bank 'unfreezing' interest on overdraft

carolbee

Hi, hoping for a bit of advice from anyone who has been in this situation or who knows what to do

we have a 2 bank accounts with lloyds amonting to £4800, In July last year we negotiated the interest to be frozen for six months, I was hoping to be able to carry on with this for a little while longer, we are paying £50 per month back to them. we had a letter today to say this overdraft agreement was coming to an end, when I phoned to ask them to extend I was told we would be getting a letter from another of their departments offering us a loan (!!), presumably at some sort of interest so that we could transfer this sum to a loan, pay back at the same monthly payments and then reopen a current account with them back on a normal basis and - in her words - start to repair our credit rating, I think it will take more than that.

has anyone else been in this situation, do we have to accept this, given we are unable at present to a) pay more per month and b) pay off this full amount

we have all our other debts under zero interest but I am now wondering if they all might do the same

thanks

Kevicho

i dont think they are helping much and there is a section in the banking code which states they have an obligation to not cash in on your plight, hopefully someone will post that

Have you considered 0% balance transfers to help you out?

carolbee

not an option as have other debts as well, thanks for info, will go and find out about banking code wording, I knew someone would have some info up their sleeves!

Kevicho

Have you already posted your SOA (list of income/outgoings) so the other members can rabidly start saving you money in other areas

carolbee

took advice from national debtline last year and have all our debts on 0% interest at moment. have been avid lurker if not poster for last year and have sold 2nd car, changed utilities/insurances, don't buy unneccesary items, all the tips ie 18866 for phones etc, have a proper budget and follow it, don't think I can scrape much more off!

although it will take a long time to pay our debts back, just this month I was thinking that we could afford to pay a few lump sums off that we have saved
we can manage our life comfortably now, and I suppose I begrudge having to start to pay the interest to be honest! even though the debts are our fault.

jonesMUFCforever

carolbee wrote:

took advice from national debtline last year and have all our debts on 0% interest at moment. have been avid lurker if not poster for last year and have sold 2nd car, changed utilities/insurances, don't buy unneccesary items, all the tips ie 18866 for phones etc, have a proper budget and follow it, don't think I can scrape much more off!

although it will take a long time to pay our debts back, just this month I was thinking that we could afford to pay a few lump sums off that we have saved
we can manage our life comfortably now, and I suppose I begrudge having to start to pay the interest to be honest! even though the debts are our fault.

If your account is operated by their collections dept then the loan rate will be very low indeed compared to what the rest of us have to pay!

AGB863

I will say that I had one of my clients offered a very similiar deal, where they were given a loan that writes off the debt and he now continues to pay the same amount of money each month that I got the bank to except when I first made an offer of repayment based on his income and expenditure.

So effectively, he got a 0% interest loan, payable over 10 years and his credit score will show that the debt, that he previously defaulted on, has now been cleared.

Saying that out of the 250+ clients that we work with, it is the only one that is has been offered.

carolbee

am waiting for letter from them to see what their proposal is, ie interest rate, if it is low think we will have to accept, am trying to scrape as much as I can together to pay off whilst 0%. have never heard of anything like this before on the boards which is why i posted. are you a debt advice worker?

AGB863

correct. I work in the voluntary sector ie we do not charge people for the work we do

carolbee

thanks on behalf of a whole community of us for what you do, maybe some of the more experience of us, whole have dealt with their debt successfully, should volunteer as well, national debtline were very helpful to us