boi bank loan interest very high?

sham69

Hi,
Got a loan of 5k in September 2006 and have been paying about 130 back a month (skipping 2 months, December and January). The interest seems extremely high, every 3 months I pay nearly the equivalent of my repayment?
I rang them on Friday to ask them about it and surprise surprise they could not get my original agreement on the system as it crashed just as I rang.
I have moved house since originally getting the loan and can't find the original agreement either. The girl from the bank said it was the interest rates that were causing the high interest. I thought I signed for a fixed rate loan but could not be sure. I am considering paying this off a lot quicker (end of the year as opposed to 3 more years). I suppose my question is, are the interest payments correct and will paying the loan off early do anything to my credit rating.
I am clueless when it comes to this sort of stuff but would be surprised if I signed a variable rate loan. Come to think of it when I went for a loan with a different bank a few years ago I just got a loan and the interest was nothing like this which makes me think it was a fixed rate one.
Any advice appreciated.
Thanks
Sham.

wingnut

First piece of advice: change banks, BOI suck.

You need to work out exactly what interest you have paid (through your banks statements). You can't argue a case with no facts. You should be paying in the region of 8% for a personal fixed rate loan (give or take 1%).

IE. €20,000 over 5 years will cost about €4000 in interest. With BOI you will have to pay charges if you pay off a fixed-rate loan early.

sham69

Thanks for the reply.
I am going to ring them back on Tuesday and find out what rate I am on.
130 every 3 months is a lot and over 5 years would be much more than 2000 in interest. Thinking of going for a mortgage this time next year (thus why I want to pay my loan off early) Who would you recommend I bank with.
Thanks.

KillerShamrock

wingnut wrote: »

First piece of advice: BOI suck.

As an employee ill agree ha

With BOI you MAY have to pay charges if you pay off a fixed-rate loan early. This basicly says you MAY have to pay the full amount of interest due over the full term of the loan if you clear it off early.

Its not you will have too but you may have too, and this is with most banks not only BOI
Im not 100% on when you do and dont have to, its something to do with the interest rate of your loan being higher or lower than the present rate dunno, and as far a im aware its rarely enforced

As for the person in the branch who couldnt pull it up on the system thats a bit of bull because the paper copy of your loan as in the second 1 you sign that the bank keep, has to be held in the branch you took the loan out in for like 6 years after the loan is closed.
Now was it some one actually in the branch or the usless call centre or 365 cause then yep they probably wouldnt be able to get the loan up on the system, also to add insult ringing in on a bank holiday friday about as useful as ringing your branch on a sunday, they could of told you they could look up the copy and get back to you at their next available moment which would most likely be tuesday.

As for the interest your paying yep it would be about €2000 in interest for €5000 over 5 years at 8% interest thats if its fixed which it most likely is. Its a high bit of interest on a small amount because of the lenght you took it over not because of the interest rate.

I am not regulated by the financial regulator when im not in work so this is my 2 cents and not financial advise

sham69

Cheers for the reply richie.
Best thing I can do is ring back on Tuesday and find out what the original agreement was. I am not sure which branch as I applied online and posted the necessary documents etc. In the meantime I will look for my copy of the agreement. Is it possible that I agreed a fixed rate loan and these high interest charges are a mistake?
Cheers.

KillerShamrock

Well if you applied online then either 365 have the agreement or its in the branch where your current account is held. So you could try ringing 365 again today.

Like I said before its not that they are charging you high or wrong interest its more down to the lenght of time you have borrowed the money over, like the other poster said most likely its at around 8% if its fixed.

There is possibly a very slim chance the interest rate your being charged is wrong but its highly unlikely probably 1% if even, and if you signed an agreement that informs you of the interest and they have charged you this amount of interest correctly, then there is very little if nothing you can do im afraid
let me know when you find out though

sham69

Thanks again richie.
I will let you know tomorrow when I ring them.
Cheers.

stepbar

Richie6904 wrote: »

As an employee ill agree ha

With BOI you MAY have to pay charges if you pay off a fixed-rate loan early. This basicly says you MAY have to pay the full amount of interest due over the full term of the loan if you clear it off early.

