Unfortunately today the financial situation of our country is not rosy. Spain has become one of the main EU countries with the largest number of poor workers. To this must be added a very high unemployment rate and job instability.
In this economic scenario, many families have had to return to parental homes. Making pensioners and retirees become the economic support of the family nuclei.
However, repeated reductions in pensions due to lack of funds (according to the Government) have pushed this population to the limit and the need to apply for loans.
For this reason, Private Lenders want to inform you about the characteristics of loans for pensioners and retirees. In this way, in case you find yourself in need of applying for a credit, you will be clear about what you need to be able to do it.
Loans for pensioners and retirees
As we said a few lines above, pensioners and retirees have become the economic livelihood of many families. However, it is a very complex reality. It should not be forgotten that most of them receive a pension whose amount is not even close to the minimum inter-professional salary. This has meant that many families have to “push forward” with a meager pension that barely exceeds $ 600.
To these very low pensions (in fact the lowest in all of Europe) must be added the withdrawal of certain services that for this age group were free until now. Given this situation, it is not surprising that these citizens are forced to apply for loans in order to make ends meet.
What do you need to know about loans for pensioners and retirees?
Although there are loan modalities, such as home equity loans offered by Private Lenders, in general, a series of requirements must be met in order to apply for a loan. In the case of this sector, these requirements are usually the following:
- Have a pension high enough to meet the repayment terms. If the loan represents more than 40% of the net income, it will hardly be granted.
- Present the last tax return. In this way the lender can check the relative to the pensioner’s annual earnings.
- Photocopy of the DNI and credentials provided by the Social Security that demonstrate that we are retired. If we also have a private pension we will also have to present the documentation that proves it.
- A photocopy of the current account in which the retiree wishes to receive the loan. Some credit institutions also include as a requirement a study of bank movements through which to check expenses and income month by month.
The importance of age
A very important factor when applying for a pensioner and retiree loan is the age of the client. Although many financial institutions have discovered that this sector of the population is ideal for doing business with loans (since they have a life pension), age contributes enormously to the fact that these can be denied. Usually:
- In the case of early retirees, traditional banking usually forces the client to take out life or amortization insurance in case the client dies or suffers an accident during the life of the loan. While amortization insurance covers up to 70 years, life insurance only covers up to 65 years.
- If you are a retiree, as a general rule they will grant you loans with a duration marked by your age. This must not be more than 75 years old. In other words, the amortization period will be established up to that age.
- If you are over 75 years old… the normal thing is that the financial institution forces the client to have a guarantor that responds to the debt in the event of death or accident.