If you are sitting in an office, restaurant or coffee shop take a look around you as about one in every ten people living in the UK are permanently in the red. New research revealed by Moneysupermarket.com suggests that there are around 5 million people currently living in the UK surviving on their overdraft. This statistic is a real eye-opener to the fact that we are a nation living off credit. And ofcourse who can forget that it is these forms of unsecured lending that contributed to the credit crunch, which sunk our country into recession.

From a consumer point of view, living out of your overdraft can itself be an expensive business and one, which can lead to more debt being accrued. Many banks charge around 19% EAR for arranged overdrafts, with this figures rising considerably to include fines and interest when dipping into an unauthorized overdraft. For example, Alliance and Leicester charge a flat fee of 50p per day to those customers who are overdrawn which can easily rack up if you are in the red regularly and do not have a formal arrangement in place. It would seem that the banks are certainly doing particularly well off this type of lending so consumers should wise up and take better control of their finances.

If you feel that you fit this bill, all is certainly not lost. There are a number of re-structuring options that you can choose. These can range from putting a more formal overdraft facility in place to arranging a term loan with your bank. A term loan will convert your overdraft into more manageable monthly repayments, which can come with considerable benefits. The main one being that in return for your commitment to repay the specified sum of money every month, the bank will offer you considerably lower rates of interest than an overdraft. This will help you take better care of your funds and in all likelihood save you money as well. A win-win situation.