Student Overdraft Gone Badly Wrong!

[amoreo]

Hello, nice site!

 

I wanted to ask you guys for some help, I've just moved house and wanted to extend my overdraft so I went in to see the folks at Natwest in my local branch.

 

I wasn't allowed to extend my overdraft due to it being 'dormant', I was unaware you had to put money in within every six days or what not to keep it active, and treated it (foolishly in retrospect) as a loan of £1250 that I spent in the first year of study and snapped the card then and there.

 

Having moved frequently, I have had no correspondence with Natwest for around a year and a half (maybe a little shy of 2 years), so it came as quite a shock when they told me the money was now being handled by

 

'EXTERNAL DEBT COLLECTORS'

 

These three words brought fear to my soul, as I instantly imagined my house being raided by Ross Kemp lookalikes at any minute. So...

 

1. Why is it being handled by aforementioned debt collectors? The woman asked if I was still in education, which I am, going into a 3rd year, which is an optional top-up and therefore maybe some confusion arose as to my deadline of payment?

 

2. What charges/fees am I facing over a period of 18+ months?

 

3. Being a student and having moved house I have precisely £0 at the moment, but am anticipating another year of student loan through in September - what kind of repayment scheme will they allow me? Will I have to pay back the entire 1250 by a certain date or is there some kind of monthly rate of repayment (and how small can I get this to go?)

 

4. In the meantime, whilst I need to pay money for a deposit, what is the most forgiving loan for a student in my position? (throughout all banks)

 

Many thanks for any and all help offered, one thing growing up has taught me is that childhood was seriously underrated when I was young!!

[yourbank]

Hello, nice site!

 

I wanted to ask you guys for some help, I've just moved house and wanted to extend my overdraft so I went in to see the folks at Natwest in my local branch.

Excellent this is where I do know my stuff very well.

Let's go back a step. You opened the student account, right? You used it as your main account, right? Student loan goes into it?

I wasn't allowed to extend my overdraft due to it being 'dormant', I was unaware you had to put money in within every six days or what not to keep it active, and treated it (foolishly in retrospect) as a loan of £1250 that I spent in the first year of study and snapped the card then and there.

Explain this bit, dormant would be 180 days or 6 months. Where was student loan going?

Having moved frequently, I have had no correspondence with Natwest for around a year and a half (maybe a little shy of 2 years), so it came as quite a shock when they told me the money was now being handled by

Was your address correct?

'EXTERNAL DEBT COLLECTORS'

 

These three words brought fear to my soul, as I instantly imagined my house being raided by Ross Kemp lookalikes at any minute. So...

Who were they from?

1. Why is it being handled by aforementioned debt collectors? The woman asked if I was still in education, which I am, going into a 3rd year, which is an optional top-up and therefore maybe some confusion arose as to my deadline of payment?

Not sure this is relevant really

2. What charges/fees am I facing over a period of 18+ months?

you what?

3. Being a student and having moved house I have precisely £0 at the moment, but am anticipating another year of student loan through in September - what kind of repayment scheme will they allow me? Will I have to pay back the entire 1250 by a certain date or is there some kind of monthly rate of repayment (and how small can I get this to go?)

Can you clarify stuff before external debt collectors bit.

 

4. In the meantime, whilst I need to pay money for a deposit, what is the most forgiving loan for a student in my position? (throughout all banks)

 

Many thanks for any and all help offered, one thing growing up has taught me is that childhood was seriously underrated when I was young!!

 

Can you clarify the bit before external debt collectors cos I work in student banking branches for 8 years up to Feb 2009.

[amoreo]

Sorry! To clarify...

 

- I was unaware that I had to keep the account as a main account and therefore it went inactive for 18 months, I have an account with nationwide which deals with all of my current finance, student loan, job payments etc, my Natwest student account was used specifically for the overdraft (which I have later realised needed to have money going into it as opposed to being treated like a loan.

 

- My address was not correct as after frequent moves, I failed to send a notification of moving.

 

I can see I've made a huge error with it, but I was ill-informed and no-one rectified my perception of overdraft as a short term loan with no interest until education was complete.

[Rhinoagainstcharges]

Firstly I think you should briefly look at this from the Banks point of view. You have a loan/overdraft from them and then for 18 months they get no contact from you and no monies into the account. They are bound to think the loan has gone bad and hence pass it on to debt collectors. When you then appear asking for more money they are hardly going to be overjoyed and agree. However, from your post it is clear you had a different viewpoint. What I would do now is contact the debt collectors to discuss the matter. As until now it is unlikely they could even trace you it is likely they will be agreeable to almost any repayment proposals you put forward.

[rickyd]

RBS and Natwest have a condition attached to their student accounts which requires it to be your main account. move away from them and it ceases to benefit from the student features, which are reasonably generous. This is primarily to prevent people from opening accounts with several banks and getting student freebies and discounts from all of them.

 

As Yourbank states your student loan should be going into the account, then it wouldn't be dormant. and Rhino's thinking mirrors my own - from the bank's veiwpoint you could have emigrated or died by now.

 

You have a clear choice to make here, either repay the outstanding balance (from your Nationwide account perhaps) and ask to reinstate the student status on your Natwest account. The bank may not agree given what's happened so you'll need to be prepared to do some explaining; Or ask Nationwide for the overdraft increase you need, but you'll still need to repay NatWest.

 

Rhino's right about te debt collectors, make their job easy and they'll be deighted to speak to you.

[yourbank]

Sorry! To clarify...

 

- I was unaware that I had to keep the account as a main account and therefore it went inactive for 18 months, I have an account with nationwide which deals with all of my current finance, student loan, job payments etc, my Natwest student account was used specifically for the overdraft (which I have later realised needed to have money going into it as opposed to being treated like a loan.

 

- My address was not correct as after frequent moves, I failed to send a notification of moving.

 

I can see I've made a huge error with it, but I was ill-informed and no-one rectified my perception of overdraft as a short term loan with no interest until education was complete.

 

Apologies to Rhino and Rickyd but you guys can continue with your tete a tete

 

What you need to do is to request copies of the account because no doubt there maybe one or two charges that you can reclaim albeit there is the overdraft that you cannot. I would then perhaps agree to what you can afford to repay the overdraft even if that is £10 a month explaining the fact you are a student still and have very limited income at the moment.

[amoreo]

Thanks for the help, guys. I'll contact them and let you know the results!

 

I will probably be back on to discuss any charges that I can appeal against.

 

Thanks again!

Edited July 30, 2009 by amoreo