Changing your loan repayment date

Steve2306

Hi everyone,

I have had loan with my bank for around 3 years. So I'm 3 years into a 5 year term. My employer has recently changed my pay date as it has been taken over by another company. I have managed to change the payment date for all my other finances i.e. on payday - so all my bills and outgoings get paid straight away then I know how much I have left to spend for he rest of the month. But my bank are flat refusing to allow me to change the date I make my repayments. I have spoken to several different people at the bank and I have just been given the curt reply "You were made aware of the terms and conditions of the loan when you signed up for it".

I'm sure from reading the loan conditions from other banks that changing the repayment date is possible - so why are my bank digging their heels in? They say it's because the interest is calculatedon a certain day of the month when you take out your loan. So why can't it be calculated on a different day of the month??? :mad:

My argument is who knows what thier personal employment circumstances will be within the next 5 years of their life. I'm absolutely sure that people will have their pay date changed. So this has to have caused a problem for others.

Has anyone else on here been able to change their loan repayment dates? Has anyone else had a similar problem? Surely this a serious failing in the banking system that there is no mechanism in place to support thier customers who have thier paydate changed for some reason. I've got a real bee in my bonnet about this. I'm not going let go of this and I really want challenge my bank to the nth degree. So I would also appreciate any advice about what channels I should go down - financial ombudsmen maybe???

For anyone still reading - thanks for reading my rant and I'd really appreciate your replies!!!

Cheers:)

Tixy

Some lenders will allow you to change a payment date, usually by bringing it forward rather than dropping it back (ie if the borrower currently pays on the 18th and want to switch to the 28th they'd expect 2 payments in the change over month). Some will allow you to drop it back a few days and calculate the additional interest charge based on that change, but as you have found some lenders won't do this and they are under no obligation to do so.

As its just one item could you not just remember to keep that amount of money in your account each month? or if you really don't want to see that money in your account you could transfer it by standing order to another separate bank account the day after your new pay day, and then transfer it back to your main account 1 day before the loan payment is due to go out?

ReadingTim

The problem is that by asking to alter the payment date, you're effectively altering the term of the loan.

The date of the monthly payments will usually be the date you took out the loan, or the date the bank provided the funds to you. Let's use the 15th of March 2010 as an example. By asking to change the date of the monthly payments to (say) the 25th, you're either asking to borrow the money until 25 March 2015 (ie for longer, at 5 years 10 days) or until 25 February 2015 (ie for less time, at 4 years, 11 months and 18 days)

Both of these requests are not what you agreed with the bank, and they're within their rights to ask you to stick to your original agreement, and therefore payment date.

I suspect their reluctance to agree to your request is that you're trying to increase the term of the loan - perhaps if you asked if there was a way to overpay in such a way as to bring the payment date forward (to align to your new payday), you might have more sucess?

Alternatively, as the repayment amount is known, simply set up a direct debit for the monthly repayment to come out of your current account and into a savings account as soon as you've been paid, and then another DD from the savings account back to your current account the day before the loan payment is due?

LovelyLeeds

ReadingTim wrote: »

Alternatively, as the repayment amount is known, simply set up a direct debit for the monthly repayment to come out of your current account and into a savings account as soon as you've been paid, and then another DD from the savings account back to your current account the day before the loan payment is due?

Great idea, but I would allow 3 working days for any transaction.

Steve2306

Alternatively, as the repayment amount is known, simply set up a direct debit for the monthly repayment to come out of your current account and into a savings account as soon as you've been paid, and then another DD from the savings account back to your current account the day before the loan payment is due?

Thanks for your ideas. If infact I have already set this up (i.e. to transfer the money into a savings account then back into my account. So the actual practicalities of how I'm going to pay sorted out now. I'm just so ticked off that don't let you change. It just seems so unreasonable when other lenders offer the service. I'm not complaining on behalf of myself - I'm now complaining on behalf of everyone else who I'll bet are just as frustrated as I am. :mad:

Some lenders will allow you to change a payment date, usually by bringing it forward rather than dropping it back (ie if the borrower currently pays on the 18th and want to switch to the 28th they'd expect 2 payments in the change over month). Some will allow you to drop it back a few days and calculate the additional interest charge based on that change, but as you have found some lenders won't do this and they are under no obligation to do so.

To be perfectly honest - I would gladly make a double payment in the change over month. I would gladly pay a charge for covering the interest inbetween the dates - even plus an 'admin fee' if necessary. But the fact that the bank do not consider the personal circumstances of thier customers (especially as when the bank make such a massive deal about their ethical code of practice) just isn't right. I just think that this is a failing in the banking system, and when we paying such a lot in interest - customers deserve to be treated better!

Sorry rant over - again!!

cottonhead

I had this issue with my mortage company and in the end they said if I paid a 1 off admin fee they would change the date. In my case though I was brining it forward. On the other hand I have a Next shopping account and the payments are always due before I get paid. They also refused to change it stating everyone has the same day and its just not possible. Therefore every months payment is 'late' and as a result I am closing the account and will no longer shop there. I would put your request in writing. Its in both your interest to change it - perhaps the person you spoke to couldnt be bothered or didnt know how to do it.

CLAPTON

cottonhead wrote: »

I had this issue with my mortage company and in the end they said if I paid a 1 off admin fee they would change the date. In my case though I was brining it forward. On the other hand I have a Next shopping account and the payments are always due before I get paid. They also refused to change it stating everyone has the same day and its just not possible. Therefore every months payment is 'late' and as a result I am closing the account and will no longer shop there. I would put your request in writing. Its in both your interest to change it - perhaps the person you spoke to couldnt be bothered or didnt know how to do it.

a string of late payments showing on your credit files will make it more difficult to get credit in the future