Its not you will have too but you may have too, and this is with most banks not only BOI
Im not 100% on when you do and dont have to, its something to do with the interest rate of your loan being higher or lower than the present rate dunno, and as far a im aware its rarely enforced

As for the person in the branch who couldnt pull it up on the system thats a bit of bull because the paper copy of your loan as in the second 1 you sign that the bank keep, has to be held in the branch you took the loan out in for like 6 years after the loan is closed.
Now was it some one actually in the branch or the usless call centre or 365 cause then yep they probably wouldnt be able to get the loan up on the system, also to add insult ringing in on a bank holiday friday about as useful as ringing your branch on a sunday, they could of told you they could look up the copy and get back to you at their next available moment which would most likely be tuesday.

As for the interest your paying yep it would be about €2000 in interest for €5000 over 5 years at 8% interest thats if its fixed which it most likely is. Its a high bit of interest on a small amount because of the lenght you took it over not because of the interest rate.

I am not regulated by the financial regulator when im not in work so this is my 2 cents and not financial advise

Few points:

Pay off a fixed term loan earlier => pay a surcharge not the full amount of interest over the loan!

You can't "pull it up on the system" after a certain period. Yes the bank keeps a paper copy but OP to be fair you should have one too. It would be alot quicker if you brought in the loan agreement into the branch yourself instead of having some poor unfortunate searching through a pile of loan agreements in the safe!

Finally the cost of a 5k loan over 5 years would be about 1k and not 2k as described. Check out http://www.itsyourmoney.ie/index.jsp?pID=123&nID=469 to confirm and put 8% into the calculator.

KillerShamrock

stepbar wrote: »

Few points:

You can't "pull it up on the system" after a certain period. Yes the bank keeps a paper copy but OP to be fair you should have one too. It would be alot quicker if you brought in the loan agreement into the branch yourself instead of having some poor unfortunate searching through a pile of loan agreements in the safe!

Finally the cost of a 5k loan over 5 years would be about 1k and not 2k as described. Check out http://www.itsyourmoney.ie/index.jsp?pID=123&nID=469 to confirm and put 8% into the calculator.

Well the program that it was most likely done on does retain a read only version of loans for some time so 2006 would most likely be on the system plus there is more than one program that could give the info they were looking for.
Its a simple case of getting his name or account details to pull it up so yep the op was pretty much fobbed off in terms of just wanting to know his interest rate and if the interest charged was right

The op couldnt find his loan agreement thats why he rang the branch/phone service to get answers. Thats why i said the staff member could of taken his details and got back to him later that day or the next working day.

stepbar

Richie6904 wrote: »

Well the program that it was most likely done on does retain a read only version of loans for some time so 2006 would most likely be on the system plus there is more than one program that could give the info they were looking for.
Its a simple case of getting his name or account details to pull it up so yep the op was pretty much fobbed off in terms of just wanting to know his interest rate and if the interest charged was right

The op couldnt find his loan agreement thats why he rang the branch/phone service to get answers. Thats why i said the staff member could of taken his details and got back to him later that day or the next working day.

I can tell you now that it won't have a read only version from 2006. AFAIK 6 months is the max time period. To be fair, it's not hard to keep a loan agreement. For the branch to go looking for one means pulling people off their normal jobs and having to search for same. As you know there are only certain times of the day when the safe would be open. Outside of those times means having to take two people off their normal job (duel control procedure) just so the safe can be opened. Now I don't know where you work but it would sound like it's not in a branch. It's hassle that's not needed TBH.

KillerShamrock

stepbar wrote: »

I can tell you now that it won't have a read only version from 2006. AFAIK 6 months is the max time period. To be fair, it's not hard to keep a loan agreement. For the branch to go looking for one means pulling people off their normal jobs and having to search for same. As you know there are only certain times of the day when the safe would be open. Outside of those times means having to take two people off their normal job (duel control procedure) just so the safe can be opened. Now I don't know where you work but it would sound like it's not in a branch. It's hassle that's not needed TBH.

Well i work in a lot of branches and well they are usually kept in a book safe and they dont always need duel control and usually easily accessed, any way this has gone off topic and the original poster doesnt seem to have gotten an answer or just not bothered replying with it,
If your still reading this sham let us know how you got on

sham69

Finally got to speak to someone with a bit of sense. Seems I did choose a variable rate loan. As I applied online I must have chose the wrong option or something. The person I was speaking to was saying that if I was physically taking the loan out in an actual branch I would have been advised to choose a fixed rate loan. I am just going to pay it off early.
Thanks for all the replies.