Editor's choice: Upgrade personal loans
- Flexible loan options
- No prepayment penalty
- Loans up to $50,000
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As you move into your older years, your finances change with your lifestyle. When that happens, you may find that getting a loan isn’t as easy as it was when you were earning an income from employment. However, there are lenders that will consider you for a personal loan as a retiree. But just be aware of the costs some loans might have and the impact borrowing at a late stage could have on your retirement funds.
Retirement isn’t the end of your borrowing experience. Even when you no longer have income from a job, you may still qualify for a number of loans, provided you have Social Security benefits, a pension or a retirement fund. These are some of the more common loans available to retired people, but if you have something specific in mind, don’t hesitate to contact a lender to discuss eligibility criteria.
Whether your retired from the military or simply served the country, you may have loan options you aren’t aware of. Some lenders, like Navy Federal Credit Union and USAA, cater to veterans. Other lenders may have special deals or lower interest rates if you provide proof of your service. You could benefit from a personal loan for veterans, and in many cases, spouses will also be eligible. Your best option will be to contact your local VA or visit the Department of Veterans’ Affairs to see what kind of options you have.
Lenders consider a large number of retirement situations when you apply. As long as you have a steady source of income — whether it’s through assets, a part-time job or retirement benefits — you may qualify for a loan.
Imagine this scenario: As a couple, Linda and Grant receive $1,270 in retirement benefits twice a month. They’ve paid off their house and have a small source of additional income from a rented-out investment property. While their payments are enough to support their lifestyle, they don’t have the means to make additional larger purchases. When their car stopped working, they considered a personal loan to buy a replacement.
Option 1: They looked into an auto loan to purchase a vehicle. Since an auto loan is a secured loan, they found they could get reasonable interest rates.
Option 2: Linda and Grant also looked into an unsecured loan option so that their car couldn’t be taken away in the event they fell behind on payments. They looked into peer-to-peer loans, which can also come with affordable interest rates.
Ultimately, Linda and Grant decided on a peer-to-peer loan because they felt more comfortable borrowing money without collateral attached.
To make the application process easier, especially if its through an online lender, you should gather your documentation before starting the application. You’ll need to provide your lender with your
If the eligibility criteria aren’t clear, get in touch with the lender before submitting your application. For example, you may have income from investments that isn’t consistent, which means you might not always meet the minimum income criteria. While a lender can’t guarantee approval, it can clarify certain points and provide you with additional information that will help you complete your application. And to give yourself the best chance of being approved, make sure you have all of your information on hand before applying.
Retirement is a long period of life that you have to look forward to. But when you need a loan — no matter the reason — it can be frustrating to find one that can work with you, especially if you’re on a fixed income. Keep your options open and compare your choices as you navigate your later years.
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