How to Repay your Overdraft

There are many people that have an overdraft. Most banks and building societies will offer an overdraft facility on a current account so that you can borrow extra money should you need it. Many people use them if they run out of money before they next get paid. When their salary goes into the account then it will repay the overdraft for them. They are very convenient, simple to use and often available even if you do not want them. Unfortunately, it can be all too easy to use them to borrow so much money that your income does not repay it or you struggle each month and get more and more overdrawn by the end of it. You may be in a situation where you need help in repaying.

 The idea of finding a lot of money to repay can be daunting and it is understandable that you might be avoiding doing so if you can. However, there is not really a need to worry as there are things that you can do. Do not expect it to happen quickly, but slowly over time you should be able to whittle down the overdraft.

Look at your finances and set budgets
The first thing to do is to be clear on what is going on with your finances. Find out what you are earning, what you owe on your overdraft and what you are paying out. Look at what you have to pay out and what you are buying that is not necessary. Set a budget so that you put aside money to pay all of your necessities and then keep only a little for luxuries if you need it so that you do not spend more than necessary. Hopefully this budget will be lower than your income so that there is money left to start reducing the overdraft.

Look at cheaper borrowing options
An overdraft can be an expensive way to borrow money. This means that there may be better options available to you. You might be able to get a personal loan, for example which will pay off your overdraft and that will have a lower interest rate so it will be cheaper. However, not all borrowing ill be cheaper and you could get yourself into trouble if you use a loan to repay the overdraft and then get overdrawn again. Then you will not only have loan repayments to make but an overdraft to worry about as well. Therefore, be careful to make sure that you are confident that this will not happen to you if you do decide to take a loan out.

Look for opportunities to make more money
It can be good to look out for ways to make some extra money which you will be able to put towards paying off your loan. There are many opportunities available and they are very varied so hopefully you will be able to find something that will be useful to you. Firstly, if you have a job then it might be possible for you to work more hours, ask for a pay rise or even try to get a promotion with a pay rise. These could help to increase your salary which you can use towards repaying the overdraft. You might even want to change your job to one that is higher paying.

This may not be an option for everyone though but there are other options. It could be possible to sell items that you own and no longer need which could raise some money that you could put towards the overdraft. If you own your home you may be able to rent out a spare room, garage, attic space or driveway in order to earn some extra money that way. You might be able to pick up some work online to get some extra money coming in as well.

Cut down spending
Cutting down your spending should help you to not build up your overdraft so much and should hopefully mean that you can reduce it as well if you spend less than you are earning. Reducing spending can seem really hard, but there are things that you can try which are not too difficult and take a small amount of time. For example, if you check how much you are paying for electricity, gas, phone, TV, broadband and things like this, you might be able to switch to a cheaper company and save money. Changing your insurance company might also reduce how much you are paying. You may also be able to compare prices which you are shopping to see whether you can pay less for your food, toiletries and cleaning products. Do try to cut down on buying luxury items for a while, so that you can use that money towards repaying hat you owe instead.