What happens to a loan if the borrower dies?

It can be overwhelming when you need to deal with the affairs of a relative who has passed away, especially if you need to deal with their debts. 

Who should I contact when someone dies? 

When you consider all of the companies you deal with across the space of a single year, the list of organisations who will need to be notified when someone passes away can be surprisingly long. It can be easy to miss some, and the number of times you will need to provide paperwork can be significant. 

How will Life Ledger help you?  

We have signed up to Life Ledger who provide a free, easy to use service that can help you tell over 1,000 companies across the UK of the death of a loved one.  

This list of companies includes banks, credit card providers, life, car and health insurance providers, utility companies, pension providers and telephone and broadband suppliers.  

You only need to upload the death certificate into the Life Ledger portal.  This means that you will not have to write to or contact each company individually.  

If you notify Lendology of a borrower who has passed away via this platform, we will not usually require copies of any other paperwork regarding the death. We will contact you promptly to acknowledge receipt via your preferred method upon receipt of a notification from Life Ledger.  

For government services, you can use the free Tell Us Once service.  This website enables you to notify all  government departments like HMRC, DWP, the Passport Office, your local council and DVLA in one go. You will need a reference number provided by the registrar to access this service.  

How to pay off debts after death  

The death of a borrower can be difficult to think about, but unfortunately it does happen, leaving many people having to cope with loan or credit repayments on their own. If you have a Lendology loan in joint names, and the other party to the loan has passed away, we are here to help.  Please contact us and we can explore the options with you based on your new financial circumstances.  

If you are struggling with other debts or utility bills, we would strongly advise you to contact a debt advice agency for support.  Our Managing your Money page provided by the Money and Pensions Advice Service can also help with budgeting and signposting to advice services.   

If your household income has changed, our Benefits Calculator will identify any state benefits you may now be entitled to. 

Who must pay off the debts? 

The executor of the estate of the deceased is responsible for repaying any debts from the assets (mainly property or savings) from the estate.  

If there are not enough assets within the estate to pay off all of the debt, any remaining debt is written off.  

For Lendology loans, as a gesture of goodwill we will freeze the interest on any loan balances of the deceased for 18 months from the date of death to provide time to manage the affairs of the estate. In most cases the loan is repaid via the sale of the property, and the solicitor or legal representative dealing with the sale of the property will contact us for a settlement figure calculated for the completion date. 

If you are an executor and you are unsure what the terms of the loan (or any loan) are, upon provision of confirmation of your executor status you can contact the lender and ask for balance and, if you wish, a copy of the original loan agreement.  

For more information about an existing home improvement loan(s) with Lendology, please contact us.