Everyone has certain needs and desires for material things. Some are of course absolutely necessary (eg washing machine, car or heating) others are luxury goods (eg vacation, television or jewelry) that could theoretically be dispensed with. However, many people do not have the financial means to look for luxury goods or absolutely necessary goods. Older people in particular, ie retirees who have worked all their lives, want to fulfill one or the other wish in the last stage of life.
After all, they worked hard for it. Unfortunately, the pensions in the country are not exactly abundant, even if the savings saved are not enough, it is difficult to acquire certain things. In addition, pension security will no longer be guaranteed in the coming decades. The reason for this is the demographic change that is making people in the country grow older. This is a real dilemma that needs to be overcome. So what to do if you want to fulfill a wish in old age but there is no money?
Installment loan for pensioners as a solution to the problems
There are banks that can fulfill these wishes for pensioners by offering an installment loan for pensioners. With this type of loan, monthly amounts have to be repaid by the borrower. In return, pensioners receive a predetermined amount of credit in advance. As with any loan, however, retirees also have to provide certain collateral in order for an installment loan to be approved for retirees. Many retirees now work on the side, so that they can earn a small income in addition to the pension. This is a positive prerequisite, especially if the pensioners can also show other properties such as real estate.
Admittedly, banks take a special risk with an installment loan for pensioners, since it is not certain how long the pensioners will live. Because then the monthly repayment rates could of course no longer be maintained. That means the banks would stay on the money. Therefore, the offer of an installment loan for pensioners is not very widespread among credit institutions. So far, only a few banks offer such a loan.
Possible conditions for an installment loan for pensioners
The maximum possible loan amounts depend on course on the collateral of the applicant. Generally, however, amounts between 3,000 and 250,000 are possible. The term is also very flexible and can be fixed between 12 and 120 months (1 – 10 years). Of course, this also depends on the age of the applicant. Accordingly, a pensioner in early retirement can apply for a longer term than an 80-year-old pensioner. The average annual interest rate is around 4.50%.
The monthly repayment rates result from the loan amount and the term. With a loan of 5,000 and a term of 5 years, this is approximately 100 per month. Most of the time, the loan can be used freely, which means it doesn’t matter whether the loan is used for a washing machine or a vacation trip. In general, it can be said that it is a very generous thing if banks provide an installment loan for pensioners. Perhaps more banks will be added in the next few years.