UK Dom, Non-Resident wants a loan to pay off bank overdraft

Nusound

UK Dom, Non-Resident wants a loan to pay off Lloyds Bank £5k overdraft due to an increase in overdraft charges from 4th November 2017.
Can you help?
I have a retired client who now lives in Greece. She has her pensions paid to her UK bank account with Lloyds. This account has an agreed overdraft of £5,100 of which she is being charged £68pm. Apparently, on the 4th November Lloyds will increase their overdraft rate to £0.01 for every £7 overdrawn. This will mean the monthly overdraft charges will jump from £68pm to circa £221pm.
My client has tried to apply for a loan to clear the overdraft before November. Whilst on paper she is good for the loan, the bank won’t approve the loan because she is resident abroad. The bank has also said they won’t speak to her about the increase in overdraft charges until after the 4th November.
My client is in her 70’s and been with Lloyds since she was 18.
Can anyone recommend what my client should do?

tonycottee

When you say client, in what sense do you mean? And how much is her pension?

I wouldn't say that she was good for the money because a £5k overdraft is quite a hefty debt.

I think she will struggle to borrow money in the UK because:
1) If she takes out a loan for £5k, her total debt would be £10k
2) She would be a pain to chase for any defaults.

[Deleted User]

She won't get a UK loan.

Whether she can get one in Greece, I have no idea.

National_Debtline

Hi Nusound and welcome to MSE,


Taking out further credit to do debt consolidation can be tricky situation at the best of times, but if the applicant is resident abroad, I think it will be almost impossible. She could try seeking independent financial advice (she needs to be careful of costs) but realistically, I would suggest she changes bank accounts.


She should not bank with the same bank that this money is owed to. If she has another UK account, that has no debts, she should move her income and expenses there. If she doesn't have this then she may need to reconsider where her pension money is paid into. Don't forget that overdrafts are repayable on demand, so even if there was no issue with the interest/ charges on the debt, the bank could recover any money paid into the account and put it towards this debt.


If she can protect her income, she can then create a SOA and make an offer to repay this gradually and ask them to freeze the interest and charges. It is not without its own risks, but if the bank does not have direct access to her income, she will be in a better position. There is a lot more information about this in DFW and the different repayment options.


Laura
@natdebtline