Banks: Give up cigarettes and we’ll cut loans

SMOKERS are being encouraged by banks to quit the habit.

Lenders who are approached by customers looking for lower monthly repayments on their borrowing are being told that if they reduce their monthly outgoings then the bank will work out lower re-payments.

Frank Conway, managing director of financial advisors, CredyCare.ie, said that smokers are being encouraged to cut out cigarettes by the banks in order to reduce their monthly outgoings.

“Banks are challenging everything when it comes to expenditure,” said Mr Conway.

He also said homeowners can negotiate a reduction in interest rates on their mortgage if they talk to their lender.

“We had a client who was able to bring down their monthly repayments by €100 because the bank reduced the interest rate for two years,” he said.

The bank agreed to review the interest rate after two years.

“People need to be very diligent and very determined, but banks are generally willing to talk,” said Mr Conway.

He also said people can negotiate in a way that there would be no interest penalties to be paid.

“It’s a good deal for both the debtor, who reaches a new agreement with their creditor and also for the creditor, who keeps a client on board, making some payment,” he added.

Irish Brokers Association chief executive, Ciaran Phelan, said he welcomes any move by the banks, “particularly due to the fact it was the banks’ reckless lending practices that helped spawn this avalanche of troubled mortgage holders”.