In desperate need of some advice - Switching and Overdrafts

Sjd1992

Hi all,
This may be in the wrong place, so please feel free to move, but I'm just after a bit of advice and the best way to go around my situation
I have just completed a bank switch from Natwest to Monzo - and I was given the impression by Natwest that I could gradually pay off my overdraft month by month to clear, however yesterday I received an email saying they wanted the full balance by 27/01. I've just got off the phone to them and spoke to their switching team in which they said that the date stands, and any balance after that will be handed to collections to set up a payment plan to pay the overdraft off. I don't know if there will be any interest and cost to this - so I just wanted advice on whether I would perhaps be better off either waiting and dealing with Natwest and setting up a payment plan with them (not knowing fees etc) or applying for a money transfer credit card which I've checked and been approved for, as its quite a big overdraft, it could take me a good 3-4 months to pay off after bills etc.
any advice would be gratefully received!

Thanks

etienneg

I've no idea how you got the idea you could continue with an overdraft after switching your current account. An overdraft is a negative balance on a current account. By switching you have closed your current account at Natwest, so there's nothing left to have a negative balance. So Natwest want paying pack imminently - no surprise there.

Going with the collections route will cost you, not least in terms of bad entries on your credit files. It will be treated like any other debt that you fail to pay on time. Setting up a payment plan doesn't avoid the default, so you will suffer the consequences.

If you have an alternative, take it. However, as regards the money transfer card, again you seem to have misunderstood. You cannot have been approved for this without making an application. Maybe you mean "pre-approved". This doesn't mean you have been approved before applying. It simply means they don't know at the moment of a reason to decline you - in other words, you have been approved as far as they can tell at the pre-application stage. When you think of it like this, you can see that it means very little. So by all means try this route, but don't be surprised if you are declined.

Retiredwelshman

I would be surprised if the switch went ahead to be honest. If you cannot repay the overdraft will stay open (until closed by their collections) but this might impact your credit files adversely.
Can you not get one side to stop the switch?

You could still open the account with Monzo.

Thrugelmir

Overdrafts are repayable on demand. Arrangement to pay will impact your credit history. 

[Deleted User]

Money transfer card or some other loan - you save on the APR too.

Bit late now but easier to manually transfer to Monzo and keep old account as a backup.
They would have probably cancelled the overdraft with no regular income but not immediately. 

Sjd1992

Thank you all for the advice - it is appreciated - I will try with the money transfer - I work and I probably earn enough to pay it off. Natwest told me on the phone I could clear it monthly, distinctly had a chat with someone from their borrowing team who obviously gave me some rubbish advice

Thanks

Fighter1986

Natwest giving rubbish advice? Never. We never ever have reports of that round here...

You were indeed given rubbish advice, overdrafts are repayable on demand and the expectation of transferring an account using the switching service when overdrawn is that the receiving bank will have offered you sufficient overdraft to cover the overdrawn balance.

If that's not the case it is the account holders responsibility to clear the overdrawn balance prior to the swithc date.

Agreeing a repayment plan with Natwest for this would have likely negatively affected your credit rating, possibly quite severely.

You've done the right thing in obtaining a money transfer credit card, it's by far the best option. Good work. 

[Deleted User]

Sjd1992 said:

Thank you all for the advice - it is appreciated - I will try with the money transfer - I work and I probably earn enough to pay it off. Natwest told me on the phone I could clear it monthly, distinctly had a chat with someone from their borrowing team who obviously gave me some rubbish advice

Thanks

I would lodge a formal complaint with NatWest as they shouldn't be giving out materially incorrect advice.
Obviously, don't count on anything great resulting and continue on your current path.