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Overdraft arrangement fee

Started by Dozer

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  • #869859

     
    Dozer
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    Our overdraft was up for review last month.  We had the bank manager visit us, accompanied by the banks insurance salesman, and everything went well.  The following week the insurance man called on us again but we were not buying.  Now checked the online statement and we have been charged 1.5% arrangement fee!  When we first moved to the bank three years ago the arrangement fee was zero, then it was 1% and now 1.5%.  They cant loose.  Massive security held and able to take our money as and when they see fit. 

    #869860

     
    peesie
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    Yes.And you have to pay the fee up front,whether or not you use the facility.Its worth checking to see if it would be better to take out a term loan for the amount of your peak borrowing,even if it means having money sitting in your current account for part of the year while paying interest on the loan.

  • #869861

     
    mursalmursal
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     Change your bank?

    You have another bank signed up as a plan B? If not do the necessary paperwork before you need it, then when the overdraft comes round again, haggle. Or split it between 2 or 3.

    I cant understand why people stay loyal to one lending institution.

    Didn’t even know bank managers did house calls, must leave the dog out, just in case.

     

    #869862

     
    old mcdonald
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    mursal, Very strange that this thread should appear. I have just finished dinner. Whilst my wife was washing the dishes, my mother in law and I were discussing, over a final glass of Moscatel, this very subject of bank managers visiting. I have always expected my bank manager to visit if he wanted to know anything about my business. After all, I am the customer. If some business is interested in lending me money then it needs to know about my business, and the only way to do that is to come and have a look at it. In whichever country I have lived I have had the bank manager visit when I needed to borrow money. Sometimes it has been by way of overdraft and sometimes as a mortgage. Either way, a prudent lender should check out what he is lending against. Perhaps this is why so many banks have run into trouble. Nobody has bothered to check where, and against what, they are lending.

    #869863

     
    TeslaCoilsTeslaCoils
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    mursal

    I cant understand why people stay loyal to one lending institution.

     

    Ditto insuring institution. 

    Given the potential for enormous banking catastrophe, and huge crop prices, I would be considering ways of making any overdraft vastly smaller, or swapping it for something that cannot be “called in”. The poop hasnt even got close to the fan yet. Bank runs in Spain – its not like cash in the bank is earning anything. Bad times ahead. Bad. Bad. Bad. 

    #869864

     
    glasshouseglasshouse
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    if a farmer spends all his time inside the house , playing internet poker or away on holiday. and forgets to sow his crops, he will be burst pretty quick. you cant neglect your core business.

    This is what the banks have been doing, playing poker against the value of our mortgages. They have neglected the basics, and expect us now to pay for their mistakes.

    #869865

     
    welshnwillingwelshnwilling
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    glasshouse

    if a farmer spends all his time inside the house , playing internet poker or away on holiday. and forgets to sow his crops, he will be burst pretty quick. you cant neglect your core business.

    This is probably why our bank regularly sends out one of it’s Agri managers to do an annual review. It’s so much more than just a paper excersise when they can see for themselves what’s actually going down on the farm. A bank manager once told me how he had gone out to a farm to see how their barn conversion was getting on. He found the barn hadn’t been started and the money spent on a new Range Rover. Needless to say, the farmers overdraft was called in on the spot and rightly so.

    #869900

     
    welshnwillingwelshnwilling
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    mursal

    I cant understand why people stay loyal to one lending institution.

    If you have received good service from a bank over the years then I can’t see a problem with being loyal to them. Besides, changing banks would be such a hassle. You wouldn’t want to bother unless you had to surely?

    #869901

     
    TeslaCoilsTeslaCoils
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    “Good service over the years” doesnt seem the case if the fee has gone from zero, to 1% to 1.5% over three years.

    #869902

     
    welshnwillingwelshnwilling
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    No, but it’s understandable with base rates at 0.5% that the bank has to cover costs somehow. They are after all in business just like us farmers.

    I’m not here to defend the banks, but I can’t complain about ours fortunately. Perhaps that’s more down to local staff than company policy though.

    #869903

     
    bankruptbankrupt
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                the bank has to cover costs somehow

     

    Fair enough, welshnwilling, but arrangement fees have to be considered in conjunction with lending margins.

    A farmer acquaintance of mine told me the other day that his latest arrangement fee is 50, enormously far less than recently charged to me.

    He later happened to mention in passing, however, that his IR is now 9.9% over base, having risen in four or five stages from 2% over base back in 2007.

    #869904

     
    welshnwillingwelshnwilling
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    bankrupt

                the bank has to cover costs somehow

    Fair enough, welshnwilling, but arrangement fees have to be considered in conjunction with lending margins.

    A farmer acquaintance of mine told me the other day that his latest arrangement fee is 50, enormously far less than recently charged to me.

    He later happened to mention in passing, however, that his IR is now 9.9% over base, have risen in four or five stages from 2% over base back in 2007.

    Yes well that is taking the p**s ! It’s up to us all to negotiate for our selves and if you feel that the bank is in fact taking liberties then perhaps a change of bank is the only answer. I wonder if your friend asked for quotes from other banks ?

    #869905

     
    Dozer
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    We did move banks for the purpose of cheaper money.  Trouble is a year or two down the line the higher fees come creeping back.  Last year our bank manager gave us the speel about  thier margins being tight in order to justify a rise in the overdraft interest rate.  Our rate is 2.3% over base it was 1% over base when they were fishing for the business.  Our bank, the one with the black horse, was bailed out by all of us just 3 years ago.  Like I said, they can’t loose.

    #869906

     
    henararhenarar
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    We dont have an overdraft so dont pay any fees[:D] I have worked for myself since I left school at 15 and havent bought anything that I couldnt pay for.This may well change one day but I hope not.

    I use to run my contracting and dealing business on a private acount so didnt pay any charges at all in fact I use to get some interest on it, they had a go at me once about it I told them I could take my business down the road if thats what they wanted and they never said any moor

    #869866

     
    old mcdonald
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    TeslaCoils

    Given the potential for enormous banking catastrophe, and huge crop prices, I would be considering ways of making any overdraft vastly smaller, or swapping it for something that cannot be “called in”. The poop hasnt even got close to the fan yet. Bank runs in Spain – its not like cash in the bank is earning anything. Bad times ahead. Bad. Bad. Bad.

     

    Now Tesla is not known for scaremongering and I have a horrible feeling he might be spot on here. I think my 10 bet that the banks will not be seeking another bailout before next February is safe, and if they need more cash then the borrowers whose loans can be called in will be the frirst to suffer.

    In the UK I began using an insurance broker I knew in 1962 (they do the shopping around) and I have continued to use the same small firm whenever I have had a need to insure anything in the UK. It was not common to be insured with the same company in consecutive years. Either use a broker or get alternative quotes yourself – your original company will find ways of reducing the premiums if they know you are looking elsewhere.

    It is a hassle to change banks, bu I am on my fourth in 9 years in Portugal, the first went because of excess charges – emptied an almost inactive account with 115 in it with two half year charges; the second because of a failure to make any decision on a temporary facility for a new business venture (soap making from excess olive oil) and the third, Barclays, because they were not honest with me. I was assured there would be no charges on a current account if there was a positive balance in it. After a few months they began to slap on a 20 monthly charge – without prior notification.

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