My question is why are you in the FULL recovery model in the first place? Is it to be able to have a point-in-time restore? Then you need to leave it Full Recovery. When it switches over to Simple you lose the ability to have a point-in-time recovery during that time. Is that okay with your business owners? If not, then leave it in FULL recovery.
Do you know what is causing your Tlog to grow at night? Is it due to index maintenance? Are you tlog backups not set to run over night? Are you loading large amounts of data? I would suggest that you figure out why the log is growing and see if there is anything you can do to limit the size of the growth during that time. Look for things like rebuilding your indexes regardless of fragmentation level (fulls for all indexes, etc.). Can you perform more frequent log backups during the time, etc.
Let us know what you find and then we can help you come up with a better plan of attack.
I can't simply say that you should add more space to your Tlog, but I can say that you need to make sure you don't run out of space. So, while you are investigating the source of the growth make sure you are keeping an eye on the amount of disk space that is available and be ready to act.
Microsoft Certified Master - SQL Server 2008
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