GE Money Can they really do this?

vivaladiva

I have a variable rate loan with GE. I have just questioned why the payments haven't fluctuated with the interest rate. I am never notified when the interest rate changes. I asked why. Apparently I have only agreed to the payment on my loan agreement and thus they can't amend it. Apparently it is up to me to amend the payment when the interest rate changes. I pointed out that they don't inform me of interest rate changes, except on my annual statement (and it is in very small writing!), so how am I supposed to know when the interest rate has changed? GE's answer - THEIR INTEREST RATE IS PUBLISHED IN THE NATIONAL PRESS:eek:.

Surely this is no way to operate a loan agreement?

It states on the back of the credit agreement that they have the right to amend my payment if there is a change in the interest rate. They are not doing this.
If I need to check interest rates in the National Press, presumably I need some sort of formula to work out how I apply the published interest rate to my account.

I can only imagine this is for their benefit not mine.

Typhoon2000

Well the loan rate is not connected to the base rate in anyway, rather the lenders assement of the risk. Interest can go up, down or stay the same independent of base rates. Most loan rates have gone up in the last year despite baase rates coming down so your doing pretty well to stay as you are. I guess you pay by direct debit so if the interest rates change the correct payment will be taken automatically from your bank account. I would have thought they would have write to you, or include in your annual statement if your rate changes only once a year.

vivaladiva

My rate does change more than once a year. It's my payment that they are saying is fixed. ObviouslyI'm now aware that if I'm not paying enough there will be a shortfall at the end of the loan. They do quote an ANTICIPATED number of monthly payments. Bearing in mind that the interest rate the payments were calculated on was around 6.5% and it's now around 9.5%, that's going to mean a considerable number of extra payments:eek:.

TheGrant

Typhoon, it reads to me the OP is saying that GE don't change their DD amount and they expect customer to spot their ads in the national press and then figure out their new amount from the advertised APR.

That really sounds attrocious. I have no idea, but even if you have signed in agreement for that then I can't believe it is legal.

Typhoon2000

But if it is a Direct Debit then its is the only the lender that can request and change the monthly payment. The borrower cant ask his/her bank to pay a different amount.
Unless the OP is actually paying by standing order, which would be unusual.

vivaladiva

TheGrant wrote: »

Typhoon, it reads to me the OP is saying that GE don't change their DD amount and they expect customer to spot their ads in the national press and then figure out their new amount from the advertised APR.

That really sounds attrocious. I have no idea, but even if you have signed in agreement for that then I can't believe it is legal.

That's about it. There must be one heck of a difference between the payment required on 6.5% and that on 9.5%.

This loan has been running for 5 years and I've only just twigged:o. I actually thought it was on a fixed rate and the tiny figures at the top of the statement referred to variable rate loans.

TheGrant

Typhoon2000 wrote: »

But if it is a Direct Debit then its is the only the lender that can request and change the monthly payment. The borrower cant ask his/her bank to pay a different amount.
Unless the OP is actually paying by standing order, which would be unusual.

OP will ask GE to change the DD.

petermb_2

TheGrant wrote: »

OP will ask GE to change the DD.

The whole point of a DD is that the lender can alter the amount requested providing they notify you in advance of the change. To say that the rate changes but you have to in from them to ask for more money is nonesense. You would have to do this with a standing order, not a Direct Debit.