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Old 05-01-2018, 08:42 AM   #1
dubaibudy
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Default Loan transfer/ switching between banks

I am having a personal loan of 160000 (outstanding) in UAE with a bank1 where my salary is credited to the same bank1 account.

Because of financial commitment, I am required to take a top-up loan on my existing loan with bank1.

When I approached Bank1 for the top-up they have denied to provide the required top-up amount and are quoting for a higher rate of interest for the top-up amount offered.

I searched for options in the market to resolve my situation and approached Bank2, which has agreed to provide the required top-up loan amount with the less rate of interest compared to Bank1. Bank2 agreed to grant be loan if I get the liability & clearance letter from bank1.

I have signed loan application in bank2 along with providing the account payee cheque in the name of bank2.

When I have requested for liability letter with bank1 they have provided much better offer compared to bank2. I am saving around 6 to 7 thousand AED if I go with Bank1.

I made my mind to go with bank1 which my parent bank as I am saving good money.

Within this time, my loan amount in bank2 is credited to my bank2 loan account but not yet released the funds to my My bank2 general account. My account is also debited with some negative charges for processing and insurance fee for the loan.

The sales representative of bank2 is threatening me that I need to pay the charges to bank2(who will chase me to collect) even if I go with bank1 since I signed the bank2 loan application and my Al Etihad Credit Bureau report will be blacklisted. The sales representative recommend resolving the issue by getting the liability letter from bank1.

The bank1 executive gives me confidence that nothing such happen but cannot get confidence in the verbal assurance provided since I am the one who has to face the consequences if anything goes wrong.

Please advise me if it is correct that there will be some charges/penalty I have to pay to Bank2 if I go with Bank1.

Thanks for your time and please provide me your advice.
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Old 05-01-2018, 06:38 PM   #2
AFFA
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Default Re: Loan transfer/ switching between banks

I wish to inform you that your loan agreement with bank 2 may determine your rights. You may argue that as no funds were released into your general bank account thus no amount has been provided to you in loan. Hence you may argue that you should not be held liable for anything. You may seek court order declaring you are not liable for anything to bank 2 and may thus protect your rights.

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Old 05-02-2018, 10:03 AM   #3
Lexus
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Default Re: Loan transfer/ switching between banks

In this regard the second bank could not take any legal action against you as you had not signed documents regarding receipt of the loan amount and had not withdrawn the loan amount from the bank. The sales representative of the second bank is only threatening you to pay the processing charge.
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Old 05-07-2018, 10:24 PM   #4
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Are you taking a salary transfer loan from bank 2?

In that case, they will process the amount only after giving the salary transfer letter. Most cases, the companies will issue this letter only after providing the liability clearance letter from bank1.

If such process didn’t happen, you don’t have to worry. The sales executives will be responsible, if you are withdrawing from the application process. They might have done fines or they have to pay that processing fee fly themselves. That’s why they are threatening you.

Hope it’s clear

Quote:
Originally Posted by dubaibudy View Post
I am having a personal loan of 160000 (outstanding) in UAE with a bank1 where my salary is credited to the same bank1 account.

Because of financial commitment, I am required to take a top-up loan on my existing loan with bank1.

When I approached Bank1 for the top-up they have denied to provide the required top-up amount and are quoting for a higher rate of interest for the top-up amount offered.

I searched for options in the market to resolve my situation and approached Bank2, which has agreed to provide the required top-up loan amount with the less rate of interest compared to Bank1. Bank2 agreed to grant be loan if I get the liability & clearance letter from bank1.

I have signed loan application in bank2 along with providing the account payee cheque in the name of bank2.

When I have requested for liability letter with bank1 they have provided much better offer compared to bank2. I am saving around 6 to 7 thousand AED if I go with Bank1.

I made my mind to go with bank1 which my parent bank as I am saving good money.

Within this time, my loan amount in bank2 is credited to my bank2 loan account but not yet released the funds to my My bank2 general account. My account is also debited with some negative charges for processing and insurance fee for the loan.

The sales representative of bank2 is threatening me that I need to pay the charges to bank2(who will chase me to collect) even if I go with bank1 since I signed the bank2 loan application and my Al Etihad Credit Bureau report will be blacklisted. The sales representative recommend resolving the issue by getting the liability letter from bank1.

The bank1 executive gives me confidence that nothing such happen but cannot get confidence in the verbal assurance provided since I am the one who has to face the consequences if anything goes wrong.

Please advise me if it is correct that there will be some charges/penalty I have to pay to Bank2 if I go with Bank1.

Thanks for your time and please provide me your advice.
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Old 05-14-2018, 05:33 AM   #5
dubaibudy
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Default Re: Loan transfer/ switching between banks

Dear All,

Thanks for the responses.

Finally, I received top-up loan from Bank1.

I am trying to cancel my loan account in bank 2 but there is no support from the sales team as I have not gone with them.

I visited the Bank2 branch to resolve this issue but they said it should be solved only through the sales team.

I have also written to customer care and raised a request to cancel my loan account but there is no response.

I received a call from sales team manager of bank 2 that there will be some charges for canceling loan account but this is on call conversation. I have no written communication that there will be some charges for this.

I want to close the loan account as it shows that my loam EMI instalment to be paid from June 2018 in bank 2 though the amount is not credited to my account.

I am in a tensed mode to close this issue ASAP. Please suggest me any solution to deal with bank 2 to close my loan account.
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