minimum repayments and redraw

[nose]

On a PI loan , extra repayments are made and the balance comes down. Bank says they wont reduce the minimum repayment to reflect what is owing unless redraw is removed.
Is it legal?
in contract the only thing I can see is that they can remove redraw at any time, which I never liked in the first place but was told their contract was not negotiable. Now they are forcing me to make repayments based on the original amount of the loan. They say they will only charge interest on the loan balance not on the original loan. According to them , even if I am down to the last $10 , I will still pay the higher repayment amount .
Can they blackmail me with redraw removal threat?

thanks

 

[Rod]

Yes. But it is not blackmail. They are simply standing by the terms of the original contract. It is at their discretion whether to change payments, not yours.

If you are not happy, obtain another loan from another bank and payout this one.

 

[Tripe]

Sounds right

If you borrow 550k over 20 years, and payback 500k in 12 months time, you still have to payback the same weekly instalments.

By paying extra, all you have done is decrease the time frame until the loan is paid out, it has nothing to do with decreasing weekly payments.


Your only option is to reduce your loan amount, if you are 50k in front, then ask the bank to reduce your loan Amount to 500k (over 20 years), this would allow cheaper weekly repayments. However, you would lose the ability to redraw funds and you may have to pay some variation fees