Llloyds tsb student account - approved overdraft charge of £5 per month or not

robnye

my daughter has opened a new student bank account with lloyds tsb.

we have noticed wording regarding an overdraft fee of £5 per mnth

can someone clarify whether is for planned or unplanned or both
i then found this on lloyds website
from lloyds website
'You will only pay this fee if you use a Planned Overdraft or Unplanned Overdraft
Overdraft by more than £10 at any time during your monthly billing period (even if your next
Usage Fee monthly billing period is only a few days away)
If you have an interest and fee-free Planned Overdraft limit that has been agreed
as part of your account you won’t pay the £5 fee if you stay within that limit or
exceed it by £10 or less'

why dont banks use simple english.........

as even on martins comparison it isnt clear.

my understanding is
if my daughter stays within her planned overdraft everything is free for the length of her course.
if she goes over the planned overdraft by £10 or less it is still free
if she goes over planned overdraft by more than £10 she will be charged interest on the figure above plus a monthly fee of £5


so am i reading this correctly?

atypical

robnye wrote: »

if my daughter stays within her planned overdraft everything is free for the length of her course.
if she goes over the planned overdraft by £10 or less it is still free
if she goes over planned overdraft by more than £10 she will be charged interest on the figure above plus a monthly fee of £5

Yep, that's right.

But with the student account they will also not charge the monthly fee on the first occasion in a 12 month period the account goes overdrawn by more than £10 over the agreed limit.

In other words they let you off the first time you go over £10 past your limit. If you're still over the limit in the next month they will begin charging, or if the person was to continue drawing money past their overdraft limit. It's explained here.

00Sblur

Thanks for confirming that atypical, as I was questioning that subject from Lloyds TSB too. One thing I noticed though, is that Lloyds can apparently request a user of the student account to pay everything that's within the overdraft limit back at any time. So for example, could I spend £1000 of my planned overdraft one day, then suddenly Lloyds TSB contacts me the next day telling me to pay it all back?

Also, if this is true, then is it common? How much chance do people with student accounts have of being asked to pay everything back, and how does the process work? (Time limit to pay it back, consequences, etc.)

Much appreciated!

whitfreak

Repayment on demand is a feature of all overdrafts, not just student-ones.

To my knowledge it is very rare for a student account overdraft to be withdrawn. A couple of my friends had thier graduate account overdrafts withdrawn, but they had basically maxed out their overdraft limit and then were doing thier every day banking elsewhere.

Somewhere in the small print it might give minimum activity levels. Basically you should not be at risk if your income (loans/whatever) is paid into that account, as from what I can tell banks thinking you've spent the money and done a runner is what gets them chasing you.

As to the process, my mate basically got a phonecall saying you have 24 hours to repay. As he had no money, I think he was able to come to some sort of repayment plan.

atypical

00Sblur wrote: »

Also, if this is true, then is it common? How much chance do people with student accounts have of being asked to pay everything back, and how does the process work? (Time limit to pay it back, consequences, etc.)

As whitfreak says above, it's unlikely to happen. The main reason is probably where the account isn't used.

And remember banks have a responsibility to treat customers fairly (I think it's something unique to finance). Asking for several thousand pounds of overdraft to be paid by the next day isn't fair.