Bank has no record of loan facility letter

cagedbutterfly

Looking for some advice about what my position is if anyone can help. So here's my story:

I had a business that I had to close during the recession and at time of closure I hadn't fully paid off my business loan so I went into my local bank and chatted with the Business Manager who advised that the loan would have to be restructured as a personal loan as I would no longer be trading as a business. That was fair enough and we got the details sorted out, I signed the facility letter etc and the new repayments commenced the following month and was a 7 year loan from that date.

Roll on a few years and I contacted the bank to see how much was left on the loan and that's when I discovered that the loan was actually a 10 year loan and not 7 so I went to look up my documentation and I could not locate it. I have every other piece of documentation in relation to the business but just not that one piece. I couldn't say for certain whether I had it or not as I was dealing with a lot of paper work at that time for the business closure but I kept a file for everything to do with the business and this is the only piece not there. But anyway I then contacted the bank to obtain a copy but my request was repeatedly ignored and eventually after 2 years asking but not receiving I put in a complaint. The complaints department have finally come back to me to say that there is no record of a facility letter for this loan. They suggested the reason is because of branch closures etc.

So bottom line, I have no documentation and neither do the bank, of a loan that does exist and is being repaid every month without fail. Do I have any grounds to question the term length or do I just need to suck it up and keep paying for the full 10 years even though I have always believed it to be a 7 year loan. Now i have since done the figures and they do suggest a 10 year term but I know there is no way I would have gone for that length of time. I initially wanted a 5 year term but couldn't afford the repayment and the bank business manager went for 7. Plus I have also just discovered that it is still a business loan and not a personal loan.

Any advice that anyone can offer would be great thanks.

Trish56

Have you not been receiving annual statements on this loan showing the balance and interest charged and repayments from day one. As far as I'm aware you are entitled to annual statements. Also the bank should have full details of your loan online.

I think this may be a case for the ombudsman unless the bank wants to make a deal with you.

cagedbutterfly

The bank did provide me with the relevant statements once a year but my issue is that I was of the belief that it was a 7 year loan and I have just discovered that it is in fact a 10 year loan. Neither the bank nor myself have a copy of the signed documentation to show which it is.
This is not an exercise in me trying to avoid paying my debt but if the loan I signed for is a 7 year term then naturally I don't want to be paying it for an extra 3. But how do I question the bank about it or what is the best way to deal with this going forward?

domrush

Surely you can do a calculation with your monthly repayments and the amount outstanding to find this out?

dudara

The OP can calculate based on the statements, but all that will tell them is how the loan was setup on the system. There could be a mismatch between the paperwork and the setup, as the OP believes.

The original paperwork is really what's needed here to answer the question. Can the Financial Services Ombudsman offer any advice perhaps?

Jim2007

cagedbutterfly wrote: »

The bank did provide me with the relevant statements once a year but my issue is that I was of the belief that it was a 7 year loan and I have just discovered that it is in fact a 10 year loan. Neither the bank nor myself have a copy of the signed documentation to show which it is.
This is not an exercise in me trying to avoid paying my debt but if the loan I signed for is a 7 year term then naturally I don't want to be paying it for an extra 3. But how do I question the bank about it or what is the best way to deal with this going forward?

If you read all the documentation from the bank, most importantly the general terms and conditions relating to statements, I expect you will find that there is an obligation on you to check your statements and raise an issue with the bank within a certain period. So there is fault on both sides...

Logically they could restate the loan, recalculate the interest and capital payments, then have you make a once of payment to bring it into line as a seven year loan, is that what you expect???

Teyla Emmagan

Surely you can do a few sums based on your monthly payments and the amount you borrowed and work out how long the loan was spread out over? It's insane they have lost the paperwork but if you owe them you owe them.

cagedbutterfly

I'm not disputing that I owe them the money and have no problem paying my debt as I have been for the past 6 years.

When I received the yearly statement I only ever checked to make sure payments were all accounted for and a quick look at the balance but didn't ever do any calculations (obviously I should have). Two years ago mid way through the year, I won some money so decided to get an exact closing balance figure to see if I had enough to pay off the loan there and then, the bank gave me a figure and advised that there would be a penalty for paying off the loan more than 5 years early - this is when I discovered that the loan was a 10 year loan, even though I thought it was 7 years. So when I went to check the term length on my documentation, i discovered that I didn't have any for this loan apart from the statements. I requested a copy from the bank which they failed to do for the past 2 years so I eventually lodged a complaint with the bank for failure to provide this. The complaints dept have now just told me that they have no documentation in relation to this loan.

So I am just wondering how do I go about checking if there was a mistake when the loan was originally set up because while I have no problem paying my debt I definitely do not want to be paying an extra 3 years on a loan if that's not what I agreed to!