Can a bank re amortize without our permission or knowledge?

[Grinandbearit7]

We have always had loans through my husband’s 401k over the years when we need to do home improvements, etc. This was through Raytheon, now Textron. Fidelity is the bank doing the financing all these years. Out of the blue we were notified they re amortized the loan and the weekly payments have gone from around $139 per week to around $270 per week. We cannot afford this! Didn’t we sign a contract agreeing on the original payment amount? Is this legal? Thanks for your help!

 

[justalayman]

Didn’t we sign a contract agreeing on the original payment amount?

I don’t know. Did you?

 

[xylene]

Yes to your questions, but they have your permission.

You don't understand your loan, you need a lawyer to help.

 

[Grinandbearit7]

Yes to your questions, but they have your permission.

We never had anyone disclose info that this could happen. How do they have our permission? So, could they come back next year and double our payment amount again?

 

[justalayman]

You need to read the contract you signed. Nobody here can tell you what is possible under your contract because nobody here has read it.

 

[Grinandbearit7]

Ok thank you. I just thought there would be general guidelines for these types of loans. I have read the terms and it does say WE are not allowed to re amortize.

 

[xylene]

Your 401k lost value (the thing you borrowed against) and interest rates changed, AND the "now TexXon" you mention...

They can reamortize.

 

[adjusterjack]

Ok thank you. I just thought there would be general guidelines for these types of loans. I have read the terms and it does say WE are not allowed to re amortize.

You not only have to read and understand your "loan contract" but you also have to read and understand the loan terms and conditions of the 401(k) plan itself.