Student Loan Problem - So Worried, Please Advise!

[soconfused]

Hi

I'm hoping that someone on here will be able to advise me on a situation that has arisen in the past few days regarding a student loan. The student loan in question was taken out in September 2009 with my bank and I have been making weekly repayments ever since of €30 as agreed with no missed payments.

I am no longer a student (I am working on a fixed term contract that is due to end soon and I'm having difficulty in finding alternative employment) and I received a letter dated 07/09/2011 from my bank advising that "the limit on your loan account has expired since 04/09/11. Please contact your local *** Bank or this Office to discuss the matter further". The 'office' that sent the letter was 'Central Arrears Management'.

I immediately rang my local branch after getting the letter in the post and was answered with a very relaxed "oh yeah, you just need to get that renewed" and was asked to call into the branch later that day (9/9/11). When I called in, I was asked twice by the Customer Services lady about whether or not I had received a previous letter advising the loan facility was due to expire and she seemed quite surprised that I hadn't received any other notification.

She took a few brief details (and I mean very brief) and advised that she would put through an application for a "variable rate personal loan" as I was now working and that she would call me today and of course I received no phonecall. My €30 loan repayment came out of my account today as usual, however I also noticed that there was a 'withdrawal' on the 05/09/2011 and then a 'lodgement' on 06/09/11 for an amount similar to the loan amount. The full funds to cover their withdrawal would not have been in the account on the 05/09/11 however I am extremely annoyed as at that stage I wasn't even aware of the situation. If I had tried to use my ATM/Laser card on 05/09/11 then it would have come up as insufficient funds and I was never made aware of any potential withdrawal attempt. I wasn't even advised that this had happened when I called into the branch. I'm also due to get paid from work next week and get paid monthly and I am worried that they will try to withdraw my months wages from my account as soon as it goes in. Are they allowed to do this?

Thank you so much if you have read this far and I really hope that you can offer some advice as I am really worried about the situation and a possible negative impact to my credit file.

Thank you in advance for any advice given!

 

[rustbucket]

Hi. From experience similar to yours I would suggest you dont get too worried about it. It is quite normal.

Some student loans and indeed other loans (particularly ones that have small repayment a amounts such as interest only) generally are set with an expiry date (such as a year). After the expiry date the system is then told to withdraw the full funds due from the current account.

It is up to the loan holder to check the terms and conditions of the loan and expiry and make arrangements with the bank to restructure the loan. The letter you received was a reminder that this facility was due to expire.

I have had an ongoing student loan for the last 3 years. Year 1 the exact same thing happened and €10K was debited from my current account and credited to my loan account to clear the loan.

I went in to the bank and once a new agreement was in place the transaction was reversed or a new loan put in place to bring it all square.

My repayments then started again albeit I was paying off a little more each month.

This happened again on year 2 and year 3 although I went in to the bank each time subsequently to restructure before the expiry date.

The bank will more than likely restructure the loan for you no problem. I wouldnt think it would affect your credit file although if you are worried why not ask them how it will affect your credit rating

 

[Bronte]

In relation to the personal loan application, did you sign that? What is the interest rate and repayments on that and more importantly can you afford it? Did you also sign a direct debit for those repayments?

 

[soconfused]

I haven't yet signed anything. I haven't been told anything regarding interest rates or terms or anything and to top it all off, the lady that I dealt with in the branch last friday, who was supposed to call me yesterday but didn't is apparently off sick and the other staff in the branch don't know anything about it.

My €30 payment came out of my account yesterday as usual but I still don't know where I stand

Regarding the personal loan application it is supposed to be for the money that was previously sanctioned two years ago or well the remaining balance which is about €2500 approx. that has expired - money that I have already received and now spent on college expenses, nothing extra.

I just didn't expect all this, I thought that as long as I made my payments on time which I have done (directly from my current account), I would eventually get the stupid thing paid off. It was a top up loan so they have approximately 4 years payment history for me in regards to student loans- ie 2 years on the original loan and then 2 years of paying since I topped it up.