Lloyds Bank Overdraft and Loan

Hi
I'm trying to sort out my Lloyds overdraft. All bar one direct debits have now been moved to a new bank and that account is up and running successfully.

The only direct debit left is the bank loan. I've read where people have got into problems cancelling this direct debit so have left it alone for now. However now there is hardly any money left in the overdraft anyway so I am now putting together the holding letter regarding the overdraft.

These are the last two debts for me to try and tackle in setting up my dmp. ( The delay on these has been partly due to my wages not being transferred into the new account when I had asked them to be and so I had to delay another month but now that is sorted. Also I had a direct debit which also wasn't change over when I needed it to be and that caused a delay too.)

So I have put together a letter regarding the overdraft saying there is not much left in there and the daily charges of approx £3.77 (£2630 approx outstanding today) are fast taking me towards the limit. I am asking them to freeze interest and charges and saying I am setting up a dmp.

Should I then mention the loan in this letter too or do it separately as from what I have read on here, they will take the amount for the loan anyway which will take me beyond the overdraft in any event.

Or should I try and cancel the loan and risk the wrath of Lloyds. I'm just not sure how to play this part as the two are connected and I don't want to aggravate things any more than necessary.

Thanks

Comments

  • National_Debtline
    National_Debtline Posts: 7,998
    First Post First Anniversary Combo Breaker
    Organisation Representative
    Hi there,


    Banks can use something called their 'right of set off' in taking money from an account you hold with them, towards a debt that you owe to them and this can sometimes cause confusion in the early stages. Now your new account is up and running you can send a hold action letter to get 30days breathing space to complete your SOA. Or if you are happy with the SOA you can start negotiations straight away.


    Standard negotiation letters would ask the creditor to freeze interest and charges. When you negotiate it is important that all of your debts are receiving a proportional offer to repay (irrespective of what order they were written too). So, if all of your debts are non priority debts, you would divide the surplus proportionately so each debt gets a fair percentage based on what you have available and what you owe. If that means you need to amend some arrangements already in place, then you should do so, to ensure that you are being fair.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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