I am £2,300 in debt. Would you consider this to be a high amount of debt?

Question

This is my only debt and it is with an overdraft facility at my bank.

When I get my monthly wages I am still in the red!

Answer 1

Not at all!! I work in a high street bank and believe me that is nothing!
Most people I deal with have overdrafts, mortgages, loans, credit cards etc. etc.
If you want to get rid of the debt, ask your bank to restructure the overdraft as a loan, then you can pay off a set amount each month to clear it in full over 2 or 3 years. £2500 over 3 years would be around £80 per month.

Answer 2

Compared to some other peoples debt no it isn't a lot, but comparing it to other people isn't important.
Compare your debt to your income.
You get paid (how much?) and your still overdrawn - that is a problem!
Ideally your overdraft limit (you don't have to use all the limit) should be no more than half your monthly income so that when you get paid you do go back into credit.
Your overdraft will be considered "hardcore" by the bank, providing you stay within your limit the bank may not concerned in the short term.
You need to consolidate your overdraft and any cards into a single loan (repaid over at least five years to keep repayments down), cut the overdraft to half your income (£1000 salary = £500 overdraft at a maximum).
Talk to your bank about consolidating the debt and planning a budget cos your debt is TOO MUCH.

Answer 3

If you are still in the red after payday, and if it has been like that for some time and is not getting any better, then it is too much.

Overdrafts are usually one of the most expensive ways to go into debt. You would almost certainly be better off getting a loan at the cheapest interest rate you can find (NOT from Carol Vordermann!) and paying it off steadily at an amount you can afford (e.g. £100 a month over 2 years).

Answer 4

There are 2 types of debt...one you can manage and the other is the one you can't.
Personally if I were in your position I would get a loan with a low APR to cover the overdraft and then make monthly payments but at the same time reduce your overdraft limit to 0.....

Answer 5

On the grand scale of things, your dept is small. The fact that it is your overdraft facility i imagine can be rather depressing because even when you get paid your still overdrawn.

have you thought about taking out a small loan to pay it off, that way you only need to pay back a small amount every month. shifting the debt I know, but you have sort of put yourself in a difficult situation!

hope the New Year looks brighter for you!

Answer 6

Nah, that's not too much at all, but you do need to get a plan to sort it out. The best bet is to talk to your bank, they wioll probably organise you a personal loan, and clear your over draft, if you pay of that debt over 2 years it'll only be just over£100 per month, which is next to nothing - but you will need to take a look at your spending and work out how you got over drawn in the first place and make some changes so it doesn't happen again. You'll need to spend £100 less to cover the loan, and some more on top of that so you don't slip again

A few small changes can make a big differnce though, for instance I started binging lunch to work instead of buying it here and worked out I'm saving myself approx. £1500 per year!!

Answer 7

There are people with more. It's more than most people's monthly wages. Maybe you should look into converting in into a personal loan over say 24 months and cancel the overdraft?

Answer 8

It depends on how much you earn per month.

In any case, what you need to do is compare your overdraft from one pay day to the next....

If your overdraft is getting bigger, then you've got a cashflow problem which you need to sort out. It means you're spending more than you're earning.

If the overdraft is getting smaller, then you're heading in the right direction. You might want to come up with a plan to clear the overdraft sooner.

Answer 9

Any amount of debt in this day and age is high. For ways of dealing with it and support i would suggest visiting a great website which costs you nothing - there are huge amounts of advice listed there and it certainly has some brilliant ideas to help you save money and pay off your debts. It has been a godsend to me and numerous people i know.
www.moneysavingexpert.com

Answer 10

i dont think its a lot no. iv just graduated from uni and i have an overdraft of £2000 so now that im working i have started reducing my overdraft limit each time i get paid and gradually i will pay it back. that works for me but it may be worth while talking to a financial planner who could work out how you could cut back on the amount your spending. I wouldnt worry about it though. just dont let it get out of control.