You can still access finances if you are retired. Read on to find out what your options are.
As you move forward in your older years, your lifestyle changes, just like your finances. When this happens, you may find that access to finance is not as easy as earning income from employment. However, there are some lenders who consider you a personal loan as a retiree. These loans can help you get money if you do not have enough time to save or if you do not want to tap into your own funds. Find out what your loan options are in our guide below.
What kind of retirement situations are considered?
- Self-financed retirees. If you earn income from investments such as rental properties, super or your own nest egg, you are considered a self-financed retiree. If you are in this situation, you may need access to financing because you do not have cash or you need access to financing faster than your situation allows. Although your situation may complicate the assessment of some lenders, you can still qualify for a personal loan. Make sure you have the most documentary evidence of your assets and income that you can locate to prove to the lender that you will be able to manage your loan.
- Those who receive an old-age pension, a pension supplement or a disability pension. Earning Centrelink payments as income, even if it’s your only income, does not exclude you from finances. See the chart below for available loan options.
- Elderly Australians who still have a job. If you have a steady job, even if it is only a part-time job, this income will be taken into account by the lenders. Remember that the minimum income criteria will apply, so check this before submitting your application.
- Nonresidents. The majority of lenders require that you be an Australian citizen or a permanent Australian resident. However, some lenders consider non-residents to be loans even if they are older. You can compare the personal loans of temporary residents on this page.
- Those in difficult financial situations. If you have a low income due to family circumstances, debt or need emergency funding, you have a choice. Call the free help line at 1800 007 007 to find out what’s available.
What loan options can I consider as a retiree?
Below is a list of personal loans available for comparison at lookat. You can find those who consider you for a loan when you are retired and the eligibility criteria that you will have to complete to apply.
Looking for information on real estate loans for retirees?
Loans available for retirees
As a retiree, different types of personal loans are available to you.
- Personal loans guaranteed. These loans require that you attach a valuable asset as collateral and you can in return borrow the value of that asset in the form of a loan. Vehicles, term deposits or equity in your home are examples of assets.
- Unsecured personal loans. You do not have to attach any assets to this loan as it is not guaranteed. You can use this loan for investment purposes, to take a vacation, buy a used car or to consolidate a debt.
- Car loans. If you are looking to buy a new or used vehicle, you may want to consider a car loan. These loans offer competitive rates because the vehicle you buy is used to secure the loan.
- Reverse mortgages. These loans offer you a line of credit, a steady stream of income or a lump sum payment by borrowing against the income of your home. While reverse mortgages have traditionally been considered high risk, reverse mortgages are being used more and more.
- Discovered. This is a convenient credit product that allows you to pull over your account balance into your current account.
- Short-term loan. If you have bad credit or need emergency financing, consider a small loan. Keep in mind the high cost of these loans before applying.
- Bad loans There are always loan options if your credit history shows some black marks. Some loans are available up to € 5,000 or more for bad credit applicants.
- Debt consolidation loans. Some loan options are specifically suited for debt consolidation if that is the purpose of the loan you have in mind.
Linda and Grant
As a couple, Linda and Grant receive € 1,270 in super refunds every two weeks. They have paid for their home and have a small source of additional income from a rented investment property. Although their payments are sufficient to support their lifestyle, they can not afford to make larger purchases. When their car stops working, they want to take out a personal loan to buy a replacement vehicle.
Option 1: They are currently at the Commonwealth Bank and want to take out a loan with them. They watch and see that they can borrow € 5,000 at an interest rate of 9.49% pa * for four years. Although the refunds of € 125.59 * are manageable, CommBank requires the vehicle to be less than five years old. Linda and Grant can only afford one older car.
Option 2: An unsecured loan option, the Melva bank Ready Credit will allow them to borrow € 5,000 at a fixed rate of 7.9% pa * for a term of 2 years. They appreciate the fixed rate because it will allow them to plan their repayments and the competitive rate offered seals the deal for them. All they have to do is prove that they have a taxable income of 35,000 euros a year and that they can buy the car they had in mind.
How do I know if I am eligible?
If it is unclear whether you meet the minimum eligibility criteria, for example, you may have income from investments that are not “regular”, then it is best to contact a lender before submitting your request. Each personal loan application will be recorded in your credit file and may affect your chances of being approved for future loans. Lenders will not be able to tell you with certainty if your application will be approved before submitting your application, but they may be able to specify certain criteria or provide you with additional details.
To give you the best chance of being approved, make sure you have all your information before starting the application. This includes:
- Personal informations. Your name, contact, credentials and details about your family situation.
- Loan details. Explain how much you need and the purpose of the loan.
- Financiers. Remember to include all sources of income and provide evidence about it. You will also need details about debts and liabilities.
- Assets. What assets do you own? This can be your own home, rental properties or vehicles.
You may be able to save the form if you do not have all your information to return later, or download a PDF file from the lender’s website to find out everything you need before you start . Personal loan requests usually do not take more than 10 to 15 minutes if you have all your information in hand.
Finding the right retirement loan is essential to keeping your finances safe – make sure you compare all of your options before submitting your application.