O/d interest rates

[anzani]

Its all about sheltering those people who use unauthorised overdrafts. They were paying penalty rates , but it has been decreed that this is unfair to them.
so the pain of there poor housekeeping is to be felt by all. The reason being , these people are very likely to completely fail to repay, which is why they get penalty rates.
the only way round is to negotiate a loan to cover the complete borrowing requirement, amd kerp it in your current account.

Many small businesses just go on year by year, not really working their assets hard, taking what they are offered and treating their suppliers as 'friends'.
Banks are not your friend.
Each of you will know your requirement, be it working capital, bridging finance or 'safety net'. Just shop it around and get the best (better?) deal that you can
Many would do very well to visit their sheds and nettles, sort the scrap and weigh it in.

 

[Exfarmer]

Seems to me all its going to do is stifle growth. I do think banks are pushing for people to take out long term loans rather than use overdrafts which is a pain for folks dipping in and out of overdrafts for short periods.

It is absolutely crazy, they are penalising a large number of honest careful people for the feckless behaviour of others all in the name of fairness.

 

[Werzle]

Dont remortgage with Barclays! They will demand it back within 18 months.

Sounds mad. Why would a bank call a loan in if you were making the payments without fail, and they had your deeds which they had deemed valuable enough to more than cover your loan?

 

[Grassman]

If this is brought in across the board for business overdrafts it will completely change business in the uk.
Perhaps the banks will come up with an overdraft in a different name. We have a loan for £50k but only pay the interest on any money borrowed

 

[jendan]

Sounds mad. Why would a bank call a loan in if you were making the payments without fail, and they had your deeds which they had deemed valuable enough to more than cover your loan?

"Business Support" manager, works above your ordinary bank manager.They can and will do this to people!...........even with no defaults and no missed payments.

 

[Werzle]

It is absolutely crazy, they are penalising a large number of honest careful people for the feckless behaviour of others all in the name of fairness.

Same as insurance, those that pay it are subbing those that dont.

 

[bobajob]

Meeting our banker on Thursday(Clydesdale Bank)-anyone with recent experience of their attitude or rates going forward?
Have up until now been fair/reasonable to work with.

Rbs, 2% over base.

 

[Exfarmer]

The problem the banks face, is being seen to be equal to all. In todays world, if it seems they are treating one group Les equal, they can expect massive fines.
those of us trying to build a business pay for the feckless

 

[Werzle]

No just rang them the lady said it’s 6.20 %plus base until May then 10.85% she said it’s the same for all o/d .Total bloody rip off as a Rate was 2%.So do they want rid of O/ds ,rid of smallO/d s or what.Anyone had a letter from another bank doing the same.Told her it was a joke seeing as the tax payer bailed them out.

This is only for people with an overdraft of £25000 or lower.

 

[Still Farming]

Very small od secured ,has anyone else had the bomb shell of lloyds going to charge 10.85% from May.

More like nearly 40%.
And that is authorised overdrafts?
Other threads on this too.

 

[aangus]

Meeting our banker on Thursday(Clydesdale Bank)-anyone with recent experience of their attitude or rates going forward?
Have up until now been fair/reasonable to work with.

Had my review back in July and that went well no surprises, would be interested to hear how you get on

 

[Hindsight]

This is only for people with an overdraft of £25000 or lower.

I think it is mainly targeted at the non business personal lending for individuals that run an overdraft, probably quite small. With the introduction of fees for university education there is quite a cohort of younger people who have had to borrow at a relatively early time in their life and continue to do so after graduation. These are not business people and sums are usually not large; but given their income profile and that they are often employed in low paid work, and increasingly in the gig economy are on short contract, they cannot repay the sum or service the debt. I am aware of a few from my children's friends. Normal youngsters from hard working normal families who do not have ready cash - yes they may own a house but not ready cash.

 

[matthew]

I think it is mainly targeted at the non business personal lending for individuals that run an overdraft, probably quite small. With the introduction of fees for university education there is quite a cohort of younger people who have had to borrow at a relatively early time in their life and continue to do so after graduation. These are not business people and sums are usually not large; but given their income profile and that they are often employed in low paid work, and increasingly in the gig economy are on short contract, they cannot repay the sum or service the debt. I am aware of a few from my children's friends. Normal youngsters from hard working normal families who do not have ready cash - yes they may own a house but not ready cash.

Nope. It's any business.
We have run o/d facilities for decades. Never defaulted and had a good rate. That has increased, as has the 'arrangement fee'. As said, this year the fee is set to increase, and the amount over base has gone from 1% through 2.5% to 5.8% and apparently to 10% over base.
I queried it (as did friend in the same position) and we were both given the same hymn book answer. Streamlining all o/d to the same rate.

so regardless of past business history, and ability to manage an o/d, and regardless of time of credit with the same bank, with no interest paid on deposited money, we are all bundled together.

Friend runs 600 head of fattening cattle and about the same number of sheep. We are not as big as that, but a substantial business.

Both of us have cancelled o/d facilities with Lloyds.

 

[Jon 3085]

11.6% interest certainly focuses the mind ?.

 

[SilliamWhale]

My bank manager has informed me it applys to private o/d arrangements and not commercial arrangements.

 

[Jon 3085]

My bank manager has informed me it applys to private o/d arrangements and not commercial arrangements.

Not what they told us,It was take it or leave it!.

 

[SilliamWhale]

Not what they told us,It was take it or leave it!.

You either don't borrow enough on o/d or you don't have a commercial deal or you need to speak to ag manager. Put it this way if you think it is unjust and it is a business account and you feel you need the o/d then I'd be getting to a meeting with a bank asap.

It would be a right ballache for ag managers to start having to turn all their overdrafts into loans so I doubt its going to apply

 

[Goweresque]

My bank manager has informed me it applys to private o/d arrangements and not commercial arrangements.

If thats the case one wonders if some people have been using private bank accounts as business ones, and thats why they're caught up in it?

 

[Hilly]

Mine told me ages ago Overdraft would be 10% , or could take 5 year flexible loan fir very low rate can be paid off anytime , seem mental just money lending regardless of name . 500 quid to set up loan mind .

 

[Lawless]

Can someone put some numbers to the size of these overdrafts that have had large interest hikes.
Are we talking 500k,400k,300k,150k or small ones below 50k? Is there any pattern?