HSBC overdraft help?

kelly_2009

Hi,

I have an overdraft with HSBC with a limit of £700 and the balance is £650 overdrawn. I dont want to use this overdraft facility anymore and i want to close the account. If i contact them and explain my intentions will i be able to set up some sort of repayment plan, if so any idea roughly how much per month? Or are they more likely to demand the outstanding balance in full?

Many thanks

Gromitt

They can demand the outstanding balance in full at any time. Best bet is to simply clear the debt and then cancel the overdraft and account once you have done so.

They are unlikely to setup a payment plan unless you default.

casper_g

If you don't want to use the account any more, then stop taking money out of it/making payments from it. There's no need to involve them in deciding on any repayment plan though, as far as I can see. Talking to them about a repayment plan might possibly make them more likely to demand repayment. Just work out how much you can pay off each month and pay the money into the account as usual!

kelly_2009

Thanks guys, casper_g that is the way i would like to deal with it but if i stop paying wages into that account and just pay (eg. £50 a month) wont they demand the total amount as they might consider it a risk?

izools

kelly_2009 wrote: »

Thanks guys, casper_g that is the way i would like to deal with it but if i stop paying wages into that account and just pay (eg. £50 a month) wont they demand the total amount as they might consider it a risk?

The other option then is to continue using it as your main account (which I assume you are now?) and reduce the overdraft limit by as much as you can afford to each and every payday.

Then once the overdraft limit is at £0 you can close the account and move, if you so wish.

You can't close the account under any circumstances unless the balance is £0.

GlamGirlie

They would suggest you convert it to a loan under normal circumstances, but I think their minimum for a loan is £1k or possibly even £2k.

Therefore I would recommend you simply use it to a lesser balance each month, thus seeing it paid off.

You are quite correct; if you simply stop using it they will demand full and immediate repayment, as is their right.

Sharon87

Whatever you do, don't reduce the overdraft limit every month. HSBC have this funny thing where if you ask for a change in overdraft or go over your limit twice within 6 months, they charge you £25 for the privilege. Unless anything's changed since I last looked, then that still stands.

I would suggest still get your wages paid in and transfer all but the amount you want to pay off each month into a separate account. HSBC want to see the account is still active (has £500 a month going into) and if payments stop to this account they will cancel your overdraft at next review date and you may get defaults if you can't pay it off.

Alternatively if you have a good credit rating get a 0% balance transfer credit card that can do money transfers like MBNA, I got a Virgin one to pay off my HSBC £1300 overdraft. It's 0% for 20 months.