Editor's choice: Upgrade personal loans
- Flexible loan options
- No prepayment penalty
- Loans up to $50,000
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If you rely on a pension, whether it’s an employer retirement benefit or Social Security, you may find your loan options somewhat limited. That’s because many lenders require you to have a steady job to be eligible.
You do have some options, however. We take you through what those are and show you how to compare these options so you can choose the right loan for you.
Pensions in the US are offered by some employers and also by the government to senior citizens and those with disabilities.
There are lenders who consider disability benefits a form of income along with employer and Social Security retirement payments when evaluating your ability to repay the loan.
The table above can be a good starting point to find a loan for people who rely on a pension as their main source of income. You can click on the name of the lender to read a review, and you can click “Go to Site” to submit your application. If you have questions regarding your eligibility, you can contact the lender directly.
Personal loan applications are counted as inquiries on your credit report. Inquiries play a factor in your overall credit score. Lenders may also view too many inquiries as a red flag. To keep your credit in good standing and improve your chances of approval, you may want to consider limiting your number of loan applications.
To apply, you’ll need to provide personal information including your name and contact details, as well as financial information regarding your pension payments, assets, debts and open credit accounts.
Yes, but they’re one of the more expensive options out there. These loans are typically called pension advances, pension sales, pension loans or pension buyouts. Here, you sign over your monthly pension payments in exchange for a loan — often between five and 10 years.
They’re similar to payday loans in that they’re one of the most expensive financing options out there, with APRs easily topping 100%. Some lenders also require borrowers to purchase a life insurance policy naming it as the beneficiary — an extra expense.
The Consumer Financial Protection Bureau (CFPB) warns against borrowing from a pension advance company that claims it’s endorsed by the VA: It’s illegal for lenders to take military pensions and veteran benefits. Former servicemembers are ineligible for a pension advance unless they receive a pension from elsewhere. Either way, it’s an expensive option meant for absolutely emergencies.
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