Bank entitled to recover debt calculated under agreed loan terms

Categories:

Lending, Fees, charges & rates,

Summary:

In October 2020, the bank consolidated Brian’s two car loans into one loan. The original loans had been taken out in 2018 and were secured by two vehicles. After Brian lost his job, the bank refinanced the loan in January 2024 to reduce his regular repayments. By March 2026, the loan balance had increased to $21,016. Brian said the bank had not justified the balance owing. He said his own calculations showed he should have owed much less.

Published:

August 2026

Our investigation

We reviewed all relevant loan agreements and loan statements dating back to 2018. Brian had used online calculators to dispute the amount of money he owed to the bank. We found that it did not form a reliable or accurate basis upon which to dispute the debt. His calculations used the incorrect interest rate, and also did not account for missed repayments, default interest, dishonour fees or the refinance fee.

As for whether the bank had applied the loan terms correctly, the statements showed Brian had missed repayments over significant periods. This meant the balance did not reduce as it would have done if all repayments had been made. The higher balance then continued to accrue interest.

We found no evidence that the bank made an error in the balance due to be repaid. The bank was entitled to take recovery action under the loan and security agreement.