Although we may have another perception, banks look favorably on retired funding seekers, so it is not especially difficult to get a bad credit loan if that is your profile- guaranteed approval for loans. In this page, we show what credits you can request if you are a pensioner, what requirements you will have to meet to approve your application and what obstacles you may encounter due to your working condition.
Difficulties that retirees find in financing themselves
As we have said, financial institutions consider that retirees are clients with a good profile, since they have regular income (a pension) that, in principle, ensures the repayment of their loans. However, pensioners may have certain difficulties in obtaining financing due to the following two reasons:
- A very high age: for entities, it is risky to lend money to people over 67 years old because of their own age or health problems, there is a possibility that the loan holder dies and can not make the reimbursement. To cover this possibility, some banks require life insurance to access their credits (whose price will be higher than if we were younger) or have a guarantor to take care of the debt in case of death.
- Some income that is not always enough to pay the fees: although the pension is a regular income if the requested loan is very high, it is possible that what we charge does not reach us to pay the cost of the monthly payments and to face the time, to our other recurring expenses.
How are bank loans for retirees
In general, if we charge a good pension, we will not have problems to access the different financing products offered by banks: personal or mortgage loans, pension advances, credit cards, etc. However, some entities establish age limits on their loans, so in many cases, we can not get financing if our age at the end of the term exceeds 75 years. Also, as we have seen in the previous section, due to our advanced age we may have to have a guarantor or take out a life insurance or payment protection that covers the payment of fees in the event of death or loss of life. disability or accident income.
Private quick credits, an option to cover unforeseen events
If we urgently need money and our bank does not want to lend it to us, we still have another option to obtain liquidity: request a quick credit from a private equity company. These companies are not as restrictive as the banks when granting financing and, in addition, they enter their loans practically at the moment, so that their products can come in handy to cover unforeseen events. However, flexible requirements and their speed, the price of quick loans is usually much higher than that of bank loans.
In this case, we can also find ourselves with certain drawbacks if our age is very advanced. In general, private lenders do not accept applications from people over 75, although in some very specific cases we can get fast loans even if we are over 80 years old. However, to obtain these products it will not be necessary to have an endorsement or contract any type of insurance.
Can retirees get P2P loans?
Yes, most of the crowdlending platforms that operate in Spain also accept the requests of retired people who need financing, although many of them establish a maximum age limit of up to 75 years. As the pension is a regular income, if we ask for a P2P loan, we have many possibilities to obtain a loan with a relatively low interest, because our level of risk will not be very high. In addition, being loans granted outside the traditional banking circuit, these products do not have connection expenses, which in the long term supposes an important saving.
What is a reverse mortgage?
Another way to obtain financing is through a reverse mortgage, an interesting option if we are retired and we have a homeownership. With this financial product, specially designed for people over 65 years of age, we can receive a monthly income by putting the house as collateral for a mortgage loan. In addition to having several tax advantages, the reverse mortgage has a condition that makes it especially attractive for pensioners, which is that the greater the age of the holder, the higher the value of the fees charged.