In addition to apprentices and the unemployed, older borrowers are often overlooked. At a certain age, the loan application will be rejected by many banks. The good news: The credit market is changing and increasingly having loans for retirees. However, the deciding factor is the age of the borrower. Especially in connection with the desired amount of funding, the Seniorenkredit is still partly a difficult project.
Why pensioners are interesting for credit comparison portals
The first thing that will strike you in the credit comparison: For many banks, there is not the explicit term of the loan for retirees. Instead, it is necessary to know the framework conditions of normal installment loan providers. This is how retirees find out which loan offers are shortlisted. Basically, it can be said that the chances of attractive loans are still good even in old age.
At least three reasons can be cited in this context:
- Pensioners have a secure income and are not affected by unemployment (pension)
- Seniors are considered risk-conscious; They usually apply for sums that are affordable
- Entries in the register of Private credit and other credit bureaus are rather rare
Depending on how high the monthly pension payment is, the amount of the loan and the loan conditions will vary. Only with fixed rate loans, all customers get money at the same pewter rate when it comes to granting the application.
The secure monthly benefits from the statutory pension fund or privately completed pension schemes are popular with lenders. Even though the amount of the pension may be a problem for many former employees in financing the cost of living, who receives an above-average pension or pension is welcome to many banks. However, this finding refers above all to financing in the amount of a typical consumer loan up to 50,000 euros. If you build a house again in your old age and apply for financial or real estate financing, the age may be an obstacle despite the security in the form of the house or apartment.
This is because credit institutions often do not expect people in the 60+ age group to experience the end of the repayment term. The younger the applicants, the sooner the decision of the banks will be positive. However, it is also true that the times are a thing of the past, in which refusals can be expected from the age of 70 years. Just a few years ago, this was precisely a point that consumer advocates in Germany regularly criticized. Some lenders grant a loan to retirees even if they are already 80 years or older.
Sernior loan is often possible
It’s a misinformation that seniors can not get loans. Buying a new car through a low- cost car loan, a vacation loan, or a homeownership refinance loan are just three possible situations where a loan can be an option for retirees. Maybe it should also be just a small loan, with which you want to fulfill small wishes in between? Low loan amounts and comparatively short terms are often a guarantee that you will quickly find a suitable financing partner.
The assessment that German seniors often have good to very good purchasing power has moved the banking landscape to rethink. As with all loans, a loan request for retirees is free and non-binding. As a claimant, you can save yourself a lot of time by precisely looking for information on the maximum age of the borrower in product descriptions.
→ Take a look at the age limits of financing
Until what age can I take out a loan?
Because occasionally, the maximum age is 70 years, while other institutions and intermediaries even at 80 years (possibly even beyond) loans granted. The fact that they sometimes receive different interest rates than those in gainful employment makes the settlement process even more important. Older customers are also in good hands at institutions with branch network. There you have a direct contact and many bank employees have been known for years. Retirees should not rely blindly on the offer of the house bank, but compare it with online loan offers. It is not uncommon that older borrowers often accept the slightly inferior offer of the house bank to have a local contact person.
Pensioner loans on the Internet
A misconception prevails despite the credit market boom on the Internet. It is said that seniors are the most popular target group for chain stores that have a network of local branches. Right this is only conditionally. Because pensioners and thus automatically loans for retirees arrived years ago in the digital age. Let’s take a look at which products are suitable for seniors at all. The variants are now more extensive than many borrowers think. Where the naming often means the same thing:
- Loans for pensioners
- pensioner loans
- senior finance
- ü60 loans
- Loans for former civil servants
Borrowers who were previously civil servants are popular with banks because they usually receive higher government benefits. A golden rule can not be derived from it. For there are more than enough former free-lance workers who can keep up with the pension plans of their former employer without any problems with civil service pensions. Basically, the loan for retirees is similar to a normal loan that working people apply for. Ultimately, this refers to the usual requirements and data that a loan application requires from potential borrowers.
