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AIB overdraft converted to Personal Loan

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  • 16-06-2015 8:14pm
    #1
    madlad2013
    Registered Users Posts: 9 ✭


    For a number of years I had an overdraft on my current account €30,000. I rang and asked the bank for an overdraft of €3,000 however they gave me €30,000. A number of years ago I was asked to call into the bank about this overdraft and when I did so I was informed by a bank employee that my overdraft was ceasing and the balance was being converted to a personnal loan. I was told i did not have a choice. On reading the leading story in the independant today it got me thinking. I am wondering if i have a case for the ombudsman? Any advise would be greatly appreciated.


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    #2
    slimjimmc
    Registered Users Posts: 7,787 ✭✭✭slimjimmc


    Moved to Banking & Insurance & Pensions.


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    #3
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    You asked for €3k and they offered €30k in return. You were obviously happy enough with these as started using it I presume? You were aware you were going well over the €3k you initially wanted?

    In terms of them converting to personal loan this happens a lot. Its not a good financial decision to have €30k overdraft which has a higher interest rate. The bank are probably giving you the best option to have it as a personal loan and you could perhaps then get a smaller overdraft if needed. Overdrafts are repayable immediately on demand from the bank. This is in all their terms of the overdraft. This is not possible in most instances and often convert them to loans.


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    #4
    Peregrinus
    Registered Users Posts: 26,511 ✭✭✭✭Peregrinus


    What is your complaint? Is the personal loan costing your more? Why would you rather keep the facility as an overdraft rather than a personal loan?


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    #5
    dobsdave
    Closed Accounts Posts: 1,814 ✭✭✭dobsdave


    Peregrinus wrote: »
    What is your complaint? Is the personal loan costing your more? Why would you rather keep the facility as an overdraft rather than a personal loan?

    Because they are two different products maybe?


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    #6
    Peregrinus
    Registered Users Posts: 26,511 ✭✭✭✭Peregrinus


    dobsdave wrote: »
    Because they are two different products maybe?
    So? Unless the move to the second product was in some way disadvantageous, why would you be complaining about it?

    The OP doesn't actually tell us what the level of his indebtedness is, but it's clearly more than the 3,000 euros which, initially, was all he contemplated borrowing on overdraft. If it's signficantly more than that, it's quite possibly more than he could repay on demand, if asked. And, as long as he borrows on overdraft, the bank is entitled to ask him to repay it full, immediately, at any time, without notice. In other words, he may not be in a position to honour the terms of his overdraft, which would suggest that an overdraft isn't the right product for him. The move to a more structured product may well be to his benefit.

    He clearly thinks it isn't to his benefit, and asks if he has any grounds for complaining to the ombudsman. But unless he tells us why it's not to his benefit, it's pretty well impossible for us to hazard a guess as to how a complaint might progress. Hence my question.


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