Overdraft Removal

kyleda86

Hi,

I received a letter from Lloyds TSB informing me my overdraft is being taken away because I haven't put any money in the account for 2 months. After speaking to them they tried to convince me to take out a loan to repay the overdraft.

I have 2 accounts, one which my wages get paid into and the Lloyds which my student finance was paid into (up until December)

What can I do about this? I can't afford to pay back this amount at the moment, as with the point of an overdraft.

Thanks,
K

thatsean

I'd take their offer of the loan then, either that or see if there's another way to come up with the money

Ben8282

kyleda86 wrote: »

Hi,

I received a letter from Lloyds TSB informing me my overdraft is being taken away because I haven't put any money in the account for 2 months. After speaking to them they tried to convince me to take out a loan to repay the overdraft.

I have 2 accounts, one which my wages get paid into and the Lloyds which my student finance was paid into (up until December)

What can I do about this? I can't afford to pay back this amount at the moment, as with the point of an overdraft.

Thanks,
K

What has happened here is quite normal and to be expected. When Lloyds/TSB granted you the overdraft facility in would have been on the basis of what was currently being paid into the account. Not only has the amount paid into the account been lower than normal over the last 2 months, it has been nil. This would be enough to ring alarm bills on any overdrawn account.

One idea would be to have your wages paid into the Lloyds/TSB account. That would probably solve the probem. Explain you were being paid in cash for the last 2 months or something but now you have arranged for your wages to be paid into your account and see how they repond. They may delay the cancellation of the overdraft and reconsider the situation when they start to receive your wages.

One thing you can be sure of though. You will not be allowed to maintain an overdraft on any account that you don't regularly pay money into. I believe Lloyds/TSB usually link the overdraft facility to the regular income into the account so that, in theory at least, it gets paid off each month. Make sure you pay in every month at least the overdraft limit.

Another idea would be to try to get an overdraft (or bigger overdraft) from the bank whose account you have your wages paid into. They may be able to help.

Lloyds/TSB staff often to try to get you to take out a loan. It's normal for them; I'm sure they are incentivised towards loans.

However, if there is no other a solution and they are offering the loan, then it might not be a bad idea to accept it as that way you know the amount will eventually be paid off. Take the loan over a reasonable period; don't let them sell you 84 months or something.

Remember that a loan, unlike an overdraft, is not repayable on demand and therefore, so long as you don't default on your payments, the loan can't be taken away from you just because they feel like it so you will know where you stand.