay off if you have the strength and determination to stick to the plan!

    So what if you can't (or don't) get a money transfer card? You need to have an accurate budget. "Thinking" you have around 400 isn't good enough, because if you leave yourself short you're not helping the situation. Likewise, if you could have paid more than 400 off the overdraft you will clear the debt faster and save yourself money in the long run. Reduce the overdraft that is charging you the most first of all. Reduce the overdraft limit as soon as you get paid so that you are not tempted to re-spend the money.

    Post an SOA and be completely honest about your spending, then we can give you more suggestions. This will also show you how much surplus you have to pay off the overdrafts. But in the first instance I'd be looking at those eligibility checkers to see what's on offer.
    http://www.stoozing.com/calculator/soa.php

    Best of luck
    Last edited by fatrab; 14-04-2018 at 6:58 AM.
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

    • fatbelly
    • By fatbelly 14th Apr 18, 8:02 AM
    • 13,103 Posts
    • 10,162 Thanks
    fatbelly
    • #8
    • 14th Apr 18, 8:02 AM
    • #8
    • 14th Apr 18, 8:02 AM
    Good links above.

    The credit card trick is number 4 on this article

    https://www.moneysavingexpert.com/banking/cut-overdraft-costs
    • FinancialThrowaway64
    • By FinancialThrowaway64 14th Apr 18, 11:33 AM
    • 4 Posts
    • 0 Thanks
    FinancialThrowaway64
    • #9
    • 14th Apr 18, 11:33 AM
    • #9
    • 14th Apr 18, 11:33 AM
    Thanks so much for all the great advice here, certainly calmed me down. Having completed the eligibility calculator it looks like I'm not eligible for the a money transfer card. However, it looks like I can get the Capital One Classic Complete card with 0% for the first four months. I feel this would be useful in terms of respite over the next few months as I clear my overdrafts?
    • fatbelly
    • By fatbelly 14th Apr 18, 12:36 PM
    • 13,103 Posts
    • 10,162 Thanks
    fatbelly
    If you don't already have a credit card then having one, and paying it off in full each month, will help would your credit history.

    But you will have to be disciplined with this one, as it's only a 4-month 0% period, then it shoots up to 34.9%

    Also you will only get a low credit limit of 200 to 1,500.

    You'll need to look at whether anything else is harming your credit history, like whether you are on the electoral roll, and also look at whether you can do any of the other tricks in my last link.

    Fatrab's soa calculator would give us more info if you want to fill it in and paste it here
  • archived user
    Listen pay it off money. Take the hit on the interest. You are talking about respite and a break from overdrafts.

    You earn a decent wage and seem to have relatively outgoings. I think from your posts seeing minus when you take money out may annoy you more than the actual debt.

    Getting a credit card clearing that so your in positive isn't changing anything. It's just redirecting the debt. And what will happen is you will overspend. And you will find yourself with a credit card entering into the 5th month with interest and dipping into am overdraft.

    It's how debt gets bigger. Debts don't get bigger with just interest they get bigger by people finding more credit.

    Honestly can you not sit and live low for 4-5 months and clear the debt without further credit? If not why?

    I'm not trying to be hard I'm just being honest that more borrowing very rarely leads to less debt.
  • archived user
    Pay it of monthly I meant.
    • Dobbibill
    • By Dobbibill 14th Apr 18, 4:50 PM
    • 3,418 Posts
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    Dobbibill
    If you aren't eligible for a MT card then you need to pay down as much as possible to the ODs and as soon as possible.

    Are you disciplined enough to move your bills to the end of your month (just before the next pay day) so that you use the overdraft less throughout the month therefore costing less in charges/interest.

    If you really have 400 you are able to throw at the debt then it isn't going to take too long to clear - it's relatively small at the moment. You don't want to increase that with a Cap 1 card so approach with caution.

    All the best
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  • archived user
    They are clearly not disciplined with money so people stop telling them about credit cards. It seems they are a person who earns 1700 a month and spends 1800 thinking one or two months il lay low and clear it. It hasn't happened. It was exactly like myself as a young 20 something male. Weekends on borrowed money and new shirts for a Saturday night when the one I bought the month before would have sufficed.
    • fatrab
    • By fatrab 14th Apr 18, 7:16 PM
    • 1,145 Posts
    • 4,301 Thanks
    fatrab
    I wouldn't go down the credit card route that you are thinking either, that's a recipe for disaster if you ask me.

    As you're not eligible for a MT card your next best option is to simply pay back the overdrafts. You could have Natwest paid in 2 months, Santander 3 months later. You can do this without risking any more debt.

    Best of luck
    Last edited by fatrab; 14-04-2018 at 7:18 PM.
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

    • GTR King
    • By GTR King 14th Apr 18, 11:58 PM
    • 838 Posts
    • 151 Thanks
    GTR King
    Don't go down the Credit card Route...

    Once Overdraft Cleared on one account reduce that to 0...

    Then get other account into positive balance & have overdraft 100-200 just to cover you
    • enthusiasticsaver
    • By enthusiasticsaver 15th Apr 18, 9:11 AM
    • 7,367 Posts
    • 16,267 Thanks
    enthusiasticsaver
    Don't go down the credit card route. In 4 months time the interest rate on that will hike up. You can't use the credit card to clear the overdraft so presumably you are thinking of spending on the card while you try to clear the overdrafts. All that means is in 4 months time you will still have the overdrafts plus a credit card to deal with.

    First option is money transfer card which you have already said you can't get so your credit must be bad, this is borne up by only being offered a short 0% deal on the capital one.

    Second option is the hard slog of cutting back and reducing the overdraft limits each month. Do a spending diary and live within a budget. Cut all outgoings to essentials only. If the overdrafts are 2200 and you can afford 400 per month they will be clear in 6 months. I suspect you may be over optimistic though as if you have 400 spare each month why are you overdrawn not just on one account but two? Debt busting requires you to be honest with yourself as to where you are spending your money. Do you have savings?
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