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Ask Dr. Don

Ask Dr. Don

Today Dr. Don discusses loan payment calculations and where to complain about bank service.

Calculating a loan payment

Dear Dr. Don,
I was given an interest rate of 15 percent on a home equity loan with a monthly payment of $356. I plugged the numbers into Bankrate's Loan Payment Calculator and I come up with a different monthly payment. The particulars of the loan are: $25,000 loan over 15 years at 15 percent. The calculator came back with a payment of $349.90. How should I resolve this? Is the Bankrate calculator correct?

Dear Clyde,
It doesn't sound like much but an extra $6.10 per month is $1,098 over the life of the loan. That $1,098 received over the next 15 years is worth $440 today. Who wants to give that up to the bank? Yes, the Bankrate calculator is correct. I also ran it on a financial calculator and duplicated the Bankrate number.

If you've got the particulars right, then either there's something else included in the monthly payment, other than principal and interest, or the lender is using a nonstandard method of calculating the interest due on the loan payment. Look to your loan agreement to find out if you're paying some type of insurance, service or origination fee that is being financed over the life of the loan or ask your lender why the payments don't match.

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With Truth-in-Lending laws, it's unlikely that the lender incorporated an insurance, service or origination fee that you didn't sign off on when you closed your loan. If you find out that you're paying for something that you feel was glossed over in the loan process, then ask the lender to correct the problem.

If the lender is a bank and can't explain to your satisfaction why the payment differs from the loan calculators then you should contact the Customer Assistance Specialists at the Office of the Comptroller of the Currency and ask them to help you work with the bank to solve the problem.

Where to complain about a bank

Dear Dr. Don,
I recently asked my Virginia based bank to send me a check for interest earned in my account over the past year. The bank took 10 days to process my request before mailing the check -- after they had told me it would be mailed the day after my request. I complained and they told me it was just one of those things. Then, and only then, they mentioned they could have wired the funds to my local bank. (Useless information to me at this point.) I wrote to them requesting they speed up this process and asked for assurance it would not happen again. It is a federally chartered bank. If I wish to write a letter of compliant, to whom do I write? Is there a bank department in Virginia? Or is there a complaint department within the Federal Reserve?
Bill's Due

Dear Bill,
You got lousy service, and it no doubt inconvenienced you in your plans to use that money, but do you really need to make a federal case out of it? A wire transfer isn't always the answer. Wire transfers are for when it absolutely, positively has to be there today. Banks typically charge between $25 and $50 for that service. Most savers will wait for the check because the wire fee really eats in to the yield on their savings. Still, it would have been nice if the client service rep had let you know that was an option.

Not dissuaded from lodging a complaint? Then the best place to start is with the Customer Assistant Specialists at the Office of the Comptroller of the Currency. The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises national banks to ensure a safe, sound and competitive banking system that supports the citizens, communities and economy of the United States, according to the OCC Mission Statement.

The State of Virginia has a Bureau of Financial Institutions as part of the Virginia State Corporation Commission. Their purview is more over state chartered financial institutions than federally chartered national banks, but they may be able to help you with your complaint.

If you'd like to make a comment on this story,
e-mail bankrate editors.

Bankrate.com writers base their answers on our editorial content and advice of financial professionals. We make no claims or representations about the accuracy, timeliness or completeness of such content, advice or the answers provided to you. Our content, advice and answers are intended only to assist you with your financial decisions. However, by its nature such information is broad in scope. Your financial situation is unique, and our content, advice and answers may not be appropriate for your situation. Accordingly, we recommend that you get different opinions and seek the advice of your accountant and other financial advisers before making any final decisions or implementing any financial or investment strategy.

--Posted: Sept. 29, 2000

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