HSBC want me to take managed loan...

greengrocer

Hi all

(This isn't actually my first post, I used to be called EveryPennyCounts but I can't seem to log in on that name. Anyway...)

I've been having financial problems recently, which has lead to me being over my £1500 overdraft limit by about £800. I have a graduate loan, also with HSBC, which has about £13k left on it, and a credit card with an 8k limit (which is maxed out). My mortgage is also with HSBC. I earn a decent wage, and have been managing to keep up with repayments. There have been a few months in the past (before the overdraft got this bad) in which I'd go over the limit by about £100-£200 just before payday, but then my salary would pay it off and bring me back into credit. The bank never charged me when this happened.

However, over the past couple of months or so, they have started charging me and this has pushed my overdraft up and up, and they've got stroppy. Now the recent saga:

They sent me a letter dated the 7th Nov telling me I was way over my overdraft, and telling me to phone the number on the letter. I did this, but was told I couldn't do anything over the phone and I'd had to go to the branch. I did this too, and they offered me a larger personal loan straight away, but of course I knew I wouldn't be accepted for one. They told me my only option was to go down the managed loan route. I didn't agree to it there and then, and I still don't like the idea, but said I'd speak to someone about it so the branch sent a memo to the ML dept. The ML dept never got in touch with me. So, I wrote a letter to the Credit centre in Salford (to M Bowden), explaining the situation. I offered two solutions with the offer of coming to some compromise should neither of them be acceptable:

1. either extend my overdraft by £1000 (to a total of £2500) but reduce it month by month by £100 until it was £0. Or
2. Take my balance as it stood (about -£2300) and put it in some other account which they could set up, and I'd pay that off at £100 per month. This would give me a balance of £0 but make sure I got to keep the salary that came in (which doesn't happen now, as £800 of it pays off the amount I'm over the overdraft, meaning I get charged when I go over it again).

The letter I sent to M Bowden was 14th Nov. I didn't receive a reply, and emailed internet banking to ask whether I would get one. They told me a reply was sent out on the 21st. None arrived. Last week I received a letter dated the 22nd which made no reference to my previous letter, and which told me to return my cards. I was puzzled by this, and emailed internet banking again to see what was going on. They reasoned this letter was an automated one that had crossed in the post, and would arrange for the original reply to be sent out to me again.

Now, today, which is pay day and when I'm no longer over my overdraft, I try to get money out and the cash machine keeps my card.

I went into the branch and the only thing they can do again is offer me a managed loan. Again. So they've sent a memo to the ML dept to get them to call me. Again.

I don't really want to do this as it would mean borrowing something like 24k when I only really need £1k to get me back on track. HSBC seem to have me over a barrel but its partly because they didn't respond to my original proposal, or because there has been a lack of communication somewhere. Of course, I know it's also because I went over my overdraft in the first place.

I don't really know what I'm expecting from other posters in relation to all this (and sorry for the long post) but I just wondered if I have to go down the managed loan route, or if you think I'd be mad to.

Thanks
Greens

Glitterari

Well M Bowden is notorious over on CAG - I wouldn't bother writing to him. And when I've sent emails to HSBC in the past, they don't get replied to or anything.

Have you thought about contacting payplan or CCCS (I think!) or maybe CAB.

As for the charges, get over to https://www.consumeractiongroup.com (CAG) and start reclaiming them.

I had a ML and it helped me personally, but I can see why you want to steer clear.

If you've not done one, how about letting us have a look at your SOA?

C xx

apples101

Could you please explain what a managed loan is?

petetidball

How will you end up with a 24k loan? When I graduated, I had a £700 unauthorised overdraft and a maxed out £500 credit card, both at HSBC. They wanted it all back the day I graduated, but obviously I couldn't afford it, so they offered me a managed loan. I took it, and I pay it off in full in February. It's been £21.45 a month since Feb 02. I figure thats repayments of £1287, meaning I've payed a whole £87 in interest (I'm sure someone cleverer than me can figure out the APR). Unless the product has changed, I can't see where your figures come from.

greengrocer

Because the loan would have to include the overdraft, the credit card and the personal loan, because under the terms of the loan they take all of these things off you. In total, that's just short of £24k.

Greens

greengrocer

apples101 wrote:

Could you please explain what a managed loan is?

It's a loan which is granted on the condition that they take all other borrow availability off you (remove overdraft facility and credit card) and take away the swtich card too, giving you just a solo card. The interest is something like 14% too, I've read, although that was on a forum somewhere so may not be right.

Greens.

duncans-mum_2

I may have misread your post and apologise now if I have, but, if it is just the overdraft problem you want to resolve, could you not open a bank account with another bank (even a basic one will do) and have your wages paid into that. This way you can pay off what you can on your overdraft, treat it as any other debt and clear it off. I don't know anything about managed loans I'm afraid, but I would be reluctant to enter into anything I wasn't comfortable with, without exploring all options.


Edit: Sorry have just re-read your post (shouldv'e done that in the first place) In hind sight, please ignore my post as it will not help if they keep charging you for your overdraft. But as stated above - look into reclaiming the charges.

Glitterari

BTW if you do opt for the ML, they don't necessarily take the switch card off you - I ended up keeping mine. They did ask for it but I said what am I going to do for money until solo card comes through and they agreed to let me hold onto it until the solo card came through and it never did, so I never handed it back. Even when my switch card expired, they sent me another switch card and I thought it would only be a solo. Just my experience peeps.

petetidball

Sorry, I didn't realise they'd include all the loans as well. Could you not find out the APR on the ML? You may find it's better than that on your graduate loan. It is a bit of a pain, and I got a solo card rather than a switch, and it's messed up my credit rating but it sorted the problem out and meant I knew the money would be payed back by X at £Y a month. And after you've taken it out, you can always reclaim the charges!

chocolatebutton

It does sound like time to contact CCCS or PayPlan (links at the top of this forum) to potentially save A LOT of money!

CLAPTON

firstly you need to address the basic issue of spending in relation to income....can you post a SoA


secondly, whether a managed loan is good for you depends upon the detail.
can you post the current debts...amount, monthly payment and APR, number of months left to pay,
and also the details of the proposed managed loan...amount, monthly repayment, how many months and APR

depending upon the above and subject to how good your credit rating is you might do better to get a 0% credit card or a LOB credit card or open a new bank a/c offering 0% overdraft for an introductory period.

at the moment it looks like your relationship with HSBC is starting to break down.