Today, there are many elderly people in the Swedish population who want to borrow money to finance what they dream of. Earlier, there was something called a Senior Loan, it was for all pensioners, but this loan disappeared a couple of years ago.
Instead, many lenders today offer other types of loans such as private loans to older people. Among other things, they can take advantage of the usual loan variants available.
If you are retired and in need of borrowing money, there are a number of advantageous loans to apply for and age is usually not a big problem.
What is a senior loan
Loans aimed at older people are often called senior loans, since they are for the country’s seniors. Just because you have grown older, the opportunity to borrow money is not gone. On the contrary, there are several loans to take part in and apply for.
Senior loans are a popular choice for many and borrowing as a pensioner is simple and easy. With a senior loan you can buy a much needed product or pay an unexpected cost that has arisen.
Senior loans can sometimes receive some criticism for the high interest rates that are incurred and high risks for doubled debt.
Usually, the interest rate on a senior loan is just as high for pensioners as if a worker with a permanent job and income takes the loan. It is important to have your private finances
in the back of your mind and not borrow more than you have the opportunity to repay with your pension.
Loans for pensioners and seniors
If you want active retirement time, a loan can help one to fulfill his or her dreams. Maybe you want to be able to afford to start playing golf or go on a trip with your grandchildren. Something that is often difficult to get as a pensioner is mortgage loans from the banks, but there are other loans available.
Generally, as a senior, you can take part in the same loan as younger people can. Private loans, quick loans and secured loans are all available to pensioners. However, getting a loan as a senior can be more difficult because you have a lower income and a lower life expectancy.
Mortgage pension for seniors
A popular alternative for today’s pensioners is to take out a mortgage loan, also often called mortgage pension. A mortgage loan is a loan with security The Swedish Mortgage Pension is an independent consumer credit institution that offers this type of loan. Mortgage pension is a capital release credit that offers seniors over 60 years to release capital from their home and thus a credit is guaranteed.
Thus, in order to apply for a mortgage pension, one must own a home, and this in an area that is considered to have an upward trend in the value of housing in the long term, which constitutes the security. Unlike mortgages, you do not have to repay and pay interest as long as you stay in the home. It is only on the day you choose to move or when the loan expires that you start your repayment.
In addition to being a pensioner and owning his home, in order to apply for a Mortgage Pension, the value of the home is at least $ 500,000 for tenant-owner rights or $ 900,000 for a villa. If the case is that the home is already burdened with a loan, it must not be greater than the amount taken out as Mortgage Pension is sufficient to settle the loan.
The reason for this is that Mortgage Pension wants to be the only lender with the home as collateral. The older a borrower is, the higher the amount can be granted. This is on a rising scale from 15% of the market value at the age of 60 to 45% of the market value at the age of 86 and up.
Good to know
- Senior loans, or retirement loans, can be used to free up locked capital in housing
- The capital that can be released can be used at one’s discretion, for example for a more active retirement life with travel,
- A senior loan is usually a little more expensive than a corresponding bank loan
Find more alternatives to senior loans
Secured loans for pensioners
Private loans, account credit and quick loans are two types of loans that seniors can take advantage of. An unofficial rule among lenders is usually that one of these loans should be repayable before the age of 75. So you have up to 74 years to take out a loan with a short maturity.
For these unsecured loans, you have exactly the same chance as younger residents to get a loan approved. What you need to do to get one of these loans is to go through a credit report and be able to prove a good repayment ability.
A senior unsecured loan has the same requirements as for other borrowers in terms of payment remarks. However, it may be somewhat more difficult for seniors to obtain a loan without collateral if you have a payment note. This is because you usually already have a lower income.
If you as a senior are interested in taking out a loan without collateral, it is important to have the high effective interest rate in mind. Before taking such a loan it is extra important to make a budget to see that you have the opportunity to repay the loan on time. In addition, you can then also show to the lender that you have carefully planned for your repayment plan.
Take control of their finances as a pensioner
Your personal finances are constantly changing throughout life. When you get older and retire, it is extra important to have a good overview of your finances. It is a good idea to make a budget so that you know what expenses you have in the home and how a reduced income can affect the standard of living.
As a pensioner, you receive a lower income than as a working person and it may initially take a while before you get used to your lifestyle with the new, lower, income. By setting a budget at the beginning of retirement, the adjustment is made easier and you do not have to worry about where your money is going.
In general, women have a lower pension than men, often because of a shorter professional life. Men are often more satisfied with their financial situation and with their life as a pensioner. Earned occupational pension can be a decisive factor in how one’s financial situation grows older. The occupational pension is also higher if you have been in working life longer.
It is important to review which loans and loans you have and have a stable repayment schedule for these in your budget. Also, look through the various agreements that are often associated with the home such as telephony, internet and electricity agreements.
In addition, some new income has also been received in recent years before retirement. Something that is common is that you have welcomed several grandchildren to the family and perhaps you have set up a savings for them.
All this must be taken into account in the budget one has. Saving to grandchildren is a nice gift that can be given space in one’s pension if you only plan for it.