Loan penalty interest....

Drumpot

I have had to renegotiate a personal loan several times with boi.

They said in oct 09 that they would not renegotiate again flr at least two years, irrespective of my financial circumstances. Last summer I couldn't continue meeting the repayment amounts so I contacted them and only after explaining my situation several times , did they reluctantly put me on to some debt collection section that asked how much I could afford.

I agreed on an amount that's just under the interest cost of the loan (because I didn't want loan to increase too much).

For the first time I got charged a Penalty interest for "missing loan repayments". I have not missed any of the agrees payments to date but my renegotiated monthly payments are now getting charged a penalty interest.

Can somebody please explain why this is the case and why this wasn't dosclosed to me when I rearranged the loan? I asked boi for a copy of my conversation but they said they wouldn't have it!

Also, is it possible to rearrange a loan on interest only manner (like a mortgage) so you can at least avoid the penalty interest. Seems ridiculous that the banks try to penalise people struggling even more when they can barely afford to pay them the interest!

Bank of Ireland: Linda

Hi Drumpot,

As your question is account specific we would need to look into the account for you. If you can please pm me with your name and contact number, also the best time to call you, I will get someone to contact you in relation to this.

Thanks
Linda

Drumpot

For ease of story, I will post the rest of the story here and PM you my account details (with this as refereance).

I had been speaking to a ****** in your loans department (not sure where she is, not in my branch so must be a head office person).

I raised my concerns and she posted me out BOI documentation highlight a part that stated on the "schedule of fees and charges for personal customers" (page 25):

Interest Surcharge on loans

“Applied to the amount in arrears where repayment not made on due date: 0.6% per month”

And she highlighted a section of my contract where it says “If you miss a scheduled repayment your loan will go into arrears and you will be obliged to pay bank surcharges”.

My issue is that I phoned up BOI last summer to explain my distressed situation. The initial response was "well part of your loan agreement in Sep 2009 was that we wouldnt consider re-organising this loan for at least 2 years". That was what was said to me at that time.

Eventually when I was put through to this other Loans department was that I could pay what I could afford, but that the capital would still need to be paid. Dont have a problem with that. I also dont have a problem with the differance between the interest on the loan and my payments being added to the loan amount. I have a problem with the surcharge (lets call it what it is, its penalty interest). I am only raising this issue now because I got charged the first surcharge last month and I wasnt expecting it.

I also have an issue with the wording of your documentation. It does not clearly state that this surcharge will also apply if get in financial difficulty and actually renegotiate a payment plan that you can afford. I am making the repayments that BOI accepted I could afford, but I am still getting charged for "missing a scheduled repayment" penalty.

I will be taking this further because I wasnt given any other option and I dont believe its a clearly understandable/outlined Penalty in my circumstances. I also dont understand why I wasnt afforded the opportunity to re-negotiate the terms of my loan last summer in my distressed situation.

Bank of Ireland: Linda

Hi Drumpot,

I have recieved your pm. I will organise a callback to the number we have on file for you. I do apologise for the issues you have had regarding the loan.

Thanks
Linda

Drumpot

Hi Linda,

I received a call from somebody in your credit operations department. I will PM you the phone number that it came from but when I ring it it says the number is no longer in use.

Bank of Ireland: Linda

Hi Drumpot,

Thank you for your pm, I have responded to you.

Thanks
Linda

Drumpot

Hi Guys,

Thanks very much for all the help. I was contacted by one of your colleagues who assisted me in putting together a very helpful and fair plan.

Thanks

Bank of Ireland: Linda

Hi Drumpot,

I am glad it worked out for you and if there is anything else we can do please don't hesitate to ask.

Thanks
Linda