Help with a LTSB loan

mrg2010

I have a loan with Lloyds TSB that I took out in 2006 for £16,000. It was an 8 year loan and obviously I'm around half way paying it back (minus a few optional payment holidays they allow).

Also, I have a large overdraft with Lloyds TSB of £5600 which I want to get rid of and I wondered whether Lloyds would allow me to re-start my loan payments from fresh and release the £8,000 I've already paid back.

I've never missed a payment on this loan, but I'm worried with the state of the banks at the moment they would not allow me to do this. It would be worth my while as I am currently paying between £40 to £50 on interest per month just for my overdraft, plus my account fees of £17.

Would this be something you think they might do/is there someone on here who has done similar? Any help would be really appreciated.

Tixy

Hi

It probably depends on how you have run your overdraft recently. Do you go over you overdraft limit on a regular basis? Does your account get back into credit each month when you are paid (I'm guessing perhaps not considering the size of the overdraft).

What they might actually do (if anything) is start up a new loan for both your debts and take your overdraft limit away from you. So it would be subject to entirely new terms and a new interest rate (which at a guess would be a higher rate than you paid in 2006).

What APR are you paying on your current lloyds loan? You need to be careful that if they do agree to consolidate your debts and start a new loan that they don't then significantly push up your APR.

Also what is the APR on the overdraft? from the balance and interest charges you have posted it doesn't actually look to be that high an APR.

Would you want to take the loan out for a further 8years or for less? will you be able to increase your repayment amount?

If you are still interested in trying this then I would suggest the best way would be to go in branch and talk to an advisor in person, they should be able to give you an indication as to whether this might be possible without doing a formal application.

beanielou

The other thing is basically you will pay interest on the amount you have already borrowed twice.
I too think its very likely that if you are able to go down this road that they will take away your existing overdraft.

mrg2010

I'm absoultely fine living without such a big overdraft. If thats the price to pay but means there is light at the end of the tunnel and I'll be free of debt (although in quite a few years admittedly), I'd be really pleased!

As it stands currently my overdraft is not going down, I've been sat in it for years (through silly spending in my younger days). I just want rid of it because I've learnt my lesson and the value of money now. I'm now living within my means but its taken a number of years to get there...

Thanks for all your help folks, I'm going to arrange an appointment with the bank and see what they can do.

foxgloves

Your situation sounds very like my partner's situation a while back.......the last few K of his final loan from LTSB is the last bit of debt we are now paying back. In our experience, LTSB are very good at seeing the profit in a situation and it's very likely they'll give you a bigger loan which will wipe out your overdraft. There are good & bad points about this. You are likely to be paying off the loan for longer and they will almost certainly make more money out of you in interest payments. As the loan goes down, they will also keep writing to you to offer you more money. We had one as a consolidation loan at first (we were both big silly spenders until LBMs hit me first then him!) to get rid of lots of little debts, when it was over half paid off, my partner borrowed it again, a bigger amount the 2nd time and we seem to have been paying it off for a very long time (end in sight now though). On the plus side, you could get rid of your overdraft. We had never budgetted before & found it very difficult to do while we were both overdrawn every month. Particularly partner as he had been given what I thought was a really big overdraft from LTSB & being a spender, he used it. His salary disappeared straight into a black hole every month and as the chief budgetter in our relationship, it was really hard to deal in minus numbers. As soon as we got rid of the overdrafts, we found budgetting so much easier and apart from one slip (him!) following a big car bill, we have been in credit ever since. So, while I haven't enjoyed paying off the LTSB loan for so long. It has helped us overall to finally get overdraft free & a sensible budget in place. Sorry this is a bit long, hope it helps.