Not only do private customers often have a financing need during their working life, but also retired people more often need a bank loan to finance a specific purchase. In practice, however, quite a few retirees have difficulty getting a bank loan as they get older.
After all, quite a few credit institutions only grant loans on the condition that the borrower is at most 70 years old when the loan is taken out. In addition, from a certain age, there is a limit at many banks regarding the possible loan amount, which is often around 5,000 USD.
Smaller loans, on the other hand, are rarely a problem if the repayment period is within the range of 12-36 months. Since life expectancy in Germany is increasing in general and banks also value pensioners as an attractive customer group, there are now some institutes that deliberately offer a special loan for pensioners.
What do the special loans for pensioners include?
Although there are not yet many banks offering special loans for pensioners, the number is practically increasing from month to month. Some of these offers differ in terms of terms, but also in terms of the requirements that pensioners as borrowers must meet. However, there are also some similarities among the various offers.
For example, many banks that offer a loan to pensioners have raised the borrower’s maximum age limit. The pensioner can now, for example, also be 75 years old when borrowing, so that the otherwise “usual age limit of 65 to 70 years does not apply to these loans.
In addition, senior citizen loans often include better interest rates than is the case with the “ordinary” installment loan. This is certainly also due to the fact that there is hardly a safer income than pension. However, banks do different assessments when it comes to risk assessment.
Creditworthiness can be assessed differently for loans for pensioners
With regard to the pensioner’s creditworthiness or the risk that there could be a loan default, the banks sometimes assess the situation somewhat differently. For example, some banks still consider 80-year-old pensioners to be creditworthy, while other banks only grant the loan if it is repaid at the latest when the pensioner has reached the age of 75. Collateral is also sometimes required, such as pledging savings.
It is also not uncommon, especially because of the increased risk of death in old age, that the loan is only granted in connection with the conclusion of residual credit insurance. Due to these different terms and conditions, loan seekers should always compare the offers available in the area of loans for pensioners.
Find cheap senior loans
The demographic development in Germany is clearly in one direction: Our society is getting older. Accordingly, habits and circumstances are changing, more and more companies are adapting to the living and financial situation of older people and are offering tailored products for seniors. What is common in the free economy to adapt to its target group is often no longer appropriate when lending from a certain age. Senior citizens often complain about restrictions on consumer credit.
Take out residual credit insurance for loans in old age
The rejection of installment loans that are applied for by pensioners or seniors is actually completely unnecessary. Should the borrower die, residual credit insurance covers the risk of a credit default completely. Although the insurance premiums for such residual debt insurance are comparatively higher from a certain age than for younger target groups, you still benefit from this type of insurance, especially with regard to the surviving dependents, in an older age. The residual credit insurance thus offers the bank, the borrower and his relatives security.
From a certain age, the loan becomes tricky
Despite the residual credit insurance, many loan applications from pensioners are still rejected. This is especially the case:
- When the senior has reached old age, for example in his late seventies.
- If the narrow pension and thus the income is less than 1,000 USD a month.
Pensioners and senior citizens who are to be found in this group have hardly any chances of taking out a loan, unfortunately also in many cases not with residual debt insurance. Alternatives can offer so-called credit platforms. They bring private investors and borrowers together and thus arrange loans from private to private. The hurdles here are often not as high as with banks and direct banks.
The easiest way is to find the right senior loan in our loan comparison calculator. By entering the desired loan amounts, customized products are displayed for seniors. With pensioner loans, the loans are common
- rather shorter terms
- higher lending rates
than the offers for younger target groups. Since many loan offers are issued depending on creditworthiness, it is also important to know which data and which scoring value Credit bureau has created or ascertained for its own creditworthiness.
In the best case, consumers should obtain Credit bureau information for themselves before making a loan request. It is also important to only make so-called condition inquiries to the potential lending banks, otherwise every credit inquiry can have an impact on the scoring value.
With one click to the cheapest senior loan
Here in our comparison calculator, you can click on the “Compare offers” button to find the right loan for senior citizens. The differences in interest and costs can be seen at a glance, so that you can quickly determine the cheapest loan.
Further decision-making aids are the ratings of previous customers for the respective credit and test seal and awards from comparative tests by financial magazines and news channels. If you have found the right pensioner loan, you can request it directly by clicking on “Go to provider”.