Cashpoints: Friendly bonds ... risky loans ... deathly benefits

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The Independent Online
Transamerica Lending Company or TLC for short, is launching a new telephone-based personal loan operation starting on 19 May. It is aimed at homeowners who have traditionally had difficulty getting credit, including the self-employed, anyone whose income depends heavily on bonuses or overtime, people starting new businesses, those with County Court Judgements against them, and divorcees with legal cases outstanding, and people looking for a single loan to pay off a number of existing high-interest debts.

Loans range from pounds 500 to pounds 50,000 repayable over 3-30 years. Interest rates are individually tailored, but start at 9.9 per cent for first mortgages and average 13.5 per cent APR. Loans are secured against the borrower's home, but there are no hidden charges, no interest rate penalties for arrears, and some repayment flexibility is possible. The maximum LTV is 85 per cent and repayment protection insurance is available.

A free guide, called "Are You a Risky Bet", is available from Freepost, PO Box 159, Derby DE1 92P; for detailed information call 0800-729927

Paragon Mortgages, formerly Homeloans Direct First Mortgage, one of the telephone-based mortgage providers, is offering a mortgage which is half fixed and half variable, to cater for customers who want an each- way bet on rates over the next five years.

The fixed element will cost 7.75 per cent until 1 June, 2002, with the variable element starting at 6.20 per cent, giving an average starting rate of 6.975 per cent, which compares favourably with the new Halifax variable rate of 7.6 per cent.

The overall rate will only change by half the amount of any future rises in variable rates. Borrowers will also be able to redeem up to 25 per cent of the loan without penalty in the first five years. Call 0800-080088 for details.

Save & Prosper thinks that the forms produced by Halifax Building Society showing how members can choose between selling for cash, receiving share certificates or sheltering their shares in a special investment account with the Halifax, are too hard for many people to follow (see Readers' Lives, page 14). It is offering a free guide to help Halifax members choose an actual share certificate which they can then put into a PEP. Call 0800-403030.

Friends Provident is offering, for a limited period, a five year High Income Bond which will pay 10 per cent net annual interest, or 0.78 per cent net per month, or an accumulated income of 60 per cent after five years, on sums of pounds 7,500 or more. Capital will be returned in full if the average level of both the FT-SE 100 shares index and the DAX index of German stocks in the fifth year are at or above the starting point.

But if either index falls by more than 5 per cent all income paid out or accumulated will be deducted, leaving the investor with only his original capital. If either index falls by less than 5 per cent, then the capital repayments will be reduced on a pro rata basis. Call 01722-715629 for details.

Norwich & Peterborough Building Society has relaunched its offshore savings account, which will be operated by post from Gibraltar. Interest is paid gross starting at 5 per cent on pounds 10,000-pounds 30,000, rising in steps to 6 per cent on sums over pounds 100,000. Withdrawals can be made without notice or loss of interest. Call 01733-372222 for details.

The first ever Open-Ended Investment Company or OEIC, a cross between a unit trust and an investment trust that can be sold throughout the EU is being launched on May 27 by Global Asset Management. Called GAM Japan Growth Fund it will accept investments of pounds 10,000 upwards in 100p shares.

Unlike a unit trust there is no bid/offer spread but charges are above the average for managed funds. An initial charge of 3.5 per cent and an annual management charge of 1.75 per cent are payable on shares bought through intermediaries, or 4 per cent initial and 1.5 per cent annually on direct sales.

After the initial offer period ends on June 6 the initial charge rises to 4 per cent on shares bought through intermediaries and 5 per cent on those sold direct.

Japan has been chosen as the market to invest in because growth prospects are considered good after several years of depressed prices. Dividends will be reinvested, but investors have to bear in mind that the average gross dividend yield on the Japanese stock market is still only 0.8 per cent, which would not even cover the annual charges on a typical portfolio of shares.

General Accident Life is adding free terminal illness benefit to its mortgage protection policy and reduced premiums for non-smokers, for 25- 50 year olds, and the typical mortgages of pounds 30,000-pounds 50,000 over 20-25 years. A woman aged 25, who is a non-smoker and in good health can protect a pounds 50,000 repayment loan over 25 years for pounds 5.35 a month.

Mortgage brokers John Charcol are offering a standard variable rate mortgage at 7.39 per cent which is guaranteed not to exceed 7.99 per cent over the next five years. Alternatively they offer a fixed rate of 6.99 per cent until April 1999 followed by a variable rate guaranteed not to exceed 7.99 per cent in the following three years.

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