10 years of interest,no statements= nasty shock!

imakepeace

10 years ago my partner needed money urgently to finish building a house, he took a loan on our endowment; he borrowed £4,000 aprox. believing that the loan would be added onto the endowment in a similar way as releasing equity in a mortgage. We have discovered recently that the loan has been being charged at 12% per year and has now become nearly £17,000!
This is a total shock because we have not received a single statement in all this time. The reason it is in the open now is because we made the enquiry.
What can we do?

dunstonh

A policy loan isnt like a personal loan or mortgage. It's designed as a short term measure to raise capital against the surrender value of the policy.

There is no reason for them to send a loan statement although you would often see reference to the loan on the policy statement.

Your partner borrowed £4,000 using what is classed as an emergency facility with interest being added to it rather than being repaid on a monthly payment. That is why it has grown to £17,000.

You should pay it off as soon as possible as its a very expensive way to borrow.