Loans for over 70's

millwall36

My mother wants to take out a secured loan for £5000 and is a homeowner with no mortgage but she is 71 years old.

Any advice?

TonyMMM

What income does she have to support the loan , what credit history does she have, and why secured ?

millwall36

Hi,

It would be secured against her house. not sure about income, will check

AMILLIONDOLLARS

why not take out an unsecured loan for the amount? Seems silly to put her house on the line for such a small amount. If your mother is struggling with money, it may be an idea for her the down-size and use the surplus cash to live on instead of borrowing. At 71, if she can't support a loan, no one is going to lend her the money, unless they really want her house!

AMD

millwall36

Thanks for your reply milliondollars but isn't an unsecured loan going to be horrendous interest?

Also, her monthly income is a minimum of £500

AMILLIONDOLLARS

Most not all secured loans are normally for any amount over 10K, on top of that the rates can be variable, meaning they can go either up or down at the lenders discretion, please the loan period can stretch to anything upto 25years!. Look around the website, put in searchs for Ocean Finance, Firstplus (no longer trading) and you'll see what sort of a heartache your mother could be in for. If your Mother could get a fixed rate (meaning the interest is set in stone) loan she would be far better off.

If you don't mind my asking, why does she want the loan in the first place, it would give people help in giving you the right advice.

AMD

millwall36

She would be taking the loan out for her brother who has debt problems and bad credit but will be making the repayments direct to her until his credit rating goes back up

AMILLIONDOLLARS

millwall36 wrote: »

She would be taking the loan out for her brother who has debt problems and bad credit but will be making the repayments direct to her until his credit rating goes back up

Not a good idea have you seen the thread about lending to family and friends:

https://forums.moneysavingexpert.com/discussion/76953

Here's a taster from Stockmarket -Diva - quoted from the above link:

I'm sorry, I didn't read the beginning of this thread and hope its applicable to what i'm going to write now.

I lent my sister and her husband a large amount of money at a very low monthly repayment because she purported to be in alot of problems financially...thought she was going to lose her house etc.

No problems with them repaying it but immediately they got the money they booked numerous holidays, bought 2 cars, had garden landscaped, etc etc. I was mortified but at the same time it was my Sister and I don't think I wanted to disbelieve her.

After a couple of years the spending was getting ridiculous and I thought that if they were okay now she could get a normal loan and pay all my money back. This was partly a safety measure becuase I was worried that if she was getting into more debt and ended up bankrupt, then I would never get the money back and my daughters would need it eventually.

Well, guess what my family are like. My Father advised her to tell me that I'd have to take her to Court to get the money back . Thats family loyalty for you.

I not only have lost a sister but my parents too. How can I ever believe that they have my best interests at heart.

Because he has proved that he is no good with money, what will happen to your mother when he doesn't pay her back after a couple of months? will you be able to make the payments on her behalf then?

If she is going to lend him this money, then I would suggest that she employs a solicitor to draw up a contract setting out the terms of this loan. So should he defaults, she can take him to court. Best advice I would give is, get it in writing, better still if she can't afford to lose this money, then don' loan it at all, especially as she could lose her house in process.

AMD

millwall36

Thanks for that AMD, was going to get some paparwork drawn up for her with a solicitor.

Still have no idea what lender to go to though, can you help?

AMILLIONDOLLARS

No one is going to give your 71 year old mother a secured loan for £5k on an approx income of £500 per month. That's classified as irresponsible lending. Get your uncle to join this board and sign in with the Debt Free Wanna Be Forum!!

AMD

euronorris

What does the brother need the loan for?

Edit: Why can't he save? And, if it's to consolidate his debts, then it suggests that he would most likely still struggle to keep up the payments. In which case, an income and expenditure overhaul would be best, or get him to talk to one of the debt charities like CCCS.