Forced to get a loan

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Lesgus
Lesgus Posts: 3 Newbie
edited 22 April 2018 at 11:05AM in Loans
Hi,

I'm not sure if this is standard practice or not. When me and my partner graduated from university in 2008 we both had student overdrafts with different banks. My bank let me keep the overdraft and pay it off over time, although they did change some terms after a year as I was no longer a student.
My partners bank (Halifax) told her she had to get a loan to pay it off unless she could repay the whole the thing. Basically she was forced into getting a loan with no other option as we couldn't raise £2'000 on the spot.
The more I think about this the more it doesn't seem right.
Is this standard practice for some banks, to demand full repayment of the overdraft after 12 months of graduating?

Thanks

Lesgus

Comments

  • BrassicWoman
    BrassicWoman Posts: 3,202 Forumite
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    Overdrafts are repayable on demand. An undergraduate overdraft is for students, so expecting repayment after a year of employment also seems fair.
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  • maninthestreet
    maninthestreet Posts: 16,127 Forumite
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    Maybe the loan worked out cheaper than an overdraft??
    "You were only supposed to blow the bl**dy doors off!!"
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
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    A bank can demand repayment of an overdraft at any time.

    Loans are often much cheaper than overdrafts anyway.

    "Bank in suggesting less profitable product for themselves scandal"
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    maninthestreet wrote: »
    Maybe the loan worked out cheaper than an overdraft??

    It definitely would have been - I remember that Graduate loans were dirt cheap back in the day compared to 20% + on current account overdrafts once your student overdraft terms had expired.
  • sourcrates
    sourcrates Posts: 28,878 Ambassador
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    edited 22 April 2018 at 4:47PM
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    She would not of been forced into anything, if what the bank was offering was unaffordable, or unwanted, she always had the option of defaulting on the agreement.

    Overdraughts are always repayable on demand, so the loan was probably her best choice.
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  • Lesgus
    Lesgus Posts: 3 Newbie
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    Thanks,

    It was a long time ago, I didn't realise her loan may have been better.
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