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review of overdraft

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  • 16-02-2010 7:46pm
    #1
    mirror mirror
    Closed Accounts Posts: 363 ✭✭


    got a letter today saying my overdraft was being reviewed and to ring bank ..i rang bank and the person dealing with it said that they wanted to give a loan to clear overdraft . cutting a long story short im going in tomorrow but was wondering what the fcuk are they on about. has anyone else here had similar dealings ..any advice would be great:confused::confused:


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    #2
    sarahlulu
    Registered Users Posts: 295 ✭✭sarahlulu


    the rate of interest on a loan would be far lower than you are paying on your overdraft.


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    #3
    mirror mirror
    Closed Accounts Posts: 363 ✭✭mirror mirror


    ye i know what you mean,the overdraft limit is 4000,its usually 2000 in the red.we use it for the mortgage and general house bills...around 8-900 p.m....if they are making more off overdraft facility what are they on about a loan for. is it trying to do away with overdraft ?


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    #4
    mirror mirror
    Closed Accounts Posts: 363 ✭✭mirror mirror


    help


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    #5
    PCPhoto
    Registered Users Posts: 6,584 ✭✭✭PCPhoto


    at a guess they want you to have money in your account , cancel the overdraft

    the overdraft facility means that you can run into debt (legally) and they are trying to prevent you running up a debt that could potentially mean they may not get all their money.

    there are loads of people with overdraft facility who use it to survive until next payday - if any of these people get fired or payday doesnt come...the bank has a debt which the person may not be able to manage to pay off.


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    #6
    mirror mirror
    Closed Accounts Posts: 363 ✭✭mirror mirror


    so maybe lick some ass and try to get this guy to see things from my side ,negotiate something? suppose cant do any harm talking


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    #7
    KillerShamrock
    Registered Users Posts: 1,383 ✭✭✭KillerShamrock


    Are you constantly in the red? because you have to have a certain number of days in credit a year to maintain/keep an overdraft.
    This is probably why they are asking you to come in so the debt can be switched from an overdraft to a loan this way you will over time reduce the amount you owe the bank and at a lower interest rate they are perfectly entitled to do this! See if you can meet them half way by reducing you od to a smaller amount while using a loan to pay the rest off!


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    #8
    mirror mirror
    Closed Accounts Posts: 363 ✭✭mirror mirror


    thanks for that, i see where you are coming from.....ye the man on the phone sounded like a reasonable sort


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    #9
    jor el
    Closed Accounts Posts: 16,713 ✭✭✭✭jor el


    The bank bringing you in to clear the over draft might actually be a good thing for you. You're currently paying your mortgage (low interest) from an overdraft (high interest), which is crazy. If you're €2k-4k in an overdraft all, or a lot of, the time, then you should really take up this offer.

    From the bank's point of view, you're borrowing money from them to pay the other money you owe them, which is not good for them either.

    You should get out of it, but maybe try and keep a small (€300-500) overdraft for emergencies.


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    #10
    mirror mirror
    Closed Accounts Posts: 363 ✭✭mirror mirror


    met him today and he said exactly the same thing


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    #11
    jimoc
    Registered Users Posts: 634 ✭✭✭jimoc


    The terms and conditions of overdrafts usually have a condition in there somewhere that the account must be in credit for a minumum of 30 days in any 12 month period and if not the bank reserve the right to convert the overdraft amount to a personal loan.
    This is probably what happened here.
    As well as this, if the overdraft amount is more than can be cleared by one months incoming amounts, it also raises a red flag to the bank, since over a prolonged period you get further and further in there due to interest.


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    #12
    mirror mirror
    Closed Accounts Posts: 363 ✭✭mirror mirror


    since the end of september 09 its been 2500-3000 overdrawn. because im not working the same hours etc....i asked him if it was cleared by middle of march would i be able to keep a reduced overdraft ie 1000 euro,he was hesitant to say yes...more interested in sorting it out with a loan to clear overdraft.little **** hes only working there the past three months .


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    #13
    Hennybug
    Registered Users Posts: 492 ✭✭Hennybug


    I've heard that alot of banks are doing this now, converting overdrafts into loans therefore upping their figures on "new loans" to try and disprove that they're not lending!


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    #14
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,905 Admin ✭✭✭✭✭Toots


    mirror mirror wrote: »
    since the end of september 09 its been 2500-3000 overdrawn. because im not working the same hours etc....i asked him if it was cleared by middle of march would i be able to keep a reduced overdraft ie 1000 euro,he was hesitant to say yes...more interested in sorting it out with a loan to clear overdraft.
    I reckon the reason he's hesitant to say yes is because that decision doesn't rest with him, it's an underwriter who decides it. I'd imagine he doesn't want to tell you that you can have the €1000 overdraft, send up the application and have the underwriter come back and say it's a non runner. Also, seeing as they are having to restructure your existing overdraft they're probably reluctant to leave you with one in case 6 months down the line you're in the same position.

    Does it have to be €1000? Would you settle for a lower limit? I because I was in a similar position last summer, had a €2.5k overdraft, OH lost his job and we just couldn't clear it. I restructured the OD and our loan, part of the terms were that our OD had to be reduced to €100. Initially I was freaking out cos I thought we'd never be able to make ends meet, but it was the best thing we ever did. I know now that our overdraft will always be cleared at least once a month and it's a huge weight lifted off my shoulders
    little **** hes only working there the past three months .
    I understand you're frustrated by the situation but there's no need for this. Please do not use offensive language on thread.


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