Even pensioners still have wishes that they cannot fulfill due to the often low pension. A loan for retirees can help here, but it is difficult to obtain. Many banks argue that the risk of death is too high. Fortunately, there are exceptions, because some credit institutions have specialized in lending to senior citizens and offer tailor-made pensioner loans. This guide shows the possibilities.
Different risk assessment
The loan for pensioners is usually not comparable to a loan that is offered, for example, to employees or young families. Real estate financing over a longer term is rarely possible. An exception is when the borrower has excellent financial circumstances. If the loan amount is lower, the chances of approval are different and the term may also be longer in this case. There is no rule of thumb, however, as each bank views risk differently. At many credit institutions, the borrower can be a maximum of 70 years old, while at 60 years other institutions already draw the line and demand that the loan be repaid by the age of 70.
Loan for retirees with collateral
If a pensioner wants to apply for a loan, he must be able to prove a regular income, i.e. regular receipt of the pension. Proof of other collateral, such as a property or regular rental income, is also advantageous. The Credit Bureau file must also be free of negative entries. Applying for a loan is difficult if there are other outstanding loans. Should the loan be approved in this case, the creditworthiness of the borrower is usually rated so poorly that the loan has high interest rates for pensioners. The more security the pensioner can provide and the shorter the loan term, the more likely it is that the loan will be approved.
However, applicants who are older than 70 will find it difficult to convince a bank. There is no general answer to where the age limit is drawn, because this always depends on the bank. Another option for a loan approval is when a guarantor is provided. In the event of payment difficulties of the borrower, this bears the repayment of the loan. For this reason, the guarantor must have an impeccable Credit Bureau and an income that is above the garnishment limit. If the requirements are not met, the bank will reject the guarantor.
There are various reasons why more and more banks are now recognizing pensioners as customers. The development clearly shows that more old people will live in Germany in the future. Another factor is the steadily increasing life expectancy. This results in the special loan for pensioners. But these are small loans with which, for example, a renovation or vacation is to be financed. As a rule, the installment loan has a short term. The loan is therefore largely tailored to the needs of pensioners, but also to the security concerns of credit institutions.
Credit comparison worthwhile
With a comparison on the Internet, the offers can be compared and thoroughly checked. It is important to pay special attention to the APR because it includes all the costs of the loan. The Internet proves to be a valuable aid in the comparison, because online loans in particular are usually cheaper than loans from the house or branch bank. Small differences in interest rates already help to save costs effectively.
The comparison is non-binding and free of charge and can be carried out within a few minutes using the individual data. On the Internet, banks and credit intermediaries are compared and evaluated on many platforms. It is generally worthwhile here to study the information carefully, especially with regard to age restrictions.
Credit protection so that the heirs are not burdened
It is advisable to arrange residual debt insurance for a loan for pensioners. This means that if the borrower falls ill or dies before the end of the contract, the insurance will cover the remaining installments. If this is not the case, the heirs would have to try to pay off the installments. Since no one likes to burden the family with a financial burden, the additional cost of securing the loan is a good investment.