Installment loans for pensioners are related to operations with a higher level of risk, since older people no longer work, but live mainly through pensions. And its size, as it is known, is significantly lower than the amount of income that citizens of working age receive.
Therefore, not all banks are ready to lend to retirees. Some in their claims immediately indicate that at the date of the final repayment of the debt, the borrower’s age should not exceed the pension.
Features of lending to pensioners
Banks do not like to lend to retirees for two reasons:
- low income;
- high risk of ill health and death.
Therefore, in order to reduce the possible risks, an installment loan for non-working pensioners is issued on excellent conditions than for other categories of borrowers. Most often when lending banks use the following methods to reduce the risk of not repaying the loan:
- attraction of guarantors or co-borrowers who, during the term of the contract, will not reach the retirement age;
- life and health insurance. It should be noted that the insurance rate for pensioners is higher than for other categories of clients, therefore, the loan itself will cost more for them;
- registration of collateral. In order to minimize risks, banks require that real estate or movable property be secured.
In addition to the above options, each bank establishes, according to its credit programs, the boundary age of potential borrowers, reduces the maximum loan amount. The current rating of banks with the best loans for pensioners can be found here: http://nuzhenkredit.ru/pensioneram/
What influences the lending decision?
In addition to the fact that the pensioner must meet the standard requirements for residence and registration, he must also pay attention to their income. If they are not enough to repay the loan on a monthly basis, then there can be no question of signing a contract. Usually the main source of income of a pensioner is a pension.
In addition to it, older people may have additional sources of income:
- interest on deposits;
- rental income of movable or immovable property;
- dividends on securities;
- salary from formal / informal employment;
The higher the level of solvency, the greater the chances of a pensioner to get a loan.
The next point that people of retirement need to pay attention to is that banks are more willing to issue a credit card or issue a consumer loan to retirees who are in their service.
The benefit to potential borrowers is as follows:
- no need to document income information;
- redemption is carried out automatically due to receipts;
- lower interest rate than other financial institutions;
- speed and ease of design.
The need to contact another bank with a pensioner may arise due to age. If the boundary age of the borrower does not meet the requirements of the servicing bank, which means that having reached a certain number of years, the client will not be able to arrange an installment loan in it.
Up to what age they give credit to pensioners depends on the internal policy of the bank. In some financial institutions, this period is longer, in others they do not accept applications even from people who have just retired.
Considering that the retirement age in Russia is 60 for men and 55 for women, then most beginning retirees still have every chance to get a loan for a period of at least 5-10 years.
It should be noted that bank did not hit the top ten leaders in consumer lending, and it can be very interesting even to pensioners. After all, in spite of everything, people are credited here until they are 85 years old. Few banks can boast of similar lending programs.
Lending conditions for pensioners
It should be noted that not all banks have special lending programs for pensioners. In the absence of those, you can just get a loan on general terms, the main thing is that their age does not exceed the limit. And of course, banks are denied credit if they fail to meet other important criteria of a financial institution.
It is possible to reduce the installment loan payment on condition that the pension is transferred to bank immediately by 5 percentage points. There is also an option to connect to the option “Guaranteed rate”, its cost is 3.9% of the loan amount. But at the same time, if the client fulfills his obligations in full, all interest is recalculated at the rate of 14.9% per annum, and the difference is paid to the client’s account.
Why banks lend to pensioners
At the end of 2017, in accordance with the data of the Equifax bureau of credit histories, the total number of retired borrowers does not exceed 16% of the total mass of debtors. In general, the number of people of retirement age who have issued loans is about 16 million people.
Why, despite all possible risks, banks continue to issue installment loans for pensioners. The answer to this question is as follows:
- The payment discipline of retirees is much higher than that of other borrowers. Often, retirees will save on themselves than they will allow a delay in the bank;
- pension is a stable source of income. No matter how big or small it is, people get retired every month;
- pensioners usually own property. Therefore, in the event of default, the bank will be able to recover the debt;
- in case of death, the loan of the borrower along with the property will be inherited. There are two possible solutions: the heir refuses new property and does not pay the loan or pays the debts of the deceased and becomes the full owner of the property.
Installment loans for pensioners: the main thing
Loans for retirees are not particularly popular banking services. Since the terms of lending for people of retirement age are worse than for others. The reasons for such actions by banks are quite logical: low income and high mortality risk.
Therefore, if pensioners can get a loan, its amount will be far from the maximum. But on the other hand, it all depends on the solvency. If the client’s pension is higher than the average, or he has additional sources of income, then you can claim a larger amount.
Also, when looking for a potential loan, retirees should first of all contact the banks through which they receive a pension. There, it is easier for them to get a positive decision and at least a small, but still a loan, or to issue a credit card. If you don’t want to consider the application in your bank, then you should look for banks where there are specialized pension programs.