HSBC Graduate Overdraft - no longer interest-free!

scottishlass · 3 July 2008 at 9:07PM

Well I havent had a response from HSBC which they promised that I would recieve within 5 working days. Will wait until the weekend and then contact FO. Not impressed with the fact they changed their website in July 2006 without stating that it had changed (if that makes sense)

countvoncampbell · 4 July 2008 at 12:19AM

So how does the intertest charge work? That's the bit I don't get...

I have recently received the letter from the HSBC, as of 19th July my overdraft will no longer be interest free and it will be charged at a rate of 18.9% EAR variable...

I'm currently £1300 overdrawn and I'm not expecting any wages until mid August... so, what I want to know is:

What interest will I pay?
When will I pay it?
How often will I pay it?

Richard019 · 4 July 2008 at 2:01AM

ellie_jane wrote: »

especially as our wages are not very high and our student loan payments are often very high!

Out of interest how does that bit work? A student loan repayment is 9% (I think) of your earnings over £15k pa. You can only therefore have a high repayment when you're earning a lot. At first I thought you must be talking about a commercial loan from when you were students but you said the payments are "often" high and I would have expected a commercial loan to be a constant repayment.

If you've been overpaying on the student loan due to irregular earnings you can ask them for the extra back. Obviously it adds it back onto your debt and it's not 0%, but if you've made a fair amount of them it might help sort your current cash flow problem out.

scottishlass · 4 July 2008 at 9:30AM

countvoncampbell wrote: »

So how does the intertest charge work? That's the bit I don't get...

I have recently received the letter from the HSBC, as of 19th July my overdraft will no longer be interest free and it will be charged at a rate of 18.9% EAR variable...

I'm currently £1300 overdrawn and I'm not expecting any wages until mid August... so, what I want to know is:

What interest will I pay?
When will I pay it?
How often will I pay it?

Ok from what I can work out using HSBC site you will pay it monthly but on the date that you opened your account ( so if its was the 20th it would be monthly on that date)

For how much.... well I would think it would be

0.083 (1 month) * 0.189 * 1300 = £20.475 approx in interest (I think thats right)

Interesting that those that graduated after us will only be paying 9.9%.....

ellie_jane_2 · 4 July 2008 at 11:52AM

Richard019 wrote: »

Out of interest how does that bit work? A student loan repayment is 9% (I think) of your earnings over £15k pa. You can only therefore have a high repayment when you're earning a lot. At first I thought you must be talking about a commercial loan from when you were students but you said the payments are "often" high and I would have expected a commercial loan to be a constant repayment.

If you've been overpaying on the student loan due to irregular earnings you can ask them for the extra back. Obviously it adds it back onto your debt and it's not 0%, but if you've made a fair amount of them it might help sort your current cash flow problem out.

No unfortunately I haven't been overpaying on the student loan (only in my mind of course!) I was referring to colleagues and friends who are under an older system and are paying back over £100 each month when they don't earn much to begin with. Luckily mine isn't too bad but I find the fact that it is subject to interest rates disgraceful - yet another thing which has changed since we originally signed up.

mogwai · 4 July 2008 at 4:45PM

I have had the same letter from HSBC telling me my interest free overdraft would remain only up to £1000 but when I called the other day was then told that there is no more interest free portion on my overdraft!

I am telling my sister who is currently studying to jump ship ASAP and move to Barclays or Natwest who offer an infinitely better service but she is still resisting - the young eh! never learn..

kirsty000 · 4 July 2008 at 5:06PM

Hi. Dont know if this is of any help. I emailed them regardin my student overdraft and this is what they said:

We confirm that we will operate your account free of overdraft charges as long as the balance remains in credit, or where no agreed overdraft is in place, overdraws by less than GBP50, for no more than 14 days in any charging period. Where none of the above applies, charges are applied at the standard tariff. details are displayed in all of our branches. If any charges are pending on your account, we send out a personal notification, which is sent with your monthly statement.

I confirm that as a 3rd year Student Account, your account has an interest free overdraft limit of GBP1500.00. Interest free overdraft limit for a Student Account is as follows:

Year 1 GBP1,000
Year 2 GBP1,250
Year 3 GBP1,500
Year 4 GBP1,750 (dependent on course)
Year 5 GBP2,000 (dependent on course)

The interest free overdraft limit will be reviewed every year during the last weekend of June. Once you complete the course, this account will be converted to a Graduate Account.

Once the account is converted to a Graduate Account you have 3-5 years (depending on the duration of your course) to repay the overdraft limit. The interest free overdraft for a Graduate Account, at present, is as follows:

Year 1 - GBP1500
Year 2 - GBP1000
Year 3 - GBP500
Year 4 - GBP500 - This is only available to HSBC Student Service customers who completed a 4 year course.
Year 5 - GBP500 - This is only available to HSBC Student Service customers who completed a 5 year course.

mikepaulden · 4 July 2008 at 7:01PM

I received a letter yesterday stating that my overdraft will remain interest-free up to £1000 from 30th July, contradicting the earlier letter which stated that my interest-free overdraft will be withdrawn on 19th July.

I rang HSBC this evening and the person I spoke to told me that the earlier letter was sent out in error, that the second letter is accurate, and that my overdraft will indeed remain interest-free up to £1000 beyond 30th July. I asked for this clarification in writing and was told that letters were being prepared and that I'd receive one over the next few days. Perhaps HSBC is climbing down?

scottishlass · 4 July 2008 at 9:00PM

mikepaulden wrote: »

I received a letter yesterday stating that my overdraft will remain interest-free up to £1000 from 30th July, contradicting the earlier letter which stated that my interest-free overdraft will be withdrawn on 19th July.

I rang HSBC this evening and the person I spoke to told me that the earlier letter was sent out in error, that the second letter is accurate, and that my overdraft will indeed remain interest-free up to £1000 beyond 30th July. I asked for this clarification in writing and was told that letters were being prepared and that I'd receive one over the next few days. Perhaps HSBC is climbing down?

Lets hope so...still no response to my complaint.

Moneybags55 · 7 July 2008 at 10:02AM

scottishlass wrote: »

Well I havent had a response from HSBC which they promised that I would recieve within 5 working days. Will wait until the weekend and then contact FO. Not impressed with the fact they changed their website in July 2006 without stating that it had changed (if that makes sense)

If you check the small print it is actually your responsibility to check the terms and conditions. The page on their site for the account can be changed without them needing to inform you.

HSBC Graduate Overdraft - no longer interest-free!

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