A reader from London is worried what will happen to his personal loan if he dies.
Jo Crosse, Halifax and Bank of Scotland personal loans expert, tackles the problem.
Malcolm from London asks:
An odd question I know, but what happens if I die before my personal loan has been repaid?
Every case will be different, therefore, it would be difficult to give a single answer.
The one thing that I can say for certain is that the debts do have to be dealt with, they can’t be left alone to sort themselves out.
Usually when someone dies their outstanding debts are paid out of their ‘estate’ (any cash, investments, property they owned).
If the loan is in your name only, your spouse/next of kin will not be responsible for the debt. However, if it was a joint account or loan they will be responsible for meeting the monthly repayments.
If you have taken out Payment Protection Insurance with the loan, and you are the first named on the loan agreement, and it covers life, if all criteria for a valid claim are met, the loan would be repaid and your spouse/next of kin would not be liable for the remaining debt.
As with all insurance policies terms, conditions and exclusions apply.
If you have a question for Jo, go to the myfinances.co.uk Ask the Loans Expert section
Or for more information on your loans options go to personal loans at Halifax
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