Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Fixed Term Loan

Options
  • 20-08-2010 11:32am
    #1
    ascuteasabutton
    Registered Users Posts: 199 ✭✭


    Hi just looking for some advice/opinions on this..we took out a 5 year Fixed Term,Variable Interest Rate Loan, the last repayment is due next month but the bank in question now says that we still owe €900 in Interest?

    How can this be? Surely as the Interest Rate Changes the monthly repayment is adjusted and the loan should still be finished next month as it is Fixed Term?


Comments

  • Options
    #2
    titular
    Closed Accounts Posts: 19 ✭titular


    ascuteasabutton wrote: »
    Hi just looking for some advice/opinions on this..we took out a 5 year Fixed Term,Variable Interest Rate Loan, the last repayment is due next month but the bank in question now says that we still owe €900 in Interest?

    How can this be? Surely as the Interest Rate Changes the monthly repayment is adjusted and the loan should still be finished next month as it is Fixed Term?


    It will depend on how the repayments to the loan were structured. If you paid by Direct Debit, this should have been the case and I would question the bank as to why they did not take increased payments.

    If, on the other hand, as I suspect, your payments were transferred by means of standing order, then the same amount will be transferred until such time as they are manually amended.

    I am unsure as to why the repayments would be structured in this manner but an easy way to check if this was the case is to check your current repayment amount against the initial (ma be on the loan agreement) if they are the same then it is likely that this is the issue.

    You may be able to press the institution as to why they set it up this way and why they never advised you to increase the payments with subsequent intrest rate hikes.


Advertisement