Pension is a great time when you may not work, devote time to your hobbies, travel, communicate with your family and walk in the fresh air. All basic life expenses are covered by your pension. However, no one is immune from life situations when it becomes necessary to make unplanned expenses. Your pension may not be enough to spend additional expenses on unexpected car repairs, home repairs or cover medical expenses that you did not expect after all other important expenses. In order to solve such unforeseen problems personal loans were created, allowing you to quickly get cash for financial support.
What is a personal loan?
The purpose of a personal loan can be any expenses most without restrictions, at the discretion of the borrower. They can be used for making small and large purchases, or for paying or combining other loans. Lenders do not limit the borrower in where he will spend a personal loan. Personal loans for pensioners usually have a fixed annual interest and a simplified procedure for processing. Most often, these loans do not involve collateral and offer small amounts of loans starting at $ 500. Depending on some conditions and the creditworthiness of the borrower, the amount of money for a personal loan can reach up to 100 thousand US dollars.
Moreover, most lenders who offer personal loans for pensioners do not produce a strict credit check. They rely on the current income of the borrower and his overall financial condition. This may be a very suitable option for pensioners whose income is limited to a fixed amount of pension. It should be borne in mind that a personal loan, unlike a credit card, has a very specific, definite amount that does not increase. Personal loans are usually issued for up to five years without extension.
Personal loans for pensioners : when to start paying attention?
The main thing is to be attentive to what you sign. Not all lenders can offer acceptable terms for retirees. For example, the proposal to open a joint account with you and a lender should not be considered as acceptable, as it may further impose certain restrictions on your use of your money. Of course, it is convenient when money is automatically deducted from your pension, but you should not give away in this way a part of your already limited income. Do not risk your pension, which is your only source of income.
Contact the company you are already dealing with
Surely you have been cooperating with any bank or other financial institution that knows you for many years. You can contact your financial company for a personal loan. Such a company with which you work already has all the necessary information about you, knows which borrower you are, how you pay and what financial resources you have. Even if this company does not deal with such financial products, then perhaps, they will be able to recommend partners with whom you could safely deal. In addition, such a company or bank will be able to recommend you as a borrower and provide the necessary financial information. So you will have more chances to get approval for a personal loan, and also, perhaps, to get more attractive conditions for a personal loan.
Take an interest in your credit rating
All your loans, payments and their timeliness, the balance on your credit card affects your credit rating. While there is no urgent need for urgent money you have the opportunity to improve your credit rating. After all, in the event of unforeseen expenses you will not have time for this. To improve your credit score pay your old debts, increase the credit card balance up to 30% of the total limit and dispute all possible inaccuracies that have occurred. This process does not happen immediately, but it may take several months, so it is better to start doing this as early as possible in order to gradually raise your credit rating.
So in the eyes of lenders, you will look less risky borrower. Find out in one of the credit bureaus what your credit rating is today. If you manage to raise your credit score to 720 and higher, then you will have every chance of getting a loan in most financial companies.
One type of personal loan is Payday Loans. The annual interest rate here will be quite high, but if you can confirm your regular income you will receive money very fast. However, it is worth remembering that such loans are issued only for a short time, usually from two weeks to a month.
A loan secured by real estate
If you own a property, you can use it to get a secured loan. In this case you will have to pay only the annual interest rate and possible fees, but the rate will be as low as possible. With this loan you will get the best conditions and the lack of verification of your financial condition and your sources of income.
USDA home renovation loan
In case the urgent expenses incurred are the expenses required for the repair of your house in the amount of up to 20 thousand dollars, then you can use the USDA Housing Repair Loan from the US Department of Agriculture. This type of loan is available for those who has a low level of income. The interest rate is minimal and is only 1%.
If you are a pensioner with government assistance
Credits for such pensioners are issued under the following conditions:
- Pension scheme
- A certain capital is attached to your assets, due to which you can earn income. You can use this scheme if you are not entitled to an Age Pension, but you have already reached retirement age.
- Advance payment
When you receive regular payments through Centrelink being a pensioner you can make an advance payment in the amount that you receive over a period of one to three weeks. The big advantage of this is that you will not have to pay interest.
Our blog to help
We are engaged in loans and our experts have information on any type of loans that may interest you. Visit the blog on our website and learn from it what you need to know about personal loans for pensioners. If after this you still have questions you can write to us. Our specialists will provide you with all the information and will assist in applying for the type of loan you are interested in.