Loan settled, but lender have taken another repayment. Anyone had this before?

LunaMoon

Hi

I've recently come into some money so am using it to pay off debts. I had a loan with Sainsbury's Bank and paid off the settlement figure via bank transfer on 12th April. I logged into my internet banking this morning and Sainsbury's have taken my usual loan payment of £168 by DD.

I called them and the operator confirmed that the bank received my settlement payment on 14th April and that it takes 10 days for them to process this payment and formally close down my loan account. The payment of £168 will be refunded to me 16 days after my account officially closes.

These timescales do seem really long to me, but I have no idea if there are any rules on this, or what is normal protocol with lenders. I will check my paperwork when I get home to see what the small print says...but at the moment I am really confused about why it takes 2 days to "receive" a bank transfer, a further 10 days to process it and close my account and then an additional 16 days to make any refund due.

I did ask the question on the phone and the operator said it was due to "operational processing".

Have any of you guys come across this sort of situation or timescale before? Is it normal?

Thank you.

Tixy

A couple of days for a manual payment to be credited to your loan account is pretty typical.

And so not suprising that the DD was still taken.

The 16 days seems quite long but it may be that this is the longest estimate and that they may process it quicker.

Thrugelmir

Direct debits are initiated 10 days before the due date. So if you made payment on the 12th the process was already under way.

While processes appear long winded. This is to ensure that the payment made isn't recalled for any reason. Then different teams will be involved at each step of the refund process to ensure segregation of duties between staff members.

LunaMoon

Thanks both for your replies. I had no idea DDs were set up so many days ahead!

G6JNS

LunaMoon wrote: »

Thanks both for your replies. I had no idea DDs were set up so many days ahead!

You could ask your bank to refund the DD now rather than waiting.