Comparison of loans for seniors
As with all loan models, the credit for retirees is that the comparison as such is not binding and free of charge. The loan request on the Internet for possible offers decreases above all the compulsion to appear in a bank personally. This may seem strange to borrowers with a long-standing commitment to the bank; Nevertheless, the online allocation in this area has become the standard over the years. And the idea that seniors do not use the Internet in the search for credit in a similar way as young customers, falls short, according to studies. Because even in old age, the Internet is a good place to compare loans.
The advantages are obvious:
- You can compare offers beyond the regional branch banks
- You end up with loans for retirees from banks that you otherwise miss
- You can carry out faster analyzes of market conditions
- Borrowers can apply for loans from their own home via PC or mobile device
- Bank customers in spe can also take advantage of brokerage services
It is the targeted intermediaries such as Creditorm, trucredit, Creditend or Crediter who can be of great help in finding a loan for retirees. On this point, however, a crucial difference between the business models of the portals must be pointed out.
Pensioner loan from private or bank?
Some of the platforms mentioned above are only used to compare the financing models of commercial providers in the market. It is primarily about loans for pensioners who come from banks and other financial service providers. You can also apply for loans for seniors on a private basis. More precisely, this is about the so-called P2P portals. P2P stands in this combination for “private-to-private” or the German counterpart “private to private”. If you apply for a loan for retirees in this way, receives the funds from individuals who understand trucredit and Co. as a viable alternative to many classic investments and provide their capital for loan projects of other individuals. In return, yields are waving, some of which are well above normal investment rates. The risk of a funding shortfall is shared by all lenders.
The main difference is that funds only flow when the total amount is made available. The applications are usually published on the platforms for a certain period of time. After the deadline, the “project” will be deleted, in case of emergency without lending. However, in the case of normal bank loan intermediaries, the capital comes from a single credit provider, which is why the provisional non-binding authorization usually takes place within a few hours or days of receipt of the fully completed loan application.
As a retainer borrow money from family?
Another form of personal credit lives up to its name. This refers to the granting of a loan for pensioners from the family environment. But many older people shy away from the inquiry to siblings or their own offspring. If in doubt, it may be worthwhile, at least in the case of a small loan, to jump over your own shadow. Finally, here attract interest-free financing. Credit agreements should nevertheless be set up, otherwise the tax office might interpret the award as a donation, which may have tax implications for the recipient and the sender. Even if such a loan for pensioners within the family or the circle of friends is waived interest, so should a contract with all the key details on loan size, maturity and repayment terms are set up.
Creditworthiness in loans for retirees
Am I creditworthy as a pensioner at all? The answer is possible through self-assessment, which you can obtain once a year from the Private credit free of charge. This overview provides information about the current “credit score”. Banks and intermediaries offering loans to retirees, in turn, check the creditworthiness of applicants anyway. So it is better, you are well prepared from the beginning. Loans without Private credit do not exist in the German market, because by law the credit check is obligatory.
Alternative offers with names like ” Private creditf ” or ” s ” credits usually come from banks abroad. Foreign credit providers may include additional fees. In particular, this reference means possible pre-costs (for example, for the application review), which are prohibited in this country by the legislature.
To borrow as a retiree two?
If the credit check proves that the odds of a positive credit request are bad, you still do not necessarily have to throw the proverbial shotgun in the towel. There are also ways for the retiree to find ways to improve their prospects. The two possible ways are
1. the application with two applicants (eg partner in pension)
2. the involvement of a guarantor
Both approaches are promising. A joint application will in most cases be made together with the partner. However, another second person may also appear as a co-applicant in the loan for pensioners – for example, children or friends. Of course, this is particularly advisable if the credit sums are requested anyway for a common purpose. Needless to say, guarantors and co-applicants should have sufficient credit standing and earn their own income. This income can also be proven in the form of pension benefits. As regards the distinction between a loan applied for in pairs and a guarantee loan, in the first case the money will be paid to both applicants, usually with a single reference account in the contract. With the loan with guarantor only one borrower receives the means.
