Dramatic Loan Repayments Hike

richc757

Here's an interesting one. As part of my career development I borrowed a fair bit of cash to fund training to become an airline pilot 3 years ago (£45k). The loan in question was a structured, unsecured loan from HSBC which gave me headroom to complete my course and begin repayments 6 months after gaining my qualification. Interest wise it tracks at 2% above the bank's base rate I began repayments in Dec 06. They failed to complete a review of my repayments last year and have just announced to me that in a week my repayments will go up by a further £120 per month. I asked why they failed to complete a review last year and got the response of 'changes in management structure meant that it was overlooked'. This increase of £120 per month equates to a 20% increase in repayments and sadly I don't think I'll be getting a 20% payrise this year. Just wondering if anyone could answer the following questions:

1. Is there a minimum amount of notice that banks are required to give in terms of repayment rises? I know this may be slightly generic but have found nothing in my T&Cs and wonder if anyone else has had this?

2. Can they apply repayment increases retrospectively?

I had thought of trying to transfer the debt to another provider although in the current 'credit crunch' climate consider this unlikely to be successful.

It seems as though I'm picking up the tab for HSBC's mistake. Any pearls of wisdom? Martin, really need you on this one!!!

Rich C

(A very broke pilot!)