I listened to yesterday's show on the radio player:-
Liveline (rte.ie)
I should point out that on another thread on this forum I compared "Life Loans" to giving sweets to a child and for the record I am against such loans. The following is my opinion of what happened on the show:-
I have always said these so called Life Loans were bad products and I think I have average intelligence. But, the vulnerability, future health etc of applicants appears (to me) to be ignored for financial institution profit. Such loans were withdrawn in 2002 and launched again in 2020. That in itself tells a story. Bank of Ireland failed to supply a spokesperson which in itself suggests that "independents" should give such radio shows a wide berth. Why defend the Bank of Ireland when it won't defend itself?
I'll give you a simple example of how these loans, properly regulated and with education of borrowers, can be beneficial.
My mother lives in London, on a council estate, in quite a swanky part of the capital. She is a council tenant so can't avail of the scheme. She does benefit from the tenancy, in that any substantial maintenance is paid by the landlord ( the council). Her next door neighbour bought the house from the council in the 1980's and owns the property, mortgage free.
The neighbour is living on the basic state pension, about 180 pounds a week. She gets some help for winter fuel bills.
Other than that she has very little income. Her children are living in London, servicing huge mortgages, so they can't help her much. So she lives in relative penury, week to week. Unable to upgrade furniture, or household items. No holidays or meals out. Not much in the way of luxury.
However, her house is worth, approx 700k on the market. She's sitting on a gold mine.
In the UK there are dozens of products available to such pensioners. The one she took out, with the full knowledge of her children, is a Retirment Drawdown loan. This product gives her a lump sum, say 200k, which she can draw down at any time. She can draw down a small amount, or the whole lot, or take a regular chunk each month. She doesn't pay interest on anything she doesn't drawdown. The interest on anything she does drawdown can be paid off each year, or it can be left to rollover until she dies or vacates the property.
I don't know the interest rate, but the adverts in the UK , quote rates as low as 1.8%.
She is never going to qualify for any other kind of loan, because she doesn't have the income to service a loan.
I fail to see what is wrong with such products.
