I wasn't planning to write about my housing loan experience right after the enhanced community quarantine (ECQ) last year, but I continue to receive queries until today. Because of my Facebook post on accrued interest payments in October 2020, four other clients with a similar experience from the same commercial bank asked me about the process for its reversal, so let me share my experience. If you recall, Republic Act 11494 - the Bayanihan to Recover As One Act or BARO Act - "is a is a law aimed at continuing the various government programs to deal with and help the country recover from the Covid-19 crisis. Included in the law is the relief on loans that direct banks to provide a one-time 60-day grace period for qualified loans falling due on or before December 31, 2020, without charging late payment, interest on interest and charges. Consequently, loan maturity may be extended for sixty (60) days." To my utter disbelief, my bank charged accrued interest. The bank should have followed the auto-debit procedure, which was the arrangement since I took out the loan in 2013. The funds were in my savings account, ready and available to be debited, as part of the agreement with the bank. They should not have decided on their own without confirming with me to forgo the auto-debiting procedure, and then charge me with unconscionable interest.

An accrued interest of P1,170 was added on top of the monthly amortization of P10,327 for the next 12 months. The interest for one-year amounts to P14,040, which is 45 percent of the three months loan amortization of P31,143 which is terribly unfair. It is also a clear breach of our auto-debit agreement.

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