Loyds Tsb cancelled overdraft and gave us a loan?

elhell

We have a joint account with Loyds Tsb and until reciently we had a £1000 overdraft.
We own our own home and my husband's salary is paid in monthly. Recently he was told that our overdraft had to be paid back and we would have to take out a loan with Loyds TSB to do this.
Is this allowed? and secondly since we have little other debt why would our overdraft suddenly be cancelled?

ZiggyStardust_2

How long have you had the overdraft, do you go over your agreed limit?

Abit different but a couple of years ago I was approached by Lloyds offering a loan to pay off my lloyds credit card (£1000) and and persuaded me to have an extra £500 (total loan £1500) They cancelled my student £1500 overdraft without any warning leaving me £700 overdrawn (without an official overdraft) for which they started applying hefty charges and without ANY money :eek:

They stated that I had been made aware that the loan would replace my overdraft ( I hadn't) After much arguing and stress (why would I leave myself in this postition?) they listened back to the taped conversation and found that I was in the right (I had clearly stated "this won't affect my overdraft will it?" to which they replied "no." They accepted they had made a mistake and eventually gave me back my overdraft.

Be very careful with this bank x

Rafter

An overdraft is repayable on demand - so yes!

If Lloyds tried to charge you a higher rate of interest on the loan they would be on very dodgy ground with the FSA about treating customers fairly.

You are under no obligation to take Lloyds offer though. Your cheapest option is probably to take out a 0% credit card for purchases, put all your spending on that for a couple of months and repay your overdraft that way. Then make sure you save up enough each month to repay the 0% card.

If you have little other debt and a good credit rating, see no reason why you couldn't do this - particularly for a modest amount of £1000.

Unfortunately the longest 0% deal at the moment is only for 6 months (Yorkshire bank or co-op) so you will have to save £167 per month to make sure you have enough saved after 6 months to pay off the bill. Even then, at 16.9%, the rate on the Yorkshire bank card is probably not disimilar to your overdraft rate at Lloyds?

R.

elhell

Thanks, we are already doing this. Actually we got a 0% deal for 12 months on a barclay card last week so we should be fine.

Thanks ver much

BenL

and you are now switching banks due to this lack of service? Other banks e.g Abbey/Santander would match your overdraft and offer some time at 0% during the switch.

elhell

We haven't shifted banks yet but we definately will. I'll look into it when I'm off on holiday next week.

Thanks for advice.;)