Hi,

I am just dealing with the estate of a recently deceased elderly relative.

Since her death it has emerged that a year ago at the age of 76 she took out
a personal loan from her high street bank of £20k.

We are currently in the process of applying for probate, so as yet we are
not sure as to what the actual loan agreement contains, and whether it will
have to be repaid out of her estate.

It was not charged against her house which she owned outright and her only
income was her state pension. It seems rather irresponsible of them to give
her such a loan at her age.

Would such a loan constitute misselling by the bank?

TIA,

Steve

Jeremy Pinwhistle wrote:
Hi,

I am just dealing with the estate of a recently deceased elderly relative.

Since her death it has emerged that a year ago at the age of 76 she took out
a personal loan from her high street bank of £20k.

We are currently in the process of applying for probate, so as yet we are
not sure as to what the actual loan agreement contains, and whether it will
have to be repaid out of her estate.

Unless there was valid life insurance tied to it, I would assume it has
to be repaid. I think any life insurance would have been very steep!


It was not charged against her house which she owned outright and her only
income was her state pension. It seems rather irresponsible of them to give
her such a loan at her age.

That might depend on how the terms compared with a secured loan. They
might have taken the view that there was so little chance of default
that it wasn't worth the cost of formally securing it, especially if she
was in poor health, so it was likely that it would get repaid soon.

Thanks for your reply David.
The loan was taken out over 7 years, meaning that she would have been 84 by
the time she had paid it off.
It seemed irresponsible of a bank to allow such a loan?


"David Woolley" wrote in message
...
Jeremy Pinwhistle wrote:
Hi,

I am just dealing with the estate of a recently deceased elderly relative.

Since her death it has emerged that a year ago at the age of 76 she took
out a personal loan from her high street bank of £20k.

We are currently in the process of applying for probate, so as yet we are
not sure as to what the actual loan agreement contains, and whether it
will have to be repaid out of her estate.

Unless there was valid life insurance tied to it, I would assume it has
to be repaid. I think any life insurance would have been very steep!


It was not charged against her house which she owned outright and her only
income was her state pension. It seems rather irresponsible of them to
give her such a loan at her age.

That might depend on how the terms compared with a secured loan. They
might have taken the view that there was so little chance of default
that it wasn't worth the cost of formally securing it, especially if she
was in poor health, so it was likely that it would get repaid soon.

Jeremy Pinwhistle wrote:

The loan was taken out over 7 years, meaning that she would have been 84
by the time she had paid it off.
It seemed irresponsible of a bank to allow such a loan?

Why is it irresponsible just because of her age? The only real
considerations are that she could afford the payments and that she
wouldn't abscond to Venezuela.

She must have wanted to borrow the money (do you know what it was
for?), and rather than trying to blame the bank for mis-selling,
cinsider that the bank may have taken some persuading to agree (was
the manager a friend of hers?). The only dubious thing about it
is that if it was indeed an ordinary personal unsecured loan, the
interest rate would have been on the steep side compared with it
having been secured on her house. It's worth looking into whether
a favourable rate was negotiated as if it had been secured. Could
it have been quasi-secured, e.g. the bank took custody of the deeds?

Bear in mind that the bank must have known there was a good chance
she might not survive the full 7 years. They knew that if that
happened, they would still get their capital back given that they
knew the estate would cover it. They also knew that her early death
would be to their own disadvantage, since they would lose out on the
interest in respect of the remainder of the term.

"Jeremy Pinwhistle" wrote in message
...
Hi,

I am just dealing with the estate of a recently deceased elderly relative.

Since her death it has emerged that a year ago at the age of 76 she took
out a personal loan from her high street bank of £20k.

We are currently in the process of applying for probate, so as yet we are
not sure as to what the actual loan agreement contains, and whether it
will have to be repaid out of her estate.

All debts have to be paid out of the estate before the estate is
distributed, that how dieing with debts works

tim

The interest rate was almost 12%.
At the present time we have no idea where the money went. She paid all the
installments when they fell due, but because probate is still being sorted
we have not yet had access to her bank statements.
Thanks again,
Steve.


"tim...." wrote in message
...

"Jeremy Pinwhistle" wrote in message
...
Hi,

I am just dealing with the estate of a recently deceased elderly
relative.

Since her death it has emerged that a year ago at the age of 76 she took
out a personal loan from her high street bank of £20k.

We are currently in the process of applying for probate, so as yet we are
not sure as to what the actual loan agreement contains, and whether it
will have to be repaid out of her estate.

All debts have to be paid out of the estate before the estate is
distributed, that how dieing with debts works

tim