overpayment of loan question

100gSoma

A 3 year loan (variable rate) was at its final stages. In fact the remaining balance was less than the imminent monthly standing order. So I cancelled the standing order and manually transferred the remaining balance of approx 280euro plus 5euro to cover any interest that was accruing daily. (It might take 3 business days for the final payment to go from halifax to BOI etc).

anyway, I rang up today and the loan is finished and the loan account is 3euro in credit. great. I wonder will they automatically see its overpaid and refund the 3euro to the source account of the final payment? Or will they leave it there and I will probably have to send in a written request stating a refund account etc etc. In fact last week I was told by the branch I could not pay it off manually like this and would have to send in a written request to finish the loan manually. yeah right. someone else from the same institute said I could just pay it off, no problem, which I did.
Im not bothered about the 3euro really, just wondering will it be an automatic refund or will I need to cut some red tape to get it issued as a cheque or some convenient cr%* like that. thanks

Priapus

100gSoma wrote: »

In fact last week I was told by the branch I could not pay it off manually like this and would have to send in a written request to finish the loan manually. yeah right. someone else from the same institute said I could just pay it off, no problem, which I did.

Getting two different answers from two different people seems to be a very common issue in irish retail banking i have to say. Bugs the hell out of me. A lot of them peddle easy answers and are winging it...i am sure of it.

Anyway, I would not assume your loan will automatically be closed out. A positive balance could result in the account remaining active. I personally would write a letter stating the facts as you have above, and request confirmation of the account being closed and a cheque to be sent out in the amount of funds remaining. (If the account was closed properly by the bank you should receive a letter confirming the loan has been repaid and the account closed etc anyway,. I would still send them in a letter and I would request the overpayment be refunded)

jor el

I had a loan with BOI, and it was nearing the end. I paid off about €400 to clear it, would have been 2 and a bit payments left. The next scheduled payment still went in, but as soon as the loan account goes into credit, it triggers some process to cancel the direct debit, and the excess was refunded. It took about a week for the money to go back to my current account.

So, you'll get the money back in a couple of days.

100gSoma

jor el wrote: »

but as soon as the loan account goes into credit, it triggers some process to cancel the direct debit, and the excess was refunded.

Hey thanks for that guys. Regarding the above, the standing order is with a different bank so I cancelled that myself. I'm hoping your right about the loan though, that the credit balance will trigger a "loan completed" situation. although I now realise form the first comment that I cannot leave this to chance or who knows. The loan might be still opened in a years time. I better write off a letter stating all the facts to my branch where the loan is. lame.
thanks guys,

Toots

There's a report that comes down each day of the loan accounts that go into credit, so they'll be closed and any money refunded to the paying account, or else posted to you in the form of a draft (depends on the amount). Depending on who is calling off the report, they may phone you to see do you want the account transfer or the draft.