RBS cuts financial loan fees
Royal Bank of Scotland has announced that customers with overdraft accounts will now pay a reduced fee for any unauthorised loans they make by going overdrawn.
Cutting the amount from £30 a day to £15 a day, the bank has still been criticised by financial advice website moneysupermarket.com for maintaining such a high figure, which will not help those dealing with debt in the current economic conditions.
The site commented on the RBS's decision by saying over half of the UK workforce became overdrawn in the bank in the last year, having to rely on an unauthorised financial loan not catered for under their overdraft terms.
Some 17 per cent were continually overdrawn, meaning that they can rack up charges very quickly, rendering them unable to deal with their debt.
Ian Williams, director of communications at moneysupermarket.com, said: "Our advice is to avoid unauthorised overdrafts whenever possible - for most people this means a simple call to their bank.
"If you do continually go into the red then consider switching to a more competitive current account, such as one from Alliance & Leicester, which has a zero per cent interest rate for 12 months and will only charge 50p per day, maximum £5 per month thereafter on authorised borrowing," he added.
Young people looking to avoid such financial loan charges during their time at university may be interested in the new student account available with Lloyds TSB.
The product allows students to take advantage of an interest-free overdraft with tiered limits of £500, £1,000 and a maximum of £1,500 throughout the first year.
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