Access to credit for people a little bit older with age is certainly not a very simple thing, especially because of some constraints to be respected.
The greatest difficulties usually lie in the requests for mortgages since in the vast majority of cases a certain registry limit must be respected within which to pay off the debt.
In fact, sector-specific research carried out on a fairly large number of mortgages offered by various credit institutions and banks, has shown that the registry requirement to have access to the relative credit is around 78 years. This translated into personal age means that people over 65 cannot technically and concretely receive a large loan or at least they cannot have an amortization plan that is greater than 10 – 15 years.
How to have a loan for the elderly
For this reason, the financial product that most of all manage to meet the needs and requirements of the so-called elderly is undoubtedly the loan.
This is further justified by the fact that lenders in recent years have devised and placed on the market three different categories of loans for the elderly which make everything very usable and simple.
Transfer of a fifth of the pension
The first type is what is called the transfer of a fifth of the pension. This is a rather used format and in essence, it is a personal loan in which the credit institution has the contractor’s pension as a guarantee.
It is called an assignment of the fifth since the amortization plan is structured in such a way that the maximum monthly amount is equal to 1/5 of the applicant’s pension. It is a very convenient and inexpensive option as the reimbursement takes place automatically by holding it directly from the pension amount. We said that it is inexpensive since it offers the possibility of being able to save the cost for the payment service due to the postal payment slip.
As for the rate, it is for most cases of a fixed type with an amount that can reach 75 thousand dollars as long as the amortization plan ends before the applicant has completed his ninetieth year of age.
Among the other constraints required, the most important one which gives life at a certain cost is that relating to the obligation of a life insurance policy. In practice, the bank protects itself from a possible death of the contractor, while the repayment of the loan is still ongoing. In this case, the insurance will compensate the Bank for the remainder of the reimbursement which, for obvious reasons, the policyholder was unable to honor.
The second type is that of the so-called lifetime loans. Lifetime loans are a kind of pension supplement. Usually it is requested by those who, having a pension of a rather small amount, are unable to reach the end of the month. In practice, the credit institution that gives this type of loan does nothing more than paying a certain fixed monthly amount into the current account of the contractor.
So, there is a first fundamental difference with the classic loans and that is the agreed amount is not given to the contractor in a solution immediately but is paid monthly just as if it were a private pension. To access life-long loans, you need to have a certain minimum personal age that usually is around 65 and above all be a homeowner.
This last aspect is fundamental because, at the end of the lifetime loan and that is with the disappearance of the contractor, the property automatically passes ownership to the credit institution. However, it also offers the possibility at any time to be reimbursed and therefore extinguished as long as the related interest is also paid.
Another feature of the lifetime loans is that they provide for a minimum amount of around 30 thousand dollars on average and a maximum amount of 350 thousand dollars. In addition, they can also access those who during their life turn out to be bad payers or protested.
Specific loans for the elderly
The third type is that of the so-called specific loans for the elderly. These are traditional loans that banks create exclusively for seniors.
In fact, the minimum personal age to access it is around 60 years for fairly small amounts and in any case, they almost never exceed 30 – 35 thousand dollars for an amortization plan within 10 years with monthly repayments.
It is accessible for any possible and imaginable purpose with an interest rate that can be both fixed and variable. A very useful product which, however, requires the classic guarantees and that is the paycheck in the case of an employee, the tax return in the case of a self-employed or freelancer and the pension certificate in the case of a pensioner.
If you do not fall into any of these three profiles then the guarantee can be represented by a mortgage on a property or reached by an acquaintance who acts as guarantor.