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#1958360 - 08/29/14 08:32 PM Loan Paid Off in 2012???
opsbanker Offline
Junior Member
Joined: Nov 2008
Posts: 33
A borrower got a car loan with us in 2007 at 7% interest. They paid this loan off in good standing in May 2012.

We received a phone call from the borrower today, stating that they were on active duty back in 2007 and want us to refund them the difference in interest rate for the time they were on active duty.

I am unsure when they were discharged from active duty. Assuming they were released from active duty within the last 6 months, do we have to provide these borrowers a refund on a loan that paid off two years ago?

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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#1958370 - 08/29/14 08:48 PM Re: Loan Paid Off in 2012??? opsbanker
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
They have 180 days to request the rate relief from the date of the end of their active duty. All relief is retro-active back to the beginning date of their active duty.

In this case, because they've waited 2 years since payoff of the loan, I would want documentation of their active duty status in order to verify the following:

1. If they were active in 2007 were they active at the time they obtained the loan? If so they are not entitled to the rate relief.

2. Is their request within 180 days of the end of their active duty.

3. The continuity of their active duty. They are only entitled to relief for the term of the active duty. If active duty was from 8/07 to 8/08 and then again from 8/09 to 8/10 then those two stretches are the only time they are entitled to the rate reduction.

If they are entitled to the rate reduction then you will have to make the appropriate refunds.

_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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