Struggling to clear overdraft

[peanutsmuggler]

Hi,

Due to my husband being made redundant back in 2008 and being out of work for a few months we managed to reach the limit of our £2,600 overdraft.

He is back in work now and I also work full time myself but our income has dipped so we are struggling to clear the overdraft, it is down to about £2,000 now but I'm getting sick of the interest charges and now Lloyds are also charging £5 a month overdraft usage fees.

Is there a better/quicker way of clearing it?

Thanks

Switch to another bank who will give you it interest free for a year to give you a chance to pay it off without interest. Or you could use your cash to pay it off and put your b=new purchases on a 0% credit card. Only do this though if you trust yourself not to run up more debt.

First - go and talk to the bank and tell them you want to get ride of the overdraft but don't want a loan. Ask their advice.

second as above poster has said - get cc to pay of loan - but don't under any circumstances put new purchase on the cc as this will not be included in the interest free - get the overdraft transfered to the 0% cc and start paying it off pronto - over 10 months that is obviously 260 per month - will you be able ot find the money to do this? if not then don't

third you could change your elect, gas, phone, etc bills and save money. Life insurance mortgage to save money to find the 260 per month to pay it off over ten months

Can you have a look at another part time job - say evenings at a pub twice a week - you would earn around £100 per month take home which could go towards the bill?

certainly look at your outgoings and see where you can save - you maybe able to save £50 on utilities and earn £100 which would then at least go a long way to paying off the money

Why are they charging you £5 per month for the overdraft? I don't pay anything for my overdraft facility.
If your income has dipped, have you checked with tax credits etc to see if you're eligible for more?

I personally wouldn't advise getting another cc or loan etc as it's too tempting to use for something else and then you're faced with a larger bill. Go in and talk with the bank, see if there's a better interest rate they are able to charge you.

As ivykaty said, see if there are savings to be made elsewhere within your budget to allow more money to remain in the account, therefore eventually clearing the overdraft.

Thanks for your quick replies!

At the moment there is very little spare cash and we have the cheapest deals we can find on utilities etc. We have two loans at the moment that will be paid off in November this year so will have about £250 extra per month then, no chance of working any extra hours, I work full time days and OH works full time evenings/nights neither of us has a huge wage so childcare would eat up one of our wages if we didn't do it this way.

I'm a bit anxious about taking on a credit card or loan because our mortgage has just come to the end of a fixed rate, it is actually going to be cheaper on the variable rate (about £150 cheaper per month) but I am worried that the rates are going to shoot up again. The fixed rates they offered us were over 7% for 2 years so pretty pointless.

0% credit card, pay it off monthly. It's working for us.

Also, what banks offer a 0% overdraft?

OK well in your situation I wouldn't go for another product, if your mortgage is £150 a month cheaper atm, I'd be leaving that in the account to go towards the overdraft. In 9 months time (when your loans are due to end) you'll have paid off £1350! Then with the extra cash from not paying for the loan it'll be clear in no time. Then you've got flexibility in case the mortgage rates rise again, although personally I think this might be quite a while.
7% is rubbish, considering what the BoE rates are right now. The banks are profiting hugely from lending!

Thanks jaffacake

Yes we should be able to start clearing it a bit quicker once the loans are paid off and the mortgage comes down, will just have to keep a close eye on our finances to make sure we don't start overspending. It feel like we have been overdrawn forever!