Loan Options for Retirees

Loan options for retireesIf you are a senior citizen who is suffering from a shortage of money, you may find that you are having problems acquiring the right amount of finance through the normal channels. However, all is not lost, as a number of companies are starting to offer finance packages aimed at those people who are in their retirement years. In fact, a number of finance companies are offering loans and financial solutions that have lowered their interest rates, so when you do borrow money it will be a lot more inexpensive. This means that the loans are more affordable to those people who are no longer in full-time employment, and for retired people, these are the kind of financial packages that will seem attractive to them.

There are times in everybody’s life when they get thrown the odd financial curve-ball, and this typically involves the sudden need for some financial assistance. That is when you are going to need some quick financial help and that will entail trying to borrow money from somewhere, and this can work out to be more difficult than you think due to your age. Thankfully, thanks to the lower interest rates, it is a lot more cost effective to borrow money than it has been in many years, as in the past, the high interest rates put a lot of people off borrowing lots of money. In addition to the lower interest rates, there are now a number of lenders who are offering loans that require no collateral whatsoever.

Of course, most of the normal financial institutions and banks are less likely to be in a position to offer you a loan because of your age. On top of which they will often need proof of your income levels from your pension or other financial income. For people who own property and receive an income from renting it out, are often more likely to be in a favorable position with the banks than someone who does not, however, that does not mean that you are going to be turned down straight away. One option is to ask your bank for a loan. They will be more likely to give you a positive answer because they will already be familiar with your financial situation, your outgoings and income for example, than a bank that you do not have an account with.

If you are only looking to borrow a relatively small amount of money, then your best option maybe to apply for a credit card, as the credit limit on some cards can be quite high, and can run into the thousands. However, if you need to borrow a larger sum, then it is worth seeking some advice from your own bank about the options available to you, they may be more sympathetic than a bank who has not currently got your custom.

For those of you who own your own home, then you maybe able to secure a substantial amount of money by using your home as collateral. There are many companies out there who are now specializing in offering loans to retired people by helping them to release money that they have tied up in their homes. Of course the downside is that your home maybe at risk of repossession if you do not meet the monthly repayments, so it is best to work out how much you can afford to pay each month before taking out such a loan.

Retirement does not need to mean that you have no access to borrowing opportunities. It may just mean that you have to look a little bit harder for a solution. There are lenders who are willing to offer loans to retirees and there are plenty of other options open to you both long and short term.

Author Bio: Hugh Tyzack is the managing director/founder of . He is an expert when it comes to loans and personal finances. Hugh also enjoys playing the piano and listening to music. Why not hook up with Hugh on Twitter @badcreditloans8 and also on Google+.

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  1. June 18, 2013 at 7:16 am — Reply

    I know some people who have been retired for years now but have mortgages, car loans, etc. because the interest rates are so low on the loans.

    • Grayson
      June 21, 2013 at 10:12 am — Reply

      When the interest rates are low, I think loans can be a good thing as long as you are using your other money to make more money.

  2. June 18, 2013 at 8:11 am — Reply

    My parents were forced to take on a mortgage in their early 70s when a natural disaster damaged their home. My dad went for the longest term he could get to make the payments as small as possible because he will just let the sale of the house pay off the mortgage when they are gone.

    I have been reading lots about reverse mortgages and I may take that when I am 60 to let me retire a few years earlier but still stay in my home.

    • Grayson
      June 21, 2013 at 10:14 am — Reply

      Sorry to hear about your parents. I think reverse mortgages are dangerous and they are all the hype theses days.

  3. June 18, 2013 at 8:19 am — Reply

    I remember seeing commercials for “reverse mortgages.” That always seemed to me a smart way to handle things if you don’t have anyone to leave the house to.

    • Grayson
      June 21, 2013 at 10:14 am — Reply

      I am not a fan of the concept of a reverse mortgage. It is just another loan and someone will have to pay if off especially if the company cannot sell the home for the loan amount.

  4. June 18, 2013 at 8:30 am — Reply

    I seriously hope that I don’t need a loan when I’m a senior citizen!!! =/

  5. June 18, 2013 at 8:33 am — Reply

    I would prefer to have no loans when I retire, but if the interest rate is super low, then that’s not always a bad thing.

    • Grayson
      June 21, 2013 at 10:19 am — Reply

      If there is a low interest rate, then you can really use your money for other purposes.

  6. June 18, 2013 at 8:49 am — Reply

    I really don’t know that I would want a loan when retired, though I could understand it if rates are low enough. I would avoid a reverse mortgage at pretty much all costs though, there are just too many risks involved and is not worth losing a home over.

    • Grayson
      June 21, 2013 at 10:19 am — Reply

      I am with you there John. I am skeptical of reverse mortgages, especially when they become all the rage.

  7. June 18, 2013 at 9:12 am — Reply

    I like reading a post that includes the downsides of taking money from your home. Great, balanced piece on a tough issue for people with few places to turn during retirement.

    • Grayson
      June 21, 2013 at 10:20 am — Reply

      Thanks for stopping by Joe!

  8. Jake @ Common Cents Wealth
    June 18, 2013 at 12:00 pm — Reply

    This is great advice. I know my grandparents are all debt free, but I can see why some retirees would keep a loan just because they are at such low interest rates. Personally, I wouldn’t want any loans if I was retired, but that’s just my opinion.

    • Grayson
      June 21, 2013 at 10:20 am — Reply

      It depends on the situation for me. I can see where a loan could be a good thing with low interest rates, but it depends what you are doing with the other money.

  9. June 19, 2013 at 6:09 am — Reply

    Interesting. I hate to see someone get into a reverse mortgage who does not understand the ramifications of how that works. So sad. Great post.

    • Grayson
      June 21, 2013 at 10:22 am — Reply

      I think people are jumping into them because they are not knowledgeable to the ramifications of what they do.

  10. Jean
    May 14, 2015 at 1:03 pm — Reply

    I need a loan for debt consolidation since I had to retire before I really wanted due to injury. I had wanted to get my credit cards and other things paid for before I left work, but since I left earlier than I wanted, I still have a lot of debt to repay. I get enough income to pay on the bills, but never enough to get the balance down as fast as I would like. When combining all the smaller payments, I would have no problem making larger payment to one place to pay off all the debt sooner. I have applied to 3 different places and been turned down because of the debt and credit ratio. What do you recommend I do to get the debt paid faster? I need help.

    • Grayson Bell
      May 18, 2015 at 1:39 pm — Reply

      I unfortunately do not have an idea on where you can get a loan at least not from the traditional lenders. Have you looked at Prosper or Lending Club for P2P loans? You might be able to get a loan there as it’s a different model than traditional lenders.

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