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    1 Reply Latest reply on Feb 18, 2015 10:51 AM by Milleisen

    My current bank is killing us in fees and interest!

    jbeavers4 Wayfarer

      We are a construction company that has been in business for 20+ years.  In 2009 our business took a big dive, right after we incurred heavy debt for a new building that was immediately not worth what we owed on it, our bank jacked up our interest and are charging us fees on everything!  As a result, we ended up being late on payments.  We are so much better now and are caught up on everything but are having a difficult time getting financing to get away from our current bank and get our interest rates lowered.  I've been to our bank with a plan on how we (they and us) can reduce our debt and lower our interest rates and his words were "Why should I?"  In other words, they are making hundreds of thousands of dollars in interest on us so aren't going to do anything to help us!  Other businesses who just walked away from everything are back up and running and doing great!  Why can't we find any help when we have been in business for so long and have certainly proved that we aren't walking away from our obligations?

        • Re: My current bank is killing us in fees and interest!
          Milleisen Scout

          I think your banker summed it up pretty well.  If the bank knows you don't have any alternatives, they probably don't have an incentive to reduce your rate.  They would probably argue that you agreed to the current rate, so the first solution shouldn't be for the bank to make less money.  With that said, if you are severely under water on the property, you could try to argue that if you don't get some help, you are concerned about being able to make the payment, and the bank would ultimately lost money on the deal.  Your most likely scenario would be to extend the loan term to lower the payments, which would result in you actually paying more interest over the life of the loan, but at least it would be a lower payment.


          It's admirable that you stuck it out when so many others simply walked away.  Unfortunately, when it comes to credit and lending, banks care more about cash flow and collateral when considering a refinance of the debt.  If the property is still under water, it will be hard for another lender to help you since a default would likely result in them losing money.