Prepaid interest - not holding my breath!

[wylie]

Well... money has been taken from our account for two of the four loans we are prepaying this year. Called our broker today who checked with our bank and said the other two were scheduled to be taken out on 22nd. Still not done. Probably in somebody's "to do" basket.

He suggests it will probably be done overnight and suggests we wait until tomorrow morning and then get on the phones... again!!!

Seriously, this is the third year where we have had to chase things up and pretty much micro-manage the bank. We did look at going away this week, but the major reason we changed dates was because I just "knew" this would happen... again. I knew I would need to be here to get it sorted... again!

(At least it is better than the year our bank got seven loan prepayment requests from us at the same time and only bothered to process two of them .)

Anybody else having trouble with banks and prepayments? My poodle could probably get it right more often than the staff who are supposed to know what they are doing.

 

[jonmardell]

this has come up a few time in the past with a few different lenders. Because of the time constraints you just have to be on top of them.

Well... money has been taken from our account for two of the four loans we are prepaying this year. Called our broker today who checked with our bank and said the other two were scheduled to be taken out on 22nd. Still not done. Probably in somebody's "to do" basket.

He suggests it will probably be done overnight and suggests we wait until tomorrow morning and then get on the phones... again!!!

Seriously, this is the third year where we have had to chase things up and pretty much micro-manage the bank. We did look at going away this week, but the major reason we changed dates was because I just "knew" this would happen... again. I knew I would need to be here to get it sorted... again!

(At least it is better than the year our bank got seven loan prepayment requests from us at the same time and only bothered to process two of them .)

Anybody else having trouble with banks and prepayments? My poodle could probably get it right more often than the staff who are supposed to know what they are doing.

 

[wylie]

this has come up a few time in the past with a few different lenders. Because of the time constraints you just have to be on top of them.

Tell me about it . I now keep the last week of every June free for hounding the bank .

 

[Rolf Latham]

Tell me about it . I now keep the last week of every June free for hounding the bank .

dont leave it till the end of the month : )

We encourage our IOIA users to go early in June the first time they do it, so the anniversary isnt such a stress

ta
rolf

 

[boomtown]

I find I get the best results by riding the bank like it is a small pony.

 

[pieman]

One of the few benefits of a private banker - they remind you, but otherwise takes a fair amount of time to get the paper work sorted

 

[wylie]

dont leave it till the end of the month : )

We encourage our IOIA users to go early in June the first time they do it, so the anniversary isnt such a stress

ta
rolf

This was sorted out at the end of May. At least we started the process mid May and it was all sorted by the end of May. Documents were signed and back with the bank by early June. No matter how early we get this organised each year, the money is scheduled to go from our account to the loan usually around the 20th June or the next few days. The missing two loans should have gone over 22nd June as per the paperwork. They have no excuse except being bl00dy hopeless .

 

[Ausprop]

can you just draw a bank cheque and go and hand it to them?

 

[wylie]

Just checked banking and the other two loan interest payments transferred overnight. Phew!!!

 

[pieman]

can you just draw a bank cheque and go and hand it to them?

Unfortunately no, its the whole signed contract offer and acceptance that has to occur.

 

[Rolf Latham]

This was sorted out at the end of May. At least we started the process mid May and it was all sorted by the end of May. Documents were signed and back with the bank by early June. No matter how early we get this organised each year, the money is scheduled to go from our account to the loan usually around the 20th June or the next few days. The missing two loans should have gone over 22nd June as per the paperwork. They have no excuse except being bl00dy hopeless .

just its not as important to them as it is for u : )

They can make it happen real quick when they need to

ta'rolf

 

[Terry_w]

Just checked banking and the other two loan interest payments transferred overnight. Phew!!!

Wow, one day to spare!

 

[tvadera]

It really helps to have good relationship with your banker. Banker came to my office, got all the paperwork, signed them on the spot, banker personally went to Operations team to get the contract imaged and then followed up with the Drawdown team.

Phone call to the banker: 22/06 (Fri)
Drawdown done: 26/06 (Tues)

Regards,
TV

 

[Ausprop]

It really helps to have good relationship with your banker. Banker came to my office, got all the paperwork, signed them on the spot, banker personally went to Operations team to get the contract imaged and then followed up with the Drawdown team.

Phone call to the banker: 22/06 (Fri)
Drawdown done: 26/06 (Tues)

Regards,
TV

my banker can take months to do things, but his signing authority is awesome so i put up with it. seriously frustrating tho

 

[Dazz]

I find I get the best results by riding the bank like it is a small pony.

Exactly right.


I'm having this trouble at the mo' wylie.


They've booked it in for transferring tomorrow...nothing like leaving it to the very last minute.


I asked them to do it Tuesday, to allow a few days just in case the secretary / dog / computer / assistant / whatever fell asleep broke down went haywire.


Still haven't got it done yet.


The Banker knows he is in for some physical pain if something goes wrong tomorrow. We actually spoke this afetrnoon about what would be missing from his anatomy if there was any failure whatsoever.


Tried to organise this March for first week in June. As usual, the Bank dragged their feet to the very last day.

 

[Nemo30]

Can someone explain why you pay the interest in advance? (sorry, probably a really stupid question)

I understand the tax advantage of paying before the end of the financial year, but I dont understand why you would do this every year.

Do you make a lump sum payment each June and then not pay anymore interest until the next June? Or are you in effect making an extra payment?

 

[Terry_w]

Can someone explain why you pay the interest in advance? (sorry, probably a really stupid question)

I understand the tax advantage of paying before the end of the financial year, but I dont understand why you would do this every year.

Do you make a lump sum payment each June and then not pay anymore interest until the next June? Or are you in effect making an extra payment?

Its done to bring forward deductions.

Someone may want to do this for several reasons:
1. Higher than usual income this year - such as capital gain.
2. Expecting a lower income next year, so less tax back. May stop working or maternity leave etc.

But what often happens is they bring the deduction forward and then the next year they will have a large cashflow positive result from their property and maybe a higher than expected income from work. So with no interest to claim against they need to bring forward the next years interest by prepaying and this can continue for a number of years.

 

[tvadera]

I am holding my breath for super contribution. I want to claim deduction for member contribution.

called my super company on monday, they said it takes 1 day for funds to be reflected. I did the transfer on wednesday (EFT transfer), still payment is not reflected.

Just concerned if super company dont get the payment tomorrow, can I still claim the deduction because I have transferred it on 27/06

Regards,

 

[pieman]

Its done to bring forward deductions.

Someone may want to do this for several reasons:
1. Higher than usual income this year - such as capital gain.
2. Expecting a lower income next year, so less tax back. May stop working or maternity leave etc.
.

I'm a contractor so expect ill have a quiet year at some stage but I started this prepaid interest caper 5 years ago and have to keep doing it as I've had heaps of work on. Not a problem really.

 

[pieman]

I am holding my breath for super contribution. I want to claim deduction for member contribution.

called my super company on monday, they said it takes 1 day for funds to be reflected. I did the transfer on wednesday (EFT transfer), still payment is not reflected.

Just concerned if super company dont get the payment tomorrow, can I still claim the deduction because I have transferred it on 27/06

Regards,

As I understand it from my accountant wife, it has to hit their account before 1/7