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Senior loans – everything you need to know



 

Do banks offer loans for seniors? Retirees are just dream customers. The need for additional funding is mainly due to low amounts of retirement benefits. In turn, for a banking institution a steady, documented cash flow is one of the best collateral. Such credibility causes that more and more banks are preparing financial products dedicated exclusively to seniors. Senior loans – everything you need to know. This is our topic for today.

Senior loans

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Most often, pensioners who do not receive enough money from the state to afford renovations, trips or private treatment apply for a loan or a loan. All unplanned expenses require an injection of cash, and hardly any senior has savings. Daily living costs are also so high that many older people find it difficult to cope. It is not only about the prices of medicines, but also, unfortunately, lending money to others: children, grandchildren and even friends. Naivety and lack of assertiveness in this area often causes pensioners to fall into the trap of growing debts (and not their own), which does not improve their situation. Not only that they are struggling with financial problems and counting every penny, they must also pay the debts of others. Interestingly, despite this, they show amazing diligence in paying off their obligations, which are, among others loans for seniors.

Senior loans – statistics and research

Data presented by the Economic Information Bureau show that only 1.3% of pensioners have problems with timely payment of receivables. Banks appreciate such honesty and willingly grant loans to seniors. In 2018, the number of indebted seniors reached over 2.88 million people, and their average debt at that time reached almost PLN 11,000 per person. The source of this number are mainly consumer loans.

Interestingly, women constitute a larger group of indebted people, but if you look at the amounts necessary to pay, this value is divided in half between both sexes.

Can pensioners count on discounted treatment? In terms of formal requirements and the need for timely repayments – certainly not. Some banks offer lower margins and commissions to such clients than in the case of professionally active persons. It is also possible that, given the age of the borrower, the formalities will be maximally simplified and the decision issued faster. It is also worth checking whether there is a possibility of delivering her home via a postman – just like retirement.

Factors taken into account when granting a loan to a pensioner

The very fact of having a stable income in the form of a ZUS social security benefit and statistics showing diligence in paying off debt is not everything, and retirees and other clients must meet several conditions to receive money. So what factors are taken into account? Undoubtedly, credit history. Retirees, as older people, had a lot of time to build it, so it probably contains enough information on the basis of which the bank can make a decision about a loan.

It will also take into account the age of the pensioner (people over 75 may encounter difficulties in receiving such financial support) and the regularity and amount of retirement benefits. Depending on the data collected, the bank issues a verdict whether (or for what amount and for how long) it will grant a loan to the pensioner. Loans for pensioners will be considered in exactly the same way.

Can pensioners count on discounted treatment? In terms of formal requirements and the need for timely repayments – certainly not. Some banks offer lower margins and commissions to such clients than in the case of professionally active persons. It is also possible that, given the age of the borrower, the formalities will be maximally simplified and the decision issued faster. It is also worth checking whether there is a possibility of delivering her home via a postman – just like retirement.

Loans for retirees and the age of clients

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Seniors, due to guaranteed stable income, are assessed by banks as a reliable group of clients, which does not mean that each of them can get a loan. As we have already mentioned, the borrower’s age may stand in the way. Many institutions refuse to grant a loan if the customer is over 70-75 years old. It is hardly surprising – the more old age, the less chance that the commitment will be repaid in full. As a rule, banks do not grant loans to such clients for a period longer than 8 years. For many of them this may be an unsatisfactory solution, which is why some institutions (e.g. Bank Pocztowy) offer an alternative in the form of purchasing special life insurance policies.

In the event of the debtor’s death, the insurer repays his financial obligations. This is, of course, an additional cost, but let’s consider that if a senior wants to take, for example, a mortgage and spread its repayment over at least 20-30 years, such insurance will be one of two chances to get it at all. The second is to have a guarantor (a requirement from Getin Bank). Theoretically, therefore, seniors do not have a closed road to obtain either consumer or mortgage credit.

Payday loans for retirees

When a bank refuses to grant a loan to a pensioner because of their age, non-bank companies can help. In fact, each of them has a specific age range of the clients they work with, which is why it is most important for a pensioner to find one that has the highest age limit. Currently, the leader in this area is the company Ratkomat or Aasa cooperating with seniors up to 80 years old, then Vivus (up to 78 years old). This is rare because most loan companies agree to financial support for people under 65 years of age.

The advantage of such a solution is a simplified way of inference. Not every senior enjoys good health and not everyone can spend a few hours in the bank to fill out the necessary documents. The instantaneous pay is received without leaving home, and the whole process takes a maximum of 2 days (although most often the decision appears the next day from sending the application). If the pensioner is not able to use the computer themselves, they can always ask children or grandchildren for help. And if this is not feasible, it is worth contacting the consultant of the company, who will inform the customer by phone about the way to get a loan.

Offers for seniors

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The offer of loans for seniors is very diverse – it results from a good understanding of the needs of this group of clients. However, no bank will ever enjoy such trust as a postman who brings a pension or monthly pension. Elderly people, if necessary, usually borrow money using the propositions of Bank Pocztowy. Meanwhile, there are other institutions, such as Getin Bank, which grant loans to seniors for really large amounts.

What is the whole process of applying for a loan for seniors?

When the customer successfully passes the verification of age and creditworthiness, the bank, based on the last retirement pension, will determine the amount of fixed net income.

If it turns out that the calculated amount of income is too low, and thus the customer may have problems paying off the debt, the financial advisor will propose to the senior that he thinks about taking a loan with another person, e.g. a spouse. Then, as the creditworthiness increases due to the increase in monthly inflows, the chance to get a loan increases. A similar situation may occur for a pensioner if he asks for money from PKO Bank Polski. The low amount of retirement benefits will mean that without the support of the other borrower, the bank will not accept our application positively.

To find the best solution for you, we recommend that you familiarize yourself with the offers of several institutions. Currently, Santander Bank’s proposals are indicated as the most transparent and accessible to pensioners. Regardless of which one you use, let’s carefully review the tables of fees and commissions, as well as the terms of the contract, because sometimes low interest rates on loans can mean additional requirements and costs.

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