Guarantors only play a role when there are problems with the repayment of liabilities. Then, instead of borrowers, guarantors assume liability for any losses. Your chances are particularly good if you can once again offer a loan for retirees appropriate collateral for financing at an advanced age. For a smooth loan repayment speak initially regular income in the form of pension and creditworthiness. If the credit rating does not look good, other collateral can be seen as a door opener at the bank. The conclusion of a residual debt insurance is eg such a security.
→ Borrowers can independently select policies for protection!
Remaining insurance for seniors makes sense?
The residual debt or residual credit insurance is often recommended, especially with higher loan amounts. However, banks must not dictate the insurer to their customers, even if this often gives the impression. The recommended policies at several banks are more of a provision for the benefit of the lenders than the security of the customers. If necessary, look for the cheapest possible insurance for the planned loan for pensioners. Furthermore, existing life insurance policies can be offered as an additional safeguard measure.
Too low pensions may cause seniors to generate additional income by continuing to work at retirement age. Whether life or residual debt insurance: The providers of policies should in an emergency, the further payment of the loan installments, if borrowers die, so that further repayment without insurance would be part of the duties of the partner or the heirs.
More collateral for credit for pensioners
There are a few other options to ensure the necessary financing security for retirees. A mortgage or mortgage on existing home ownership (as well as commercial real estate) is often accepted by banks. Such values can be used by banks to settle the remaining debt by means of a sale – in the case of an emergency, this often happens in the course of a foreclosure sale. Other assets may also be offered as collateral for credit for retirees.
For example, these are:
- a paid-off vehicle (fully comprehensive insurance)
- Assets invested in equities and securities
- Savings deposits (also and currently fixed-rate investments such as fixed deposits)
In the case of the car, it should not be a car financed. If a mortgage on a property with the competent land registry is to be registered for the credit, the bank will insist on a first-ranking entry. One exception is often building society, which are often content with secondary entries.
The conditions must meet pensioners
Special conditions or not – above all, the credit for retirees is about the exact details in the loan agreement, and the requirements must be known before applying. To “classic” terms that are put to borrowers in special are:
- a main residence in Germany
- Evidence of income situation (notice of pension)
- the consent to the credit check
- a german bank account
Of course, the need for adulthood can be disregarded here in the case of credit for pensioners. The contract for senior credit includes the following information:
- the full name of the applicants
- the complete address
- the exact pension or pension amount
- current expenses (from rent to maintenance to insurance expenses)
- Credit charges (mostly without credit and credit card debt)
- possible additional income from a sideline
- Rental and lease income
- exact information on real estate ownership and the car
In general, you will probably be more successful with the retiree loan, the sooner the loan is applied for. In addition, you should set the maturities as short as possible due to age. But do not overburden yourself financially. The amount of the monthly installment must fit the household budget, and all fixed costs still have to be financed. Therefore, seniors should never give up a household calculator. Some claimants are amazed at how much insurance premiums and other ancillary costs have to be paid with the pension. This insight does not have to lead to a loan waiver. Reason enough to deliberately plan financings and not to go too far into the framework for loans for retirees.
As a retiree roll over
Finally, one point not to forget: Even older bank customers have the opportunity to make a rescheduling. They benefit from the currently low base rates of the European Central Bank, which serve lenders as the basis for the loan interest rates. If you have been paying larger loans for several years and the loan agreement is still in effect for a few more years, a targeted rescheduling can lead to considerable savings. Even if borrowers have to pay a prepayment fee (capped to 1.00% of the remaining debt for consumer credit), such measures are always worthwhile. If you can currently finance higher credit lines, the new credit burden can be significantly reduced and the term can be shortened.
Please also read our guide articles on the following topics:
- Quick loans
- Loans for the unemployed
- Credit for students