Installment loan for pensioners
Some may think that it will be easy for a pensioner to get a loan. You do not have to worry about unemployment and receive regular pension payments. Nevertheless, this is a fallacy, because pensioners in particular belong to risk groups at banks. Many credit institutions set an age limit for lending, which is often 70 years. So it is not so easy to get an installment loan for retirees, but it is not impossible.
Refresh creditworthiness with pensioners
The creditworthiness of pensioners is often not very good because they receive their pension, but it is not always very high. In order not to have to do without anything even after retirement and to be able to apply for a loan, the creditworthiness has to be refreshed. This is possible with different methods. The applicant can improve his creditworthiness by providing a guarantor.
This guarantor does not have to be related to the applicant because it is only important that he has a fixed income. So if you find someone who takes over a guarantee, such as your own child or grandchild, you have the credit almost certainly. Another option would be to use life insurance as security.
In the best case, this has been running for several decades and therefore has a high surrender value. If the pensioner could no longer pay the installments of the installment loan for pensioners, the bank would receive life insurance and could replace it. The bank would thus receive the surrender value of the insurance and would therefore have the loan amount.
Conditions with the loan
With an installment loan for pensioners, the banks can offer different conditions. As a rule of thumb, the following must always be observed: the better the credit rating, the better the conditions. Interest rates are often above those of a normal loan, so the pensioner should never forego a loan comparison. Debt is already incurred with a loan, so it is important that the loan does not become too expensive and the costs remain within reasonable limits.
The house bank is not always the best choice, because direct banks on the Internet also offer retirees a loan. A processing fee is often waived here, which is hidden in the annual percentage rate. If you pay attention, you can save a lot of money. The pensioner should only decide on a loan offer after a comparison.