Bank changed my interest rate!
Ok so I took out what was deemed a relatively small loan - £2000 in November 2018 with my bank - Yorkshire Bank, did it all online, agreed to the interest rate, monthly repayments and length of loan.
Today, however I got a letter stating the following:
“We’ve realised that a mistake was made when your personal loan application was processed. We are sorry about this and have now fixed it. This affected the way we calculated your outstanding loan balance meaning it showed as lower on our system than what it should have been.
You don’t have to do anything. We have amended our system to the correct rate and re-calculated you outstanding g loan balance to the correct amount”
My question is can they do this after taking 8 months repayments at the original interest amount? Can they change the interest amount like that without first discussing it with me?
Advice would be helpful
Today, however I got a letter stating the following:
“We’ve realised that a mistake was made when your personal loan application was processed. We are sorry about this and have now fixed it. This affected the way we calculated your outstanding loan balance meaning it showed as lower on our system than what it should have been.
You don’t have to do anything. We have amended our system to the correct rate and re-calculated you outstanding g loan balance to the correct amount”
My question is can they do this after taking 8 months repayments at the original interest amount? Can they change the interest amount like that without first discussing it with me?
Advice would be helpful
0
Comments
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It seems that the way things were presented to you was incorrect rather than the interest rate you borrowed at and the monthly payments.0
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Looks like the bank has tried to avoid admitting an interest-rate error by saying they calculated the outstanding balance incorrectly - very slippery of them. However, they then go on to say they've amended their system to the 'correct rate', effectively making the admission after all.
Sadly, what they've done in reporting the financials is largely irrelevant (in my opinion) because you entered into a contract with them and you are therefore obliged to pay back your loan in accordance with the contracted terms and at the contracted interest rate.
You might want to check your paperwork though, just to make sure of the figures you signed up to, just in case it does show they agreed to the lower rate.0 -
As long as the amount you are repaying is in line with the agreement then there is little you can do. If this is causing you a cashflow problem then let them know and arrange mitigation. If your query is an attempt to realise an exit without full repayment or as a way of getting compensation then I suggest you give it a go if you have time on your hands and take rejection well.The views expressed here are my own. I am not a Solicitor nor am I affiliated with any of the parties I mention. If you disagree with any of my comments please say in whatever way feels most natural to you. No one self improves in a bubble!0
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Just want to clarify, I’m in no way trying to ‘wriggle’ out of the loan or payments.
I just wanted to know where I stood with them taking an apparent 8 months to realise their error and then only communicating that error AFTER they amended it.
Surely if it was based on a certain interest rate when I signed, it should have remained that way?
I didn’t think they’d be allowed to alter the interest rate of a Fixed rate personal loan after I’d signed and started making payments.0 -
Have they upped your monthly repayments?0
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Just want to clarify, I’m in no way trying to ‘wriggle’ out of the loan or payments.
I just wanted to know where I stood with them taking an apparent 8 months to realise their error and then only communicating that error AFTER they amended it.
Surely if it was based on a certain interest rate when I signed, it should have remained that way?
I didn’t think they’d be allowed to alter the interest rate of a Fixed rate personal loan after I’d signed and started making payments.
Like I said in Post #3, if you contracted to pay at a certain rate, then that's the rate you pay. Check your paperwork to make sure of the rate you agreed to.
I notice you haven't answered Splatfoot's post about your monthly repayments. Are they still the same now that the 'error' has been corrected and are they the same as agreed when you took out the loan?0 -
It's not clear as to what they mean by "We have amended our system to the correct rate" but it looks like it has to have had an impact on your monthly repayments, likely going up.
What was the interest rate and monthly repayment amount specified at the start of the loan?
What are the interest rate and monthly repayment figures now after this letter from Yorkshire?
If there is a difference in either of them (any increase however minor in the interest rate, or a not insignificant change in the monthly repayment), you have a right to be peeved.
In the above circumstances, in your place I would call and ask them nicely about the error they made and the impact it has had on you. If nothing results from that, make a formal complaint to Yorkshire Bank (or use the excellent MSE Resolver complaints tool) and mention clearly that I will take it to the Financial Ombudsman Service if there isn't a satisfactory resolution.
If you take it to the FOS, it will cost Yorkshire Bank £550. From experience, banks will apologise and offer a token payment (usually £30- £100) well before it gets to the FOS provided it is a clear error (or undeniably poor service) on their part.Which in this case it is, as their letter says.
Ask them nicely once, then make a formal email complaint and then if it's still not resolved take it to the FOS.
All of this is cost free and fairly straightforward (espcially so if you use the MSE Resolver tool). There's nothing to lose.
Good luck!Ok so I took out what was deemed a relatively small loan - £2000 in November 2018 with my bank - Yorkshire Bank, did it all online, agreed to the interest rate, monthly repayments and length of loan.
Today, however I got a letter stating the following:
“We’ve realised that a mistake was made when your personal loan application was processed. We are sorry about this and have now fixed it. This affected the way we calculated your outstanding loan balance meaning it showed as lower on our system than what it should have been.
You don’t have to do anything. We have amended our system to the correct rate and re-calculated you outstanding g loan balance to the correct amount”
My question is can they do this after taking 8 months repayments at the original interest amount? Can they change the interest amount like that without first discussing it with me?
Advice would be helpful0 -
Just want to clarify, I’m in no way trying to ‘wriggle’ out of the loan or payments.
I just wanted to know where I stood with them taking an apparent 8 months to realise their error and then only communicating that error AFTER they amended it.
Surely if it was based on a certain interest rate when I signed, it should have remained that way?
I didn’t think they’d be allowed to alter the interest rate of a Fixed rate personal loan after I’d signed and started making payments.
Hi Lou,
Instead of kicking this back and forth why don't you ask your bank for a statement. This will show you a breakdown of what you have paid thus far and what you are going to pay. Compare this to the original agreement and then let us know what it says.
It's an unfortunate reality that financial institutions present a facade of robust reliability but operate on any basis but that. If architects operated in such a shoddy manner builds and bridges would be collapsing all over the place. As a result, the latitude that surrounds some of the bank's processes and procedures is often greater than expected... but this doesn't get away from the fact that monies were borrowed and must be repaid.The views expressed here are my own. I am not a Solicitor nor am I affiliated with any of the parties I mention. If you disagree with any of my comments please say in whatever way feels most natural to you. No one self improves in a bubble!0 -
Apologies for not replying to messages sooner, it wasn’t a case of ignoring them, more a case of dealing with an ill relative!
Anyway to answer, I’m Unsure about new monthly payments as the letter was dated and sent a week after my last payment and my next is not due until the first week of next month. There has been no more contact other than the letter, they didn’t send anything else with it.
I called the bank and was repeatedly told to refer to my online account, which doesn’t show anything useful - it shows my balance and nothing else, when you click Money In (as in payments) you get the following message:
This type of account does not support this function
When I asked over the phone for more clarity about the letter I was sent I was told the exact thing written in the letter - like they were re-reading it to me!
They claim to only send statements after 12 months and that it is ‘hard’ to generate one before that.0
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