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Lloyds wants to cancel my account, are they allowed?

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    I am banking with lloyds I took a student account this year with the overdraft facility; however llyods wants to close the account because I haven't added any money just taken out my overdraft limit. I didn't know they could do that?
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    (Original post by Baconmonster)
    I am banking with lloyds I took a student account this year with the overdraft facility; however llyods wants to close the account because I haven't added any money just taken out my overdraft limit. I didn't know they could do that?
    Yes they can I'm afraid. The overdraft facility is normally offerred only on accounts that are 'in use' ie have money going in as well as out. The terms and conditions usually state that it must be your only student account too and hence they are expecting any grant money to go in there.

    If it is not yet closed and they are just saying you need to be using it correctly then if you can pay in a chunk of money they may leave it open.

    If you really want to use two accounts you need to spend a bit of time arranging to pay money in and out of them on a regular basis.

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    Most student bank accounts are given on the condition that your student finance is paid into them and it is your main bank account, usually with strict "£X.xx" amount must be paid in each month/term/year conditions.

    So, basically, the answer to your question is: yes, they can do that.
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    (Original post by Baconmonster)
    I am banking with lloyds I took a student account this year with the overdraft facility; however llyods wants to close the account because I haven't added any money just taken out my overdraft limit. I didn't know they could do that?
    If this is going to cause you major difficulty then contact them and try to make an arrangement to pay off your overdraft in instalments per month.

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    You should sort this out ASAP. If you are hit with large (10-20%) interest on an unofficial overdraft which will become unofficial if they close the account. You overdraft limit will no longer be just that. It will be: limit + massive interest + daily/monthly large charge + fees for bounced failed debits.

    I suggest you get a job fast and hold it down to pay the overdraft. Defaulting on an overdraft with tarnish your credit rating while a graduate.

    You are a classic case of a student mistake. Read the terms and conditions. Almost all credit obligations can be payable on demand UNLESS you remain inside their conditions. The bank probably thought - "He's run with our money, or he's moved it into high investment". When you take your money out of a bank and leave it dormant. You are effectively costing them money just to keep it open. They then get annoyed, and delete the account...

    Meh,

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Updated: May 5, 2012
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