Tips to Repay your Overdraft

Tips to Repay your Overdraft

Having an overdraft can be a convenient thing to help you if you need a bit of extra money. You will be able to write checks and draw money at the ATM even though you do not have any in your account. However, it does have drawbacks as it can be a very expensive way to borrow money. This means that if you are overdrawn, you should take steps as soon as possible to repay what you owe.

Look at other borrowing options
It is wise to take a look at what other borrowing options are available to you. You might find that you have the opportunity to take out a cheaper loan that you can use to pay off the overdraft. This can save you money but you do need to be very careful. You need to start by making sure that you will be able to afford the repayments on the loan. Look into how much they will be and make sure that you will have enough money each month to cover those payments. Look back at bank statements and not what sources of income you have and what you spend your money on and you should be able to work this out.

Borrowing money does have additional risks though. You need to think carefully about whether you will be tempted to use your overdraft while you are repaying the additional loan that you have taken out. This could lead to you having two forms of debt and you will end up paying out more money and struggling financially even more. You know whether this is a big or small risk for you. Consider how you view your overdraft. If you feel it is something which never be touched apart form in an emergency you are probably safer in getting the loan compared with someone who feels that it is extra money that they can spend and have fun with.

Find extra income sources
Whether you decide to get a loan to repay the overdraft or you want to repay the overdraft without a loan, it is still wise to think about how you might be able to increase your earnings. If you can do this it will mean that you will be able to be more easily able to pay off your debts. There are lots of ways that you could try.

To get a lump sum of money then you could consider selling any things that you have that you no longer need or want. You might be able to social media, classified ads, auction websites or even have a garage sale in order to raise some money. Although this will not bring you in a regular income; it will help you to get a chunk of money that you could put towards paying back what you have borrowed.

Having a more regular income is a better way to finance the loan and there are many options for this. If you already have a job then you could try for a pay rise or promotion or see if there are more hours of work available that you can do. If you do not have this option then it might be possible for you to take on a second job so that you can get extra income this way.

Some people are not able to work or cannot work outside of the home due to a disability or family commitments. It is still possible to earn though by doing a work form home job. These come in many different forms and you could consider freelancing, starting a business or taking on small tasks. There are many online jobs that you can pick up as well. It is important to be careful though as it is easy to be conned by work form home companies. Never send them any money and make sure that you read the reviews first to ensure that you trust them.

Spend less elsewhere
It is also wise to make sure that you cut down your spending. You want to keep as much money as you can for repaying your debt and therefore you need to try as hard as you can to only spend the minimum amount. This means that you will need to compare prices when you buy things and make sure that you get the best value for money and only buy what is completely necessary. This can be difficult but it is worth reminding yourself that it will only be until the debt is repaid and then you will be able to afford a few more things. Getting into the habit of not spending too much is a good idea as it will hopefully get into good habits that will prevent you from spending too much and going overdrawn in the future.

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