Many seniors still have the desire to actively participate in life and want to finance larger consumer goods with an installment loan. Unfortunately, they often encounter rejection when they turn to their house bank or other bank with this request. The banks fear that because of their age, seniors will not have enough time to properly repay the loan until the end.
However, these fears are usually unfounded, as senior citizens are among those who prove to be very reliable bank customers with a higher than average repayment rate. In addition, they have a guaranteed income with the pension, which is paid even in the case of sickness and they are not threatened by unemployment.
Banks often make lending dependent on the simultaneous conclusion of a residual debt insurance. But it is usually too expensive and not worth it. As with other groups of people, senior citizens should also compare multiple loan offers before making a decision. In practice, however, it usually looks different, because many seniors are satisfied with the first credit offer that is submitted to them. So they often miss good and cheap alternatives.
Senior loans are often denied
For example, if an elderly couple, in their early 60s, they want to raise an installment loan to finance a new kitchen in their mid-60s, their path usually leads to the house bank. In the best case, the income situation is checked in the same way as for younger customers, in the worst case, the couple will immediately receive a rejection, as they are both supposedly too old to pay off the loan.
Now the couple can try to bring in additional security such as a guarantee from their children or grandchildren. Under certain circumstances, the bank will get involved and offer the couple a loan with a residual debt insurance. It has to be paid extra and the costs are not included in the annual percentage rate. If the couple does not settle for this offer, but is looking for a loan through a credit comparison on the Internet, it will find that there are a number of good offers that are much better than the offer of the house bank.More and more seniors are taking out a loan
The reasons for seniors to borrow are similar to the reasons that younger borrowers have. Often it is long-cherished wishes that are finally to be put into action after the end of working life. Some seniors would like to move again or rebuild their house age appropriate. In addition, repairs are required in many cases. All this costs money that the seniors either do not have or do not want to attack, as the savings are an important security. This can also be used to secure a loan.
The seniors who want to take out a loan follow a general trend, because it has long ceased to be so long to save until the desired sum has come together. Loans promise a quick solution and the immediate fulfillment of all wishes. There is nothing wrong with that, however, the seniors should also be critical of their wishes, because in any case a loan must be repaid, often over many years. That means more or less big financial restrictions.
That’s why older people are attractive bank customers
Even though it may be difficult for seniors to find a loan at all, they are attractive customers for the banks. This statement seems contradictory at first glance, but it makes sense. The pension is an absolutely secure income, in contrast to the salary of the employees, which can always be eliminated or greatly reduced, with the result that the loan repayment is seriously endangered. The pension always stays, even if the seniors get sick or if there are other reasons. If it is sufficiently high, you can easily pay monthly loan installments.
Once a senior citizen receives a loan, they usually pay him back. According to statistics, the repayment rate of senior citizens is well above the average of the population.
For these reasons, loan applications from seniors are rejected
Why are so many loan applications rejected by seniors when they are so attractive to banks? This is very important because there is another factor to consider. The secure pension contrasts with the increased risk of advanced age. For this reason, the likelihood of receiving a loan decreases with age. While 60- or 65-year-olds are still relatively easy to get a loan, the 70- or 75-year-olds look quite different. Then usually only loans with short terms of a maximum of 1 to 2 years are granted. In addition, more collateral is often required.
Credit comparison – loans for seniors
Unfortunately, many seniors do not carry out a credit comparison. This is mainly due to the fact that, in contrast to the younger generation, they often have a strong attachment to the branch of their house bank and trust the offers that are made in this branch from the outset. For younger customers, this bond is usually no longer or only very weak available. For them it goes without saying that they only sign a loan agreement after a loan comparison. In addition, they are much more familiar with the Internet and there with the possibilities of borrowing.
A credit comparison can be made from home. In addition, it only takes a maximum of a few minutes. There are different websites that offer credit comparison. A credit comparison has the advantage that all eligible offers are arranged clearly among each other. Anyone who not only knows in advance about a credit comparison, which loan form and which loan he favors, but can also give details of the desired maturity and the desired credit rate, has a much easier credit comparison. Why? This information can be inserted into a search mask or into a loan calculator in order to then determine the appropriate credit offers. Following the credit comparison, the desired credit for seniors can be applied for online if required.
Stay away from the remaining debt insurance
In many cases, when borrowing, the banks require the customer to take out residual debt insurance at the same time. This is especially true for seniors. The residual debt insurance is to take over the payment of the loan installments, if the customer can no longer. In the event of death, the open amount would be balanced. What sounds good at first glance is usually not worth looking at second glance. An exception is at most the residual debt insurance, in which the costs are included in the annual percentage rate of the loan. If they have to be paid extra, it can be assumed that these insurance policies are usually overpriced. Again, it should be said that in case of doubt always a credit comparison is worthwhile.
Conclusion loans for seniors
Previously, they were a rarity, today they are normal – the loans for seniors. People are getting older and stay fit longer and longer. Accordingly, they have the desire to be active and meet consumer needs. This is often done with a loan. Unfortunately, many banks and savings banks have not yet adjusted to the changing social reality and reject loan applications from seniors – even though they have a secure pension and a good credit rating.
It often looks different with online banks, direct banks or intermediaries. Of course, they also offer loans for seniors. To find such offers, to get a good overview and to find the right offer for their own needs, a credit comparison is recommended. For a credit comparison, there are special websites that always have the latest offers available, are available around the clock and are easy to use.