Our Commutation Loan allows you to unlock part of your commutation prior to retirement, providing you retire before 1st April 2022. The maximum loan term is dependent on the purpose of the loan. You could release up to £100,000 or 80% of your commutation entitlement, depending on which amount is lower. This could give you a head start in planning for your retirement, it could allow you to consolidate any existing borrowing or even to reward yourself for many years of hard work.
Key Product Information
|Interest charging information||Interest-only loan.
Interest rate fixed for the life of the loan.
Interest accrues daily and is charged on a monthly basis.
||You will make a fixed monthly payment equivalent to 31 days of interest of the total sum borrowed. This ensures that you always cover the maximum amount of interest that will be charged in any one month. Where payments are made in months of less than 31 days the additional amount will be paid off your outstanding loan balance.|
|You can repay the interest on your loan by payroll deduction or Direct Debit. To see if we offer payroll deduction in your force click here.|
|First payment due on the first available pay day after drawdown of loan.|
|Once you receive your commutation, you will be expected to repay your loan in full from your debit card.|
||You will be required to repay your loan on receipt of your commutation.|
|If you are borrowing for debt consolidation purposes the maximum repayment term is 12 months.|
|Amount of loan available||You can borrow up to 80% of your commutation or up to £100,000 – whichever is the lower amount.|
|The maximum loan for debt consolidation purposes is £50,000.|
|Application/Arrangement Fee||No application or arrangement fees apply.|
|Early settlement||You can repay the loan at any time fully or partially without charge.|
All loans are subject to affordability and our lending criteria.
What we need from you
If you wish to apply for a Commutation Loan we will need to see an up to date pension forecast to establish your commutation amount and you must retire before 1st April 2022.
You may wish to speak to a Pensions Adviser or your pension department before making a decision on commuting part of your pension.
Consolidating existing debt
We understand that some of our members may wish to use their commutation to pay off any existing borrowing, so that they reduce their outgoings for retirement. We allow our members to use our Commutation Loan as a means of consolidating existing borrowing, we will lend up to £50,000 for this purpose. The maximum repayment term when borrowing for this purpose is 12 months.
Consolidating could reduce your monthly outgoings, leaving you with more disposable cash each month. Care should be taken when consolidating debt. It may increase your total amount payable, or the period, over which it is to be paid, and impair your credit rating.
If you are unsure what to do, seek independent financial advice.
You’re covered with Life Protection
Life Protection is included with all our loans and covers you up to the age of 70. This does not cost you anything, it is simply another benefit of borrowing from the Credit Union and has been created purely to help our members.
Loans are protected up to a maximum of £40,000 per member. This means your loan would be cleared, ensuring your debt does not remain outstanding, subject to our terms and conditions.
All benefits are paid at the discretion of our Board of Directors. Life Protection is not an insurance policy and is not guaranteed. For more information please click here.