Consumer complaint received 2022-12-05
Company: PNC Bank N.A.
State: VA
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Need information about your loan balance or loan terms

Complaint:
I have a XXXX XXXX Loan through XXXX XXXX XXXX ( XXXX ) that is serviced by PNC Bank. It is a {$15000.00} loan. The loan was originally disbursed on XX/XX/XXXX. I've paid {$8600.00} towards principal and {$7000.00} towards interest, as of today ( XX/XX/XXXX ). My current principal balance is {$7200.00}. I am not in default and I have auto-payment enabled. 

I just noticed last night ( XX/XX/XXXX ) that, XXXX months ago ( XX/XX/XXXX ), my account was issued a letter stating an incoming increase in interest rate, from 5.79 % to 7.23 %- which is fine, as my promissory note provides a standard/variable rate. However, at the same time, my monthly payment was LOWERED from {$140.00} ( with a 5.79 % rate ) to {$130.00} ( with a 7.23 % rate ). My original monthly payment in XXXX was {$130.00} and slowly increased through time, eventually becoming {$140.00} in XXXX. Again, this is fine - no qualms with this. However, PNC adjusted my loan with a new payoff date ( 68 month term, finishing XX/XX/XXXX ) without any disclosure, notice, signature, or communication otherwise, absent a letter posted to my loan account inbox. 

Is the monthly payment DECREASE in conjunction with an interest rate hike not against federal law? I know payments can *increase* due to an interest rate hike - that makes sense. To lower your monthly payment, however, in conjunction with an interest rate hike, literally extends loan repayments by years. I did not agree to this change, nor was I mailed anything reflecting the interest rate change or the decrease in monthly payment. As mentioned, the interest rate change I have no gripes with - that's per the terms of the loan. Lowering my monthly payment, without informing me, and arbitrarily extending the life of the loan, provides me qualms. 

If a lender is able to increase your interest rate ( which lowers the amount being contributed to principal with no monthly payment amount change ) and is able to lower your monthly payment ( which lowers the amount being contributed to principal ), at the same time ( which further decreases the amount being portioned to principal - XXXX decrease due to interest hike, another decrease due to lower payments ) without permission or otherwise, does that not mean the lender can indefinitely increase the length of loan payoff? 

The lender already increased the amount of time it'll take me to pay off the loan ( minimum monthly payments ) with the interest rate increase. Yet, they further extend the amount of time it'll take to pay off because they now want to... charge less. For what purpose would they charge someone a lower monthly payment, in conjunction with an interest rate increase, other than to purposefully extend the life of the loan, thereby solely extending the amount of profit made from more interest payments? Extending the life of a loan only benefits the lender as the only increase is interest payments. 

What is to stop the lender from doing this again in 3 years? What if they again raise my interest rate, and lower my monthly payment in conjunction. At that point, can they not have a new payoff schedule set to complete in XXXX, instead of the current XXXX? And what if they were to do it again, 3 years after that? It is an *indefinite* extension of the life of the loan. 

As far as I know, no lender, in any service, can do this. If you have a variable rate mortgage, when the interest rate increases, the mortgage lender can not arbitrarily lower the borrower 's monthly payment at the same time. 

If I am mistaken on this, I apologize for wasting the time of whomever is assigned to handle this complaint. However, I do believe that no lender can lower your principal amount contribution in conjunction with an interest rate increase, without proper notice, or obtaining signature in change of payment details. 

Again, the interest rate increase is not the problem here- it is the arbitrary lowering of my amount being contributed to principal in conjunction with increase in interest so as to extend the loan indefinitely. 

At the risk of sounding like a XXXXXXXX XXXX : Are indefinite loans not against the fabric of society? There is no conceivable way that this can be allowed by federal law. 

I've attached XXXX payment stubs to prove my loan figures mentioned above. XXXX from XXXX and XXXX from XXXX, XXXX. I've asked for a copy of my promissory note, and XXXX informed they are mailing it to me- I can provide that to you as well, once received ( or anything else you may ever need - please don't hesitate to ask ).

Company response to consumer: Closed with explanation