Life Loan for my dad?

[badbrian]

I wonder can anyone help me.

I am trying to make sense of this but I can't. My da is considering a life loan product but he would very likely be able to pay it off early. There is a penalty for paying it off early. As follows..
In the event of an early repayment the borrower will be liable to pay a sum to be calculated as follows. Amount x (R-R1) x Time divided by 36,500
Amount- amount amount of the balance repaid early (does this mean the amount repaid or some average of the difference between the amount repaid and what would ultimately have been repaid over the 15 year life of the loan)
R means the cost of funds for the bank for the fixed rate period as incorporated in the existing interest rate applying to the loan. R1 means the interest rate available to the bank for funds placed in the money market on the date of the early repayment. (Is there anyway of even guesstimating this for the purpose of showing my dad some projections).
Time means the number of days from the date of early repayment for the remainder of the of the relevant fixed rate period (Finally something I can work out myself)

Thanks

Brian

 

[eileen alana]

Re: Good new Life Loan product for elderly people

Would it not make more sense and be considerable cheaper for your dad to take out a personal loan from a bank or credit union especially as you say he may repay the loan early.

 

[badbrian]

Re: Good new Life Loan product for elderly people

Would it not make more sense and be considerable cheaper for your dad to take out a personal loan from a bank or credit union especially as you say he may repay the loan early.

I would assume, and I am open to correction, that he would have to make regular repayments on them. He hasn't a regular income to meet monthly repayments, but could release a lump sum in a few years time (from a different asset) that could clear the amount borrowed and the compounded interest.

 

[Madangan]

Badbrian,

I have no affiliation with them but I would recommend your Dad consider the "seniors money" products which I understand (and I am open to correction) are more flexible than some of the other Lifeloan products(e.g Bank of Ireland). I think some seniors money loans allow you to pay back without penalty. Worth checking out anyway. (I have dealt professionally with some of the lifeloan products but not seniors money so I could be totally wrong)

 

[badbrian]

Thanks Madangan. From looking at their website it would appear they do not charge an early repayment fee but we will do a more thorough investigation before he is allowed do anything rash.

Cheers
Brian