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  • FIRST POST
    • xstream2000
    • By xstream2000 10th Nov 17, 8:29 AM
    • 1Posts
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    xstream2000
    Lloyds have cornered me
    • #1
    • 10th Nov 17, 8:29 AM
    Lloyds have cornered me 10th Nov 17 at 8:29 AM
    I have always run a lloyds current account in a authorised overdraft facility. I know this isn't the best way to save money but this is the position I have been in for the last couple of years whilst starting and trying to grow my business. I opperate anywhere between £2500 and £4500 into a £5000 authorised overdraft. My usual monthly charges for this facility with the interest is around £6 Charge and £66 interest. So its costing me £72 a month....

    As of the first of November I have been being charged £6.50 to £6.89 a day for being in my authorised overdraft. I called the bank and they informed me that it was the new way they calculate overdraft fees as of the 1st of November and that I would of had a letter. This basically now means I will be paying in excess of £200 a month to use my overdraft as I always have done.

    The "customer service representative" passed me through to a sales team who offered me the option (Only option) to take out a loan for the value of £5000 to consolidate the overdraft. I admit this course of action will cost me less than the new charges and of course will give me a way out of the long term debt however, the monthly charge will still be just over the £100 mark meaning I will still be paying more monthly impacting on my monthly financial position. I will also incur more debt in the fact that the loan will load an additional £3200 worth of interest over the term, meaning from my current position of £4700 worth of debt I will be £8000 worth of debt. I really don't know how they can just change a policy and charge me over three times the amount of interest when I have always conformed to the allowed limits, its not Unauthorised overdraft fees but it feels I am now going to pay for those that don't manage their money according to policy.

    Is there anything I can do or do I just take the loan
Page 1
    • zx81
    • By zx81 10th Nov 17, 8:41 AM
    • 14,043 Posts
    • 14,729 Thanks
    zx81
    • #2
    • 10th Nov 17, 8:41 AM
    • #2
    • 10th Nov 17, 8:41 AM
    Take the loan.

    They've offered you a good way out of the overdraft and it's a much more suitable product for long term borrowing.
    • StopIt
    • By StopIt 10th Nov 17, 8:43 AM
    • 1,371 Posts
    • 1,167 Thanks
    StopIt
    • #3
    • 10th Nov 17, 8:43 AM
    • #3
    • 10th Nov 17, 8:43 AM
    You can look elsewhere for a loan, apply for a money transfer credit card or open an account with a new bank and apply for an overdraft there. But yes, this has been on the cards for a while. See here for more details and more options:
    https://www.moneysavingexpert.com/news/banking/2017/11/halifax-and-lloyds-overdraft-changes---the-winners-and-losers
    An overdraft is never designed to really be a facility to be in for years on end, although many end up there and the new Lloyds charges are a double edged sword. lower charges for low overdrafts, and high chargers for bigger ones.


    Is this a personal overdraft for a business purpose? Have you got a business account? As the business OD rate is much different: http://www.lloydsbank.com/business/retail-business/loans-and-financing/loans/business-overdraft.asp
    I'm a Board Guide on the Debt Free Wannabe, Credit Cards and Loans boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

    In debt and looking for help? Look here for the MSE Debt Help Guide.
    Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.
    • robber2
    • By robber2 10th Nov 17, 8:59 AM
    • 273 Posts
    • 217 Thanks
    robber2
    • #4
    • 10th Nov 17, 8:59 AM
    • #4
    • 10th Nov 17, 8:59 AM
    Pay off the overdraft with a loan then cancel the faciltiy (or reduce it to say £200) otherwise in a year or so you will find yourself with a loan to pay off PLUS an expensive £5,000 overdraft.

    Rob
    • TonyMMM
    • By TonyMMM 10th Nov 17, 9:07 AM
    • 2,491 Posts
    • 2,660 Thanks
    TonyMMM
    • #5
    • 10th Nov 17, 9:07 AM
    • #5
    • 10th Nov 17, 9:07 AM
    I will also incur more debt in the fact that the loan will load an additional £3200 worth of interest over the term, meaning from my current position of £4700 worth of debt I will be £8000 worth of debt.
    Originally posted by xstream2000
    You will pay a lot more than that if you keep the debt in the overdraft
    • PeacefulWaters
    • By PeacefulWaters 10th Nov 17, 9:17 AM
    • 7,152 Posts
    • 8,806 Thanks
    PeacefulWaters
    • #6
    • 10th Nov 17, 9:17 AM
    • #6
    • 10th Nov 17, 9:17 AM
    Take the loan.

    Manage your money tightly.

    Never go overdrawn again.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 10th Nov 17, 8:46 PM
    • 4,637 Posts
    • 28,010 Thanks
    Blackbeard of Perranporth
    • #7
    • 10th Nov 17, 8:46 PM
    • #7
    • 10th Nov 17, 8:46 PM
    If you’re using this facility in your business I would take a serious look at your bottom line!
    I soled my last sock
    For a whiff of your cheap perfume filled with hope of tears gone by
    • nic_c
    • By nic_c 11th Nov 17, 9:39 AM
    • 1,078 Posts
    • 611 Thanks
    nic_c
    • #8
    • 11th Nov 17, 9:39 AM
    • #8
    • 11th Nov 17, 9:39 AM
    If you are constantly in O/D then it could be argued you are not managing your money

    If the £5000 loan is being repaid back at just over £100pm then it sounds like a 60 month loan. On you old overdraft, paying £72pm in fees and interest, you would pay £4320 over five years in fees and interest, and still owe the £4700.
    So even if they allowed you to continue your overdraft at your old rate, you would be £1120 better off by taking the loan.

    Just to reiterate - You are saying the loan would mean £8000 worth of debt, well if they let you continue your old overdraft as you wanted it would be £9120 worth of debt with the added problem of still having £4700 of that debt owing after 5 years and being no better off, where as the loan would mean been debt free (it terms of just this debt and not others you have).

    You are currently paying £72 per month to service your debt and not getting anywhere. The just over £100pm would mean this debt would be gone in 5 years.
    Last edited by nic_c; 11-11-2017 at 9:45 AM.
    • Richey_
    • By Richey_ 11th Nov 17, 9:46 AM
    • 261 Posts
    • 297 Thanks
    Richey_
    • #9
    • 11th Nov 17, 9:46 AM
    • #9
    • 11th Nov 17, 9:46 AM
    ^^ is a good response from Nic_c ^^

    Bottom line is it’s their money and you have agreed when you borrowed it they can change the terms and conditions at any time. If I was you, you can either take the loan or take your business elsewhere. Only two real options. Also read your post, I am a halifax customer and they have been writing to me for months about these changes. Halifax and Lloyd’s are the same bank group and have introduced the same changes to overdrafts.
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