Temporary Repayment Agreement Help - Lloyds TSB

gmbunn

Hi folks,

Ive got an issue and wanted to hear other people out on it. Ive got a graduate overdraft of about 800 with TSB collections and for the last 6 months its been on a repayment agreement. Its time for it to expire so I asked to extend it. TSB are saying I can repay £35 per month but they cannot freeze any interest so £13 of the £35 will be absorbed in interest.

Ive pleaded but they refuse to be able to move on this. My financial situation is somewhat difficultat present but I dont want to risk them defaulting me (on my credit files).

Am i being unreasonable thinking its not fair that a third of the repayment will not even reduce the balance?

Thanks

premierfella

I have every sympathy, but it seems fair to me as that equates to somewhere close to 20% p.a. which is high but arguably not exhorbitant (I assume they have already given you 6 months interest free). The repayment agreement may already have done some damage to your credit file in any case (albeit substantially less damage than a formal default will do).

The amount means that Lloyds TSB are probably taking the stance that the repayment is affordable and that they have covered their "responsible lender" obligations over the last 6 months. Other lenders may have been more generous (I have a family member who is repaying a frozen credit card account interest-free under not dissimilar payment terms).

If Lloyds TSB stick to their existing position, and you don't want to default, I'm not sure you have many options other than to swallow the interest terms unless you can find an alternative cheaper source of funds to pay this off (friend or family loan, credit union, etc).

Good luck.