How to Find the Best Personal Loans for Pensioners
Where are they and how do they work?
There’s no getting around it – life in Australia continues to get more and more expensive, which leaves many searching for the best personal loans for pensioners. One group grapples with price hikes more than any other; our aging pensioners. That’s why it’s important for you to know what the best personal loans for pensioners look like and how you can pay them back.
In 2022, the Australian Bureau of Statistics (ABS) reported the highest inflation rates since 2006. That means expensive petrol prices, a four percent hike in food costs, and a massive increase in everyday prices. Unfortunately, all that inflation hit Australia’s oldest citizens the hardest.
Most people over the age of 66 live off of government benefits, but that doesn’t preclude them from renting property, starting a new venture, or applying for a loan.
Can pensioners qualify for personal loans? The short answer is yes, but it’s important to look for the best personal loans for pensioners.
Loans are a different process for pensioners, but they can be acquired if you have the right credit score and information. If you want to add to your monthly income, scroll down for more information on the best personal loans for pensioners like you.
What personal loans are available to pensioners?
Pensioners can get loans through a government scheme like the Home Equity Access Scheme, (HEAS). According to the guidelines of the HEAS, it works like a reverse mortgage from the federal government.
Citizens 66 and up can receive a payment once every two weeks, tax free, if they take out a loan against their home. As of 1 July 2022, they can also borrow a single, large sum.
This may be the best option if your home requires updates or maintenance. An HEAS loan can help cover those expenses and work with your budget.
Personal loans are available from independent lenders, but your pension status can work against you. You need a good credit score and to show that you have assets to back up your loan.
For instance, if you let a property that earns you a monthly check, have money saved in the bank, and can demonstrate a good history with moans, you may qualify. But, keep in mind that pensioners are often held to a different standard than other lenders and face much higher interest rates as a result.
Are there risks to taking out a loan as a pensioner?
A person receiving a government pension can borrow anywhere between 200 and 10,000 AUD. However, the type of loan and your payment scheme needs to work in your favour, not the lenders, to keep you safe.
Never, ever take out a loan against your pension. The interest rates in this structure are the hightest on the market and leave you in the red.
Also be wary of unsecured loans. These loans let you take out a larger amount, but they also cost you in payments and fees.
The fastest way to find the best personal loan for pensioners like you is to work with a loan officer and compare your options along with rates and payment plans. You can always call up a firm and talk through available loans before going in person to sign any paperwork.
The best personal loans for pensioners depend on your income, how much your family can help, and how much money you have available to make payments. Be sure to go through all of your options and run a credit check on yourself before taking out any money.
How to get the best personal loans for pensioners – tips
Take a moment to accurately calculate your actual living expenses. It may help to keep track of everything you buy and any services for a month to help you know exactly what you need to take care of yourself.
The best personal loans for pensioners include solid payment structures, so avoid estimating costs. You’ll be better off with hard numbers so you can feel confident about your monthly payment budget.
When a loan officer presents you with a loan option, read through the terms and conditions carefully. Have a second person look them over to make sure you don’t miss anything and that you understand any fees or grounds for legal action.
Also check for a maximum age limit on any loans. If you apply for a loan that you’ve aged out of, the rejection can hurt your credit score and keep you from borrowing anywhere else.
Consider a short-term loan over a long one. A shorter span of time may result in higher interest payments, but you will spend less time deep in debt. If you only need money for a short time, see if a credit card might be a better option for you.
LendEasy can help
It’s not easy finding the best personal loan for pensioners. Call us today and tell us what you need so we can assist you.
LendEasy offers a number of different loans and works with your budget so you always get the best payment structure for you. Contact us today.
