Overdraft on an unused account

seven1969

Hi

I've been trying to clear my debts and have already posted my debts/income etc on the DFW forum. I've taken loads of advice but wanted to ask about something specifically to do with overdrafts and non-active accounts.

About a year ago, in disgust I moved all my business from Abbey but left an unpaid overdraft of £1250. Reason being that they were no help when I was doing business with them and struggling to cope with my finances - I had asked them to open a 2nd account for me to pay my bills from - no overdraft, no frills etc, but they declined and offered me a loan at 14.9% instead. Thanks but no thanks. Hence the reason I moved.

Perhaps quite stupidly, I never closed my account as I was worried that Abbey would demand the full amount from me in one go. I've been paying into the account steadily and reducing the overdraft every couple of months. The o/s amount is now about £800. However, I've just received a letter from Abbey saying that they are reducing my overdraft to £200 from 1 December.

I don't have £600 to pay in and now I just know that I'll be hit with astronomical charges for going over my overdraft.

I think I should close my account and offer to pay the debt at £50 per month (the absolute max I can afford) but I'd be interested to hear some other advice.....

ShelfStacker_3

...isn't paying the debt at £50 a month effectively what they offered you in the form of a loan BEFORE you let the account default?

But whatever, if that's all you can afford, offer it. They're free to decline to accept your offer, however.

seven1969

I suppose in hindsight, taking the loan out might have been sensible but at the time, I really didn't want to take out any more debt. I just wanted to avoid the charges I was being hit with every month.

I've taken out loans before to pay off credit cards but let the cards build up again because I've kept a card "in case of emergencies".

If Abbey offer me a loan to clear off the overdraft, perhaps I should accept it as the APR is more likely to be lower than the APR on my overdraft?

littlechezza

I know how you feel and we have had the same problem, we didnt want to do it but we have gone for a repayment option and as long as we pay £50 (including interest) into the account it reduced, it seems like it will be forever but ours has now gone and we can close the account. Take care

Extant

You seem to be assuming they'll even let you close the account with an overdraft.

Mikeyorks

seven1969 wrote: »

If Abbey offer me a loan to clear off the overdraft, perhaps I should accept it as the APR is more likely to be lower than the APR on my overdraft?

They won't let you close the account until you clear the overdraft. As they're forcing your hand (either deliberately or as part of a standard review) ..... a short term loan with them (as that facilitates instant clearance of the o/d) may be the lesser evil?