Worth getting a loan to receive pension as a lump-sum?

ellens · 4 August 2006 at 10:14AM

Hello,

I will shortly be recieving a protected rights pension worth about £32,000. paid to me about £450- £600 monthly.

As I would rather have a lump sum, I approached my bank, Royal Bank Of Scotland for a loan. I have been turned down by other low rate loan companys for credit reasons.(rates as low as 6.5%) My bank is willing to give me 7.9% over 7 years for £21,000. Is this a good idea do you think?

Also, I have been told by the bank rep. that their "loan sale" ends tomorrow, Friday, after which the A.P.R. will be higher? therefore I must decied tomorrow. Is this correct?

Any better ideas to get a lump sum? Must be simple as I am simple.

Thanking you in anticipation

Ellen

EdInvestor · 4 August 2006 at 12:32PM

I will shortly be recieving a protected rights pension worth about £32,000. paid to me about £450- £600 monthly.

I would suggest you check this figure, which seems too high. A fund of that size would be more likely to pay about 160 per month, depending on your age, before tax.

Debt_Free_Chick · 4 August 2006 at 1:33PM

I'm a bit confused ... sorry.

What do you need a lump sum for?

cheerfulcat · 4 August 2006 at 3:06PM

ellens wrote:

Also, I have been told by the bank rep. that their "loan sale" ends tomorrow, Friday,

I'm confused, too; tomorrow is Saturday.

EdInvestor · 4 August 2006 at 6:25PM

I had assumed ellens planned to take a loan out for a lump sum, which would then be repaid from the pension income.

But I agree it seems a rather misconceived plan, not least because the numbers don't seem to add up.

ellens · 8 August 2006 at 11:36PM

Thank you all for your helpful replies. I warned you I was simple!

Worth getting a loan to receive pension as a lump-sum?

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