Debt assistance for my mother (EURIBOR)

Hello everyone,

my question might be a bit off-topic and basically does not directly relate to construction financing. After my mother (a retiree) was diagnosed with severe cancer six months ago, I am trying to get her debts and finances back on track because she is just barely making ends meet.

One of the countless issues is a remaining debt she has with the bank. She still has to pay off about 17,000 euros and is paying 190 euros per month (since 2003). Every 3 months, 350 euros are deducted again (interest). I have absolutely no knowledge about this, but someone told me that this is a very high interest rate by today's standards and that she has a loan with a variable interest rate (EURIBOR) (details attached) and the bank actually has to adjust the interest to this (I do not know what this means). In any case, the lady at the bank said that this is not true and that the 350 euros every 3 months is correct and even if the EURIBOR goes down it does not affect my mother’s interest, is that correct? I read in a forum that the interest rates should be adjusted, the bank did not do this and he is now suing. Could you maybe explain to me how this EURIBOR value quantitatively affects the interest she has to pay, because if my mother has to pay more when EURIBOR rises, it really can’t be that she has been paying the same interest since 2003 (how do you actually calculate the current interest you pay per month from what you pay and what interest is charged every 3 months)? I kept pressing the lady at the bank until she suggested refinancing, meaning to dissolve the current loan and grant a new one with a lower interest rate. But I am afraid that I might somehow get my mother into even bigger trouble, although I just want to help her somehow. Do I have to watch out for something, e.g. that a confirmation comes first that the new loan is really granted before she pays off the current one? Then maybe she won’t get a new loan anymore (like at the KSK where they said the risk is too high that she will die soon).

I don’t know what to do and I don’t understand this whole topic at all. Maybe you can help me even if it’s not directly related to building. That would really be nice and it would really help me.

Best regards
Martina.

If your information is correct, something really smells fishy. Do you have the account statements from the past years?

The Euribor has decreased by about 2 percentage points since 2003 (after a temporary increase). The current interest rate should therefore be somewhere around 5.5% (which may still be too high depending on the collateral). With an annuity of 2,300 euros per year and 1,400 euros in interest, it will still take at least 15 years to repay the loan anyway. A new (better) (fixed interest rate) offer with a similar term (at the same bank) therefore cannot necessarily be disadvantageous.

But overall, this is not a topic for a forum like this. In my opinion, a specialist lawyer for credit law should take care of this. At the very least, you should consider spending 300 euros for an initial consultation if what I suspect proves true.

Can you send me the account statements via PN? In particular, I am interested in the first year, then 2008 and 2009, and the last year.

A different question. Is there a possibility within the family circle to take out a small loan and repay the €17,000? That way, the mother could service it.

Consumer advice center would also be an option.

Hello everyone, thank you for your help. I will probably hire a lawyer, but I have already taken two for other matters and a tax advisor. That has already cost me 2000 euros. Therefore, I am a bit short on money and have to wait until next month. So here is an excerpt from the account from 2014, for example, which I just had at hand. Maybe you could just tell me if something looks suspicious... It may be that my mother has legal protection insurance, maybe I can inquire there.

Has the interest rate really never been adjusted since 2003 and has the agreement initially posted really never been changed since then?

Wow... at least to the VBZ. However, I would consider a specialist lawyer much better.

The agreed interest rate is about Euribor + 5.5%, today approximately -0.4 + 5.5 = 5.1% (and not 7.5%)

Still too expensive, but nevertheless.

Please also consider that the interest rate was at 10.5% at times (2008). So the changes work in both directions!