Construction financing: loans are a way to afford long desired desires or necessary purchases. A new washing machine, replacement for the aging car or a condominium – if you want to afford something these days, you need a bulging bank account, or?
Wrong, with a loan it is possible to make major expenditures without having the financial means to do so. However, since banks have very strict lending requirements, the question arises whether seniors are able to take out a loan at all. In the following article we will get to the bottom of this issue and tell you about the requirement for credit approval.
Is a loan for seniors possible at all?
In general, it can be confirmed that loans are approved even at an advanced age. Nevertheless, it must be stressed that the chances are much worse than with a younger customer. Thus, the probability of loan approval decreases from the age of 50. Year of life. Banks are very concerned about security and only provide financial resources if there are guarantees that the debt can be paid off. Because statistically, they do not have enough lifetime left to pay back the full amount. Accordingly, seniors sometimes have to spend a long time searching to find a financial institution that will accept the application. In contrast, however, there are providers that offer special deals for seniors. With a partial sale of real estate, considerable assets can be freed up without having to go into debt. Deutsche teilkauf, for example, offers a no-obligation consultation and a free quotation, which doesn't even make customers in their 70s shy away.
Senior loan: only rarely is there a fundamental rejection
According to studies, financial and insurance institutions rarely turn down requests for senior loans. A review showed that out of 73 banks and insurance companies surveyed, there was only one institution that generally refuses loans over 65. Nevertheless, a higher interest rate is often charged or a lower credit line is made available to exclude a large loss.
Take up credit in the age: income situation is examined
In addition, the financial situation of the applicant is closely scrutinized. After all, the banks want to get an accurate picture of your current and future income situation. This examination begins before retirement age is reached. Thus, from the age of 50, it is required to show a detailed pension information. Furthermore, inquiries are also frequently made about supplementary pensions such as the company pension plan or other precautionary measures.
Some banks also ask for information about the heirs. Applicants are advised not to respond to every demand and request and to compare offers.
Requirements for a pensioner loan
To increase the likelihood that your application will be successful, some conditions should be met:
– residence in germany
– secured pension
– monthly expenses were to be well below income
– positive credit rating
in general, the younger the better the chances that the loan will be approved. However, if you can pay off high monthly installments, a loan can still be approved even at 75 years of age. It should be noted, however, that banks are reluctant to grant large loans above this age limit. Get a loan in the amount of 25.000 euros, the absolute maximum has already been reached.
With these means you have a better chance of getting a loan
Fortunately, it is possible to positively influence the decision of banks. So it is even possible for customers who exceed the 75-year limit to take out a loan.
1.) real estate: they serve as a great security, which will pay off the loan in case of emergency.
2.) guarantee: a guarantor can positively influence the application process.
3.) co-applicants: if the burden is shared between two shoulders, banks are more inclined to grant loans.
4.) residual debt insurance: the residual debt insurance is an expensive but worthwhile investment. Because in the event of death, the insurance company steps in and takes over the remaining debt. This guarantees the bank the necessary security to be reimbursed the full amount of the loan.
5.) lien: another option is to use savings, securities or jewelry as collateral.
6.) SCHUFA score: banks use the SCHUFA score to assess the creditworthiness of their customers. Accordingly, it is a good idea to obtain a self-report before applying for a loan.