Overdraft plan could require debt advice

Consumers who rely on their overdraft facility may want to consider taking out a personal loan to pay it off, although this could in turn lead to a need for debt solutions.

Financial advice site MoneyDashboard.com suggests that taking out a personal loan could prove to be cheaper in the long run, as the interest payments will be lower.

Gavin Littlejohn, from the website, claims that a £5,000 overdraft could be paid off with a loan which could ultimately cost a little under £5,700 (£5,679).

Whilst this could prevent consumers racking up debt based on changing overdraft interest fees, it still requires them to go into debt to the loan company.

Kevin Still, director of Atlantic Financial Management, says: "There is a presumption that you will be accepted for a new personal loan at an acceptable interest rate.

"If you already have debt problems then this is not a given and you may need to look at including the overdraft in a holistic debt solution. Atlantic offers new bank accounts without credit checks where people on a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA) or even subject to bankruptcy will be accepted."

Debt problems – next generation

17/03/2011

Parents across the UK currently dealing with debt problems may be seeking debt help regarding their ...

Debt problems - life events

21/02/2011

It appears debt problems could well be made worse by Brits underestimating the cost of life's big ev ...

Brits get frugal over debt problems

11/01/2011

The average Brit is looking to avoid debt problems this year by making cuts to their lifestyles, in ...

Middle aged face debt problems

14/12/2010

People in their middle ages could soon be facing severe debt problems as it appears many of them are ...