Paying off bank overdraught and closing the account

mal1_2

Hi,

I need some help please, so I hope I've posted this in the correct forum area. Apologies if not. Anyway, here goes:

I have an account with a High Street bank which was opened in 1984(ish). It has an overdraught limit of just over £5,200 and my wife and I decided to move all of the incomings and outgoings to another account with another bank and just pay off the overdraught and also a monthly amount on a £5,000 loan with the bank which we have been paying off since 2004!

We felt that way we would be keeping the bank happy and doing overselves a favour by paying off the debt and for just under two years has been working fine.

However, the bank now say that they cannot renew the aggreement of the 'Temporary Repayment Plan' for the overdraught repayments as they can only do this so many times which we didn't know about.

They are now closing this account and are in the process of sending it to a debt collector to set up new repayments for the loan and overdraught. They said it will affect our credit rating.

We do not want this to happen because as far as we were concerned, the agreement was working. I don't think this is fair, so can anyone help please?

Many thanks and regards

Tixy

There is little you can do. Overdrafts are repayable on demand so they don't have to keep the account open.
How much were you reducing the overdraft by each month?
If you can afford to increase the monthly amount you have been repaying towards the overdraft you could try writing to offer this and then they may agree not to default you but it would be their choice and they are within their rights to do so and to mark it on your credit file.

mal1_2

Thanks for your response. We are only paying off a small amount on the overdraught as money is pretty tight at the moment but we offered to pay another £30 per month bringing it to £60 a month plus £70 for the loan. Thanks again

paulmcerlean

Unfortunately when you stop using an account that is in overdraft, most banks will call it in, which they are fully entitled to to. However some banks, depending on your relationship with them, will allow you to turn the overdraft into a personal loan - now you may incur extra interest but at least it will allow you to save any nasty surprises on your credit file - as what could happen is they will add a late payment marker to your file for every month that the account is sitting in this state.

Enquire about the above with them.

And not to be fussy, its overdraft, not draught.

iolanthe07

And not to be fussy, its overdraft, not draught

Actually, it used to be 'overdraught' until the word got Americanised. I think the old spelling is rather quaint, and it was nice to see it.