Q I have been a customer of Provident for many years. It recently announced that it will be no longer providing loans in Ireland. Where can I go now to get a loan as I rely on Provident every year to help with back-to-school costs?
Your best bet is to contact your local credit union where you can become a member immediately. Credit unions offer loans of all sizes to suit your financial needs and are a great way of building up your credit history.
The cost of credit is also considerably cheaper than borrowing from a licenced moneylender such as Provident, according to Paul Bailey of the Irish League of Credit Unions. For example, on a loan of €500 over six months you will pay approximately €15 in interest compared with interest of €150 with a licenced moneylender, on the same amount over the same period.
Mr Bailey says that as soon as you become a member of a credit union, you can apply for a loan and avail of the services credit unions have to offer. Unlike banks and other lending institutions, credit unions operate on a not-for-profit basis.
Any surplus funds are put back into developing new services for members and supporting their local communities.
If you have been impacted by the recent decisions of banks and other loan providers, the best advice is to contact your local credit union today. You can find your local credit union at creditunion.ie.
Q I am a 66 years old. I have been in receipt of Deserted Wife’s Benefit for 27 years. On reaching pensionable age, my benefit was topped up to the non-contributory pension amount. I have no other income. I have had both my hips replaced, and am diabetic.
I own my own property which does not have a downstairs toilet.
As I age my health situation is deteriorating and a time will come when I will not be able to climb my stairs. I am hoping to sell my property to acquire a single storey property to accommodate my future health needs.
If, in acquiring a new property, I am left with a surplus cash balance will this affect, or remove, my entitlement to a Deserted Wife’s Benefit? I understand that an exemption exists to allow a recipient of a non-contributory pension to have property and retain up to €190,500 in equity.
A There is no capital assessment of means on Deserted Wife’s Benefit, according to a spokesperson for the Department of Social Protection. This means the sale of this woman’s residence will not affect her Deserted Wife’s Benefit payment.
The spokesperson said that in the case that is outlined, it will not matter if the woman sells her home, buys a smaller one for less and retains a surplus. She continues to receive Deserted Wife’s Benefit.
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Q We are in our early 70s and our house is poorly insulated, in poor condition and really cold in the winter. Even with Government grants, we need about €60,000 to make it comfy for the next 10 to 20 years. Our income is low. What options do we have?
A To answer this we are making a couple of assumptions. Firstly, that you don’t have sufficient savings to make these changes and secondly, that you own your house outright.
The first option would be to trade down to a smaller, newer house that is already well insulated and comfortable, though from my experience it does usually mean giving up your immediate neighbourhood, which may mean a lot to you.
You could borrow the money from the bank or credit union over five to seven years, but you may not be able to take on such repayments, according to Shane Tobin of insurance broker Lowquotes.ie.
If you have children, maybe they would consider “paying forward”, though you and they are best placed to decide whether they would be able to do so and whether it would be wise to have such a discussion, he said.
Mr Tobin said the alternative would be to consider a lifetime loan, which allows people over 60 to borrow against the value they have built up in their home without the need to sell it, trade down, or make monthly repayments.
Instead, interest is added to the loan balance, which grows over time, and the loan is ultimately repayable after the borrower dies or moves out of the property.
However, there is a clear and material trade-off in that you will end up leaving less in your estate when you die than if you had not taken out the loan, he added. Get good advice if you are considering a lifetime loan.