Updated on 18 May 2015.
If you find that you live most of the month in the recesses of your overdraft you may be paying upwards of 20% in interest, making this a very expensive form of borrowing, but there are ways for you to clear your balance and get out of your overdraft for good.
For more information on the size and cost of your overdraft, have a look at our guide.
You will need to have a lot of will-power to deal with your debts effectively. So make sure you are ready for a long haul, it is a marathon, not a sprint but you can, and will do it!
If you would prefer to seek professional assistance, you can speak to Citizens Advice Bureau, or the StepChange Debt Charity, alternatively you can read our useful guide that covers all the avenues of hope you can try.
If you struggle to find a provider that will accept you, you might consider opening a second stand-alone account. Our guide goes through what you would need to do.
Check our 0% money transfer credit card comparison for the best deals to make sure that your hard work into paying off your debt would not have been in vain.
Providing you choose the right loan you will reduce your interest payments, which will have a benefit as you will be able to pay down your balance faster and interest will accumulate at a slower rate.
Check our loan comparison tables to get an idea of the rate you would pay on an unsecured personal loan.
Read our guide on whether it is a good idea for you to use your savings to pay off your debt.
Remember, using your savings to pay off your overdraft could be a bigger cost saver as the interest payable on an overdraft will far exceed how much you will earn on any traditional savings account.
If you are not sure how to set on up, read our guide to start yourself on the right foot.
Each month you will then have paid off £100 of your overdraft, and by budgeting strictly you can eventually eliminate your debt.
You can ask your bank to reduce your overdraft limit every month in line with the amount you are chipping away, meaning you will not be tempted to stray further into your overdraft again.
If you feel tempted to dip into your overdraft after this point keep in mind the charges, interest rates, and amount of time it took you to pay it off - which should be enough of a deterrent.
If your bank starts raising your rate before you can pay it off, fight back with tools we offer in this guide.
Written by Sally at money.co.uk
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