Student Account terminated as Over 6 years

alistair29

I have recently been informed by Bank as I have had a student account for more than 6 years, they have reverted my account to a current account and are now charging me £1 a day in interest.

I have never been given the years free interest to pay it back and they are not willing to do this.

I have also asked would it be possible to freeze the interest if i made arrangement to pay the overdraft off monthly which was also declined.

Do i have any right to challenge the decision to allow me to have the standard year interest free and if so how do I go about it as the bank are unwilling to offer assistance.

thanks

Lokolo

The interest free option is only for students. Normal accounts for Halifax charge £1 a day for authorised overdraft under £2500 and £2 a day for authorised overdraft £2500 and over.

Your account is just a normal one, why should you get an interest free overdraft?

(sorry I couldn't tell if you were still a student or not, I assumed not)

scottishblondie

From the Halifax website:

"Keep your interest-free overdraft (0% EAR variable) for the length of your course. That’s up to five years – plus an extra year after you graduate."

So you've already had the maximum 6 years. Mine has also been called in as I've held it for longer than the allowed period.

jonesMUFCforever

Why would they write to you now and not say at the beginning or end of the academic year.

You are a first time poster and my nose is twitching!!

Derivative

As far as I am aware, in the T&C's there is a condition that states they can withdraw the overdraft for any reason and ask for full amount anyway.

Overdrafts are there for when you accidentally go over or 2 days before payday, not as a loan.

[Deleted User]

6 years reached so end of term according to site

jambosans

EdgEy wrote: »

Overdrafts are there for when you accidentally go over or 2 days before payday, not as a loan.

Normally I would agree, but I think student accounts are the exception.

The terms & conditions may say the usual "repayable on demand" yada, yada, yada, but there are mitigating circumstances which make student overdrafts unique and (IMO) more in common with long-term borrowing. For example, student overdrafts are often disprapotionate to the student's income. Provided account conduct (i.e. funded with student loan or similar) is within normal "student" parameters, the bank are unlikely to withdraw the facility during study. When the student finishes their course, the overdraft will revert to an interest/ fee charging structure, and in the (perhaps naive) assumption the bank will assume more structured repayment of the debt whilst earning interest from the now employed graduate.

@OP: aside from my general tendancy to say "the free lunch is over, grow-up", I would look in to opening a graduate account with another bank. Halifax are one of the few banks who do not offer graduate accounts (instead they offer "an extra year after you graduate."). A graduate account could give you an extra three years interest free (depending on how large your current overdraft is, when you graduated, job status, etc.), with a more structured repayment schedule (the interest free portion of a graduate account overdraft normally reduces each year). Take a look at the below guide for some options:-
http://www.moneysavingexpert.com/banking/graduate-bank-accounts

Derivative

jambosans wrote: »

Normally I would agree, but I think student accounts are the exception.

The terms & conditions may say the usual "repayable on demand" yada, yada, yada, but there are mitigating circumstances which make student overdrafts unique and (IMO) more in common with long-term borrowing. For example, student overdrafts are often disprapotionate to the student's income. Provided account conduct (i.e. funded with student loan or similar) is within normal "student" parameters, the bank are unlikely to withdraw the facility during study. When the student finishes their course, the overdraft will revert to an interest/ fee charging structure, and in the (perhaps naive) assumption the bank will assume more structured repayment of the debt whilst earning interest from the now employed graduate.

Indeed, this makes sense. I am under the impression that these overdrafts are offered only for two reasons:

Loyalty to the bank (ooh, they offered me 3k interest free, how nice)
Slap a 30% APR on after graduation

jonesMUFCforever

EdgEy wrote: »

Indeed, this makes sense. I am under the impression that these overdrafts are offered only for two reasons:

Loyalty to the bank (ooh, they offered me 3k interest free, how nice)
Slap a 30% APR on after graduation

Not in my experience - once graduated at least 2 more interest free years overdraft and low interest graduate loans.

Annisele

The 30% APR is a little bit after graduation - I reckon banks think brand new graduates are used to being poor and so will have a tight control on their finances, but after a year or so they'll not be so fussed

But for the OP - I agree with the suggestions to move to a graduate account with another bank. You can try appealing to Halifax, but (given that Halifax's terms say max 6 years) I think your time would be better used finding somewhere where you do fit within standard T&Cs.

casper_g

EdgEy wrote: »

Overdrafts are there for when you accidentally go over or 2 days before payday, not as a loan.

That may be the case, but "payday" for students may be a lot further away than the end of the month....