HSBC Managed loan

Farmlad1983_2

I have a hsbc current account which is 1,600 overdrawn. i recently written to hsbc to offer repayment plan of £20 per month, and they have since agreed to this on the basis of a managed loan, which i will have paid off by 2016. Also i'm having to pay 516.41 in credit charges!!

Can i refuse this loan as all i want to do is just pay off the overdraft with no extra charges at all (as after all if i take this matter to court all intrest charges will ahve to be stopped) and what i should i tell them?

any help appriciated

Dan

CLAPTON

The situation is rather unlear

were you over your authorised OD limit?
why did you write to HSBC?

Farmlad1983_2

i was over my overdraft limit and wrote to them as they kept sending me these letters asking if they could help with the balance of the overdraft

CLAPTON

Well, if you are paying 20 each month for 7 years that's 1,680.. if you owe 1,600 then it seems a very good deal... so I don't understand what you mean about paying 516 in credit charges.

They will down grade your current a/c so you will then have no OD ..but presumably that will suit you.

Also I don't understand when you say if you took them to court then all interest charges would have to stop... that's not how I understand it.

Farmlad1983_2

i just wanna see where i stand if i refuse the managed loan as i wish not to pay it off over 7 years plus pay an extra £516 on top of that. I don't wish to keep the account as i have another one elsewhere, but i wish to pay off the debt

CLAPTON

From the figure you posted I don't se how you are paying an extra 516.

If you don't want to pay at £20 for 7 years what is your proposal for repayment?

GlennyNat

What if you don't go on a managed loan with them and they dont take it to court as your making £20 payments?

They will just charge you the interest for an unauthorised OD and you won't actually be paying any of it off.

I may of calculated this wrong but even if the interest rate was 20% (could be higher if unauthorised) then you will get £26 in interest a month plus a charge for being over your limit (£12?).

GlennyNat

CLAPTON wrote: »

From the figure you posted I don't se how you are paying an extra 516.

If you don't want to pay at £20 for 7 years what is your proposal for repayment?

I think he is saying he wants to pay £20 off a month but HSBC want to set him up with a loan where he will pay £1600 +£516 in interest over 7 years.

Margin_Walker

Its also worth noting that the interest rate on a Managed Loan is 7% over the BOE base rate making a current rate of 8% percent where as the rate on the overdraft will be up around 19%. You can also make overpayments to the Managed Loan if you are unhappy with the term.

On a side note HSBC will only suspend interest for a maximum of three months and only then if you are in the worst possible financial difficulty. If demand is issued and you account is written off to their debt collection agency(Metropolitan). Interest will be frozen but you will have a default marker on your credit reference agency files.

It's up to you really