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Unemployed graduate with high overdraft fees

Rosali
by Rosali 11 October 2010  |  Comments 2 comments  |  Love Love  0 loves

My friend graduated two years ago and is still trying hard to break into a competitive career by opportunistically working in various internships and temping in between. As a result she is generally in employment but does not have a fixed income that she can plan around.

She is overdrawn by £1500, which is her only debt (other than student loans), but her current account is charging her £1 a day for this.

Is there a cheaper way that she can manage this debt? Is there a current account offering a cheaper overdraft (without having to pay in a guaranteed salary each month)? Or would it be better for her to take out a loan with a lower interest rate? Your advice is much appreciated.

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Comments (2)

  • JoeEasedale
    Love rating 159
    JoeEasedale posted

    A loan would probably be cheaper if she could get one, but ONLY if the overdraft was NEVER used in the future. An overdraft is designed for unforeseen occasional events ( like maybe one or 3 days every five years or so), not a facility that never returns to credit.

    Posted on 11 October 2010 | Love Love  1 love Report
  • MikeGG1
    Love rating 824
    MikeGG1 posted

    Is she able to gradually repay the loan? If so, she should go for the loan over a period she should be comfortable with.

    The amount should cover the maximum overdraft she is likely to need so as to avoid using it again except in emergency.

    Mike

    Posted on 11 October 2010 | Love Love  0 loves Report

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