Splitting Loans- LOC change

We have LOC's with Westpac and in the past , if you wanted to change them , you'd just ring up and they'd split them , eg 400 K into a 150 K loan and a 250 loan .

BUT NOW ...

We've just been told under the new rules , they're happy to cut the limit of one down to 250 , but if we want a new facility we have to apply for a new loan LOC of 150k and qualify under the new guidelines .

SIGH ....

@Rolf Latham , @Property Twins @Marty McDonald

Cliff

 

Why do you want a LOC? Westpacs term loan can be used like a LOC. The last time I split a term loan was about 6 months ago and it was very easy, I haven't tried lately so things may have changed for these too, but generally LOCs are more of an issue for the banks.

 

We have existing LOC's we have used for their flexibilty , so asking why I want one doesn't actually address the point ......

We have paid them down , used them to buy properties for cash in the GFC when no one else has funds . They have been a useful tool . My understanding is that if you pay down a loan , they close the facility .Well that's the case when we set it up around 15 yeas ago .

Cliff

 

It doesn't address your point of not being able to split, but you may not actually need a LOC product.

However I am not sure whether it is still possible to split a term IO with westpac like it was before.
This new policy may just apply to LOCs or it may apply to all loan products - something you might want to find out.

 

Ive put a call into westpac to see whats what now. Waiting for call back.

 

Terry , for the third time

Given it's something I haven't seen mentioned , the main reason I posted was making other people aware of a possible change .

Something many people might be interested in.

In our situation it means we have to allocate things within the LOC to different entities within MYOB , but that's something that we do with other loans.

Cliff

 

Sorry Cliff played phone tag with my Westpac bdm yesterday and just tried him again now and his voicemail is saying he is away today. Hopefully Rolf has more luck.

 

Its funny how you get different answers. Last week i asked the same question to 2 different westpac bdms and got opposite answers. I looked at the policy and it contradicted itself so I understand where they are coming from.

 

What is RRIL/RRHL ?

 

Thats not uncommon.

One answer from BDM and another from the helpline then another when it gets processed.

Keeps things "interesting".

 

Frustrating though , though it is “ reassuring “ that we got the same answer.

Now we’ll have another spread sheet to allocate interests to different entities .

Cliff

 

WBC is a bit mess ATM, I have one cash out application with WBC, they have given me 4 different answers so far, I think they are having some new staff, not understanding their own policies well.

 

We tried to do it over the phone and in the past you could do that . The person who was putting it through wasn’t aware of any change and was entering all the info in but the system wasn’t giving them the option to do it . They checked with their supervisor who checked further up the totem pole who told them it had changed , so it certainly isn’t something anyone seemed to be aware of . Not even the MB’s here and they know this stuff better than most .

My only thought was there might be different rules for the general mugs vs MB driven requests .

Cliff

 

Unlikely.