In the process of redoing my loan, I sent a deposit to my checking account (money orders via mail with deposit slip). The bank said they used their "rights" and applied the full deposit to the principle of the loan, then proceeded to deduct the interest due from my checking account, leaving a balance of 0.06, without notifying me prior to any of these actions. Is this even legal?
Yes. This is the bank using its right to setoff. They owed you money, the deposit, and you owed them money, the loan payment. They setoff, or offset, one debt for another. This was in your original agreement with the bank when you opened your deposit account. It is likely also on your loan contract.
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Yes. This is the bank using its right to setoff. They owed you money, the deposit, and you owed them money, the loan payment. They setoff, or offset, one debt for another. This was in your original agreement with the bank when you opened your deposit account. It is likely also on your loan contract.
