An overdraft can be an expensive way to borrow money and the longer you stay overdrawn, the more the costs rack up.
If you are paying more than you are comfortable with, do something about it.
Scroll down for options on how to pay it off quickly.
Use a balance transfer to consolidate debts at one low rate. Compare balance transfer credit cards on Finty.
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Can I balance transfer an overdraft onto a credit card?
Currently, there are no banks that allow you to balance transfer a personal overdraft to a credit card.
Balance transfers are typically restricted to credit cards, store cards, and charge cards. Some banks allow balance transfers from personal loans.
However, as you can see below, there are some alternative options available.
Alternative ways to pay off an overdraft
While you can’t use a credit card balance transfer to pay off a personal overdraft, there are several alternative options worth considering.
It may take longer, but implementing a budget is one of the best ways to free up money and get out of debt. It's an added bonus that you can do it yourself without having to apply for anything new.
If you don't want to create your own budget, consider cutting out excess expenses for a short period of time — or permanently — to free up cash that can be used to repay the overdraft. This can be anything from monthly streaming subscriptions and gym memberships to takeaways and home delivery.
Credit card cash instalment plans
Most credit cards now have instalment plans, allowing you to move some past purchases to a fixed repayment plan.
However, some banks allow you to withdraw cash from your credit card to your bank account with a specific type of instalment plan commonly referred to as a cash instalment plan. These are like a credit card cash advance, but without the high interest rate.
The following banks offer cash instalment plans on their credit cards:
- Bank of Queensland
- Virgin Money
Interest rates for instalment plans are often personalised. Note that if you bank does offer a cash instalment plan on your credit card, the amount you can withdraw is limited to how much available credit you have.
A personal loan can be a great way to consolidate your debts, including an overdraft. Interest rates for personal loans can be fixed or variable. Personal loans are also a relatively fast way to pay off an overdraft. Several lenders can approve an application and deposit the funds on the same day, especially if you already have an account with them.
Depending on the lender, the rate you get may be personalised. This can work in your favour if you have good credit.
Use your savings
If you have been putting money aside in a savings account, you could use it to pay off your overdraft.
While using your savings to pay off an overdraft may not sound like a good idea, it is better to pay off expensive debt because the interest rate on your savings is almost certainly lower than what the overdraft costs.
When you have paid off your overdraft, you can rebuild your savings.
Make more money
Paying off an overdraft needn't be just about making cuts and saving money. There are many ways to make more money quickly, which you can use for debt repayments.
- Sell unwanted items. List some of the things you no longer need on marketplaces like eBay and Facebook.
- Earn cashback. Shop with a cashback website to earn a percentage of what you spend back.
- Get paid a sign up bonus. Several businesses pay a cash bonus for signing up.
Even though you cannot balance transfer a personal overdraft, there are other options to paying off debt. The most important thing is to take action and do something about it.