Personal Finance

Bank wants me to pay 12.5%!!!

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  • Oct 21st, 2010 8:11 pm
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Newbie
Oct 8, 2010
49 posts
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Welland

Bank wants me to pay 12.5%!!!

I graduated with $14k in a line of credit at the bank and they want to charge me 12.5% when payments begin in January. That's triple what it is NOW!

I was like... will it go down if I pay it down to 11-12k and they said no. It actually goes up to 13.5%!

What the hell is that? I have a credit card with lower interest than that.

What can I do? This is ********.
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May 24, 2010
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you can't do anything other than declare bankruptcy and have the bank negotiate down at that point
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Dec 8, 2007
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Find a new bank with a lower rate. Sizzle the deal by promising to move your business there.

You do have a job, right?

Then it shouldn't be a problem finding someone else to take over the loan.
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May 17, 2008
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lizotte_jason wrote: I graduated with $14k in a line of credit at the bank and they want to charge me 12.5% when payments begin in January. That's triple what it is NOW!

I was like... will it go down if I pay it down to 11-12k and they said no. It actually goes up to 13.5%!

What the hell is that? I have a credit card with lower interest than that.

What can I do? This is ********.

What were the terms of the loan when you took it out?
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Dec 7, 2009
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I agree that banks need to be further and further regulated. Sudden jumps in interest rate are one of the first things that need to be looked at.
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Mar 15, 2005
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Why did you take out a LOC instead of a student loan?
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Oct 2, 2005
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lizotte_jason wrote: I graduated with $14k in a line of credit at the bank and they want to charge me 12.5% when payments begin in January. That's triple what it is NOW!

I was like... will it go down if I pay it down to 11-12k and they said no. It actually goes up to 13.5%!

What the hell is that? I have a credit card with lower interest than that.

What can I do? This is ********.

i have heard of credit card that charge lower than 12% interest unless it is promotion. but you have no credit score; so you wont get a credit card that offers lower than 12%.

you only owe 14k for f sake. you can probably repay 1k a month. the interest wont be a lot. suck it up.
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Sep 22, 2009
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Canadia
Shouldn't this be in personal finance section....
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May 17, 2008
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jiepie wrote: i have heard of credit card that charge lower than 12% interest unless it is promotion. but you have no credit score; so you wont get a credit card that offers lower than 12%.

you only owe 14k for f sake. you can probably repay 1k a month. the interest wont be a lot. suck it up.

I'm a student and I have a TD emerald card at prime+4.9%, so that is less than 12.5%.
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Jun 23, 2003
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Ziggy007 wrote: Why did you take out a LOC instead of a student loan?

student loan is interest free and you don't have to pay back until you graduate at which point you really should pay back asap.
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Oct 23, 2003
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lizotte_jason wrote: I graduated with $14k in a line of credit at the bank and they want to charge me 12.5% when payments begin in January. That's triple what it is NOW!

I was like... will it go down if I pay it down to 11-12k and they said no. It actually goes up to 13.5%!

What the hell is that? I have a credit card with lower interest than that.

What can I do? This is ********.

fairly easy. i keep getting cheques from my ,mbna mastercard with promotional 1% for 3-6 months. if you got any of those, load them up to cover the bank pay fully and in the following weeks go to another bank to make a new loan at 3 or 4% or whatever it is now, cover your credit card cheques fully, and stick with the new bank loan.

if you dont have the cheques with the promotional %, try to do the credit dance till you get something small in todays market.
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Dec 28, 2006
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Saskatoon
Syne wrote: I agree that banks need to be further and further regulated. Sudden jumps in interest rate are one of the first things that need to be looked at.


Why? The OP borrowed money. There is a contract with terms. Suck it up, buttercup.
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Oct 2, 2005
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BornRuff wrote: I'm a student and I have a TD emerald card at prime+4.9%, so that is less than 12.5%.

probably on promotion. and do you have a student load of 14k? did the credit car give you 14k limit? your case doesn't apply to OP
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May 29, 2006
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There is missing information from this thread.

If the OP signed a student LOC from a bank, they are typically prime +1 written in contract. Did the OP miss payments? Is this not a student loc? More information is needed.

I have a BMO student LOC and its a very sweet product. Prime +1 since i had it, payments are interest only while in school and 1st year after school.
Newbie
Oct 8, 2010
49 posts
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Welland
rocking23nf wrote: There is missing information from this thread.

If the OP signed a student LOC from a bank, they are typically prime +1 written in contract. Did the OP miss payments? Is this not a student loc? More information is needed.

I have a BMO student LOC and its a very sweet product. Prime +1 since i had it, payments are interest only while in school and 1st year after school.

That I have Prime +1. The catch is apparently at the end when you graduate, they turn it into a personal loan for you to pay it back. It's not going to stay as a Student LOC for the rest of your life.

And no missed payments. You can't really miss payments on a Student LOC unless you're really stupid.

Yeah, it's only at a low rate for a certain amount a time after you graduate typically 6-12 months. I finished in August 2010.

They are thinking of bring it up by January already which is nuts.

I'm already in the works of switching it all to another bank. I switched banks in the middle of schooling as well. Got better deals so I switch at no cost of course. The bank makes money off of me. So basically if this bank holds out at this ridiculous rate, I'm out to another bank and I'm taking everything with me. Chequing, Savings, Credit Card and LOC. Did it before and I'll do it again.
Newbie
Oct 8, 2010
49 posts
1 upvote
Welland
lizotte_jason wrote: That I have Prime +1. The catch is apparently at the end when you graduate, they turn it into a personal loan for you to pay it back. It's not going to stay as a Student LOC for the rest of your life.

And no missed payments. You can't really miss payments on a Student LOC unless you're really stupid.

Yeah, it's only at a low rate for a certain amount a time after you graduate typically 6-12 months. I finished in August 2010.

They are thinking of bring it up by January already which is nuts.

I'm already in the works of switching it all to another bank. I switched banks in the middle of schooling as well. Got better deals so I switch at no cost of course. The bank makes money off of me. So basically if this bank holds out at this ridiculous rate, I'm out to another bank and I'm taking everything with me. Chequing, Savings, Credit Card and LOC. Did it before and I'll do it again.
I'm looking at my contract right now and it's not even a Student LOC. It's just a regular Line of Credit with no payment plan attached anywhere.
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Mar 19, 2006
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I think you were getting owned with a normal loan, and then because there's no payments on it, you're probably on a 'preferred' rate, which boosts the interest rate on deliquent accounts up a few %. You might want to check your credit score.

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