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Ok Let me restart.
When we took out business loan in 2007( 15 years term) there head of terms were 2% over the base rate because at that time base rate was 5.25%. The allied Irish worked out our monthly instalment at £2815.
Since 2007 there are many bank of england base rate reduction but allied irish bank has not bought our monthly instalment in line with reduced bank of england base rate.
We are asking them since 2010 to bring the monthly instalment in line with reduced base rate.
To date they haven't done this.
IN Feb, I wrote to them saying that if they will not do that I will stop paying all together . Then they wrote back to me saying they are not obliged to bring the monthly instalment in line with base rate- that is discretionary.
If we want lower payment they will draw up new 8 year contract and they will charge 4% over the Libro base instead of 2% which we are currently paying now.
In my view this is wrong, since we are not asking for new loan , all we are asking is what ever the remainder of the loan is , we should be paying monthly instalment according to agreed term at inception- which was 2% over the base rate for 180 months.
Does it make a sense?
Hi I cant understand why they cant reduce the monthly payment. It says very clearly in the offer letter that rate of interest = bank of england base rate plus 2%. Surely the amount we are now paying is not correct and its much more.
Could you explain why can't we force them to adhere to loan term term.
Many thanks for your reply.
Do you think I should send you the agreement form so that you can assess the situation properly?