'Affordability' argument from banks

BRITGUY

I know there has been lots of threads re banks not being able to trust applicants for consolidation loans, in case they blow the money rather than applying it against the other loans, but surely that shouldnt be the case where you are trying to consolidate borrowing at the same bank? eg I have 2 current accounts at halifax, one with £1,000 overdraft (cost £1 a day), one with a £3,000 overdaft (cost £3 a day). But they are saying I fail the affordability test to merge the 2 accounts into one with a £4,000 overdraft (which would still cost £3 a day). Seems to me I fail the £30 a month 'more income for them' test rather than the 'affordability' test

CKhalvashi

However when one OD is removed, the other will be applied for; this is how any credit works.

If you were to pay the first off, then work on the second, is the cheapest way to do this.

If it's better to get the £3000 down to the £2 a day option first, then this is my advice.

CK

PeacefulWaters

Maybe their real concern (or rather the computer programme that makes the lending decision's concern) is that your debt will just rise again.

imoneyop

Rather than trying to save yourself £30 a month, a better idea might be to look at why you are living in a £4000 overdraft and take action to sort the problem.

You would be better off visiting the Debt Free Wannabee board for advice on cutting your outgoings so that you can get the ODs down.

BRITGUY

I'm not debating the overall situation - my point is that the affordability argument makes no logical sense in the circumstances, where the same bank can control access to both accounts (and saving £360 a year on OD fees isn't a bad start in cutting down an overdraft).

imoneyop

Your only real option is to offiically complain to them that they are making the decision based on their profit rather than affordability and then if that fails go to the FOS with it.

But if you want to take that action, be aware that overdrafts are repayable on demand, so they could decide at any time to reduce or remove the facility and you will then end up with an unauthorised overdraft and be paying a fiver a day.

CLAPTON

In general, banks often do often take a different view of consolidating debts within their own bank into a single loan (and removing ODs and CCs as appropriate.












However they apply different criteria (risk) to different types of debt which also influences their decisions.
Logically they should simply reduce your OD month on month to reduce their exposure.