Miscalculated Loan

jrwhyte

Hi,

I took out a graduate loan of £10,000 a few years back to be paid back over 60 months.

The above appears on the credit agreement along with the amount of interest to pay is also stated and was 7.9%.

The credit agreement then states that I'm to make 59 payments of 166.66 and a final payment of 167.06.

Recently I realised that the bank made a mistake on the credit agreement as my payments only total £10,000 meaning I wouldn't pay the interest.

I called my bank recently to see when my final payment date is and they said next year sometime instead of this August when my 60th instalment is. Without notifying me they have recalculated my loan to take into account the interest of 7.9%. With the new final payment date I will be paying 7.9% interest over a longer period of time so therefore paying more interest than is stated on my credit agreement.

Any thoughts on the above? Do I have a right just to pay the 60 instalments as stated on the credit agreement?

Thanks for your thoughts.

Rafter

jrwhyte,

Your loan agreement may be technically unenforceable. However, the bank could argue that they are not a charity and that not charging any interest would obviously be stupid. Therefore by stopping payments they might mess up your credit rating.

However, I think your bank is on shakey ground with this one extending your loan to try and cover up their mistake. Might be worth a letter of complaint asking on what legal basis they are extending your loan, given you have made the payments outlined in your credit agreement. The fact that they have miscalculated the APR or payments is hardly your fault.

They might make you an offer and if you are unhappy you can possibly escalate it to the ombudsman, although I doubt your bank would want it to get that far.

Good luck.

R.

27col

It sounds to me as if the mistake that you made was to contact your bank.

jonesMUFCforever

Rafter wrote: »

jrwhyte,

Your loan agreement may be technically unenforceable. However, the bank could argue that they are not a charity and that not charging any interest would obviously be stupid. Therefore by stopping payments they might mess up your credit rating.

Good luck.

R.

You could also argue that the bank as a professional lender should be able to write out an accurate CCA agreement.
The CCA is binding on both sides - if yours states that you should make x amounts of £y in repayments and you have done that then your obligation is complete.

HOWEVER do not stop the repayments - open a dispute with the bank - they will soon come round to your way of thinking.