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Compare loans for retirees

Compare 8 types of loans for seniors for good, fair and bad credit.

While there’s no standard definition of a loan for seniors, or people over the age of 62 who qualify for retirement – people at this stage of life may need a personal loan for emergency expenses, medical bills, special equipment and more.

There are lenders that will consider you for a personal loan even if you’re no longer employed. But be aware of the costs some loans carry and the impact borrowing at a late stage could have on your retirement funds.

8 types of loans for seniors

Even if you no longer have job income, you may still qualify for a number of loans, provided you have Social Security benefits, a pension or a retirement fund.

Here are eight types of loans available to retired people:

  1. Personal loans. Banks, credit unions and online lenders offer personal loans ranging from $1,000 up to $100,000. Personal loans can be secured or unsecured, but most personal loans are not backed by collateral. Instead, you need to show regular income to prove you can pay back the loan.
  2. Personal lines of credit. A line of credit is similar to a personal loan. But instead of receiving a lump sum, you draw from the line whenever you need cash. This can be useful when you have ongoing and unpredictable expenses.
  3. Debt consolidation loans. If you have debt from before you retired and want to combine it into one monthly payment, a debt consolidation loan could be a good option. It lets you pay off your debt faster at a lower interest rate, helping you save money.
  4. Peer-to-peer loans. Peer-to-peer loans are funded by investors rather than banks or institutional lenders. Although they take longer to be funded than normal loans, some can offer people with fixed income a loan they might not otherwise qualify for.
  5. Reverse mortgages. Reverse mortgages offer a line of credit, a regular income stream or a lump sum payment by borrowing against your home’s equity. Instead of making monthly mortgage payments, a reverse mortgage pays you. However, this reduces the equity in your home and comes with risks.
  6. Home equity loans. A home equity loan or line of credit lets you borrow against the equity in your home to access funds that can be used for any purpose. Home equity loans and HELOCs may offer lower rates than personal loans, since they’re backed by collateral and present less risk to the lender. But you could lose your home if you can’t pay it back.
  7. Short-term installment loans. While not the cheapest option when you’re on a fixed income, a loan for people with bad credit can help in a pinch. But with APRs that can reach over 600%, short term loans are best for emergency situations only when no other options are available.
  8. Bridge loans for seniors. Bridge loans are a type of short-term financing designed to cover — or bridge — brief gaps in funding. Elderlife Financial Services is one lender that provides unsecured bridge loans between $5,000 and $500,000 which you pay back over a few months to just over a year.
1 - 5 of 6
Name Product Filter Values APR Minimum credit score Loan amount
Best Egg personal loans
8.99% to 35.99%
600
$2,000 to $50,000
A prime online lending platform with multiple repayment methods.
Upstart personal loans
6.5% to 35.99%
300
$1,000 to $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
Bankrate
Bankrate
4.98% to 35.99%
Poor to excellent credit
$1,500 to $100,000
Achieve personal loans
7.99% to 29.99%
600
$1,000 to $50,000
Consolidate debt and more with these low-interest loans. Cosigners welcome.
Upgrade personal loans
7.96% to 35.97%
620
$1,000 to $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
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Financing options for veterans and people on disability

Whether you are 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 are also be eligible.

If you are on disability (SSI/SSDI), it’s best to start by comparing lending options for people on disability that may be easier to qualify with.

Loans for seniors with bad credit

If you have poor credit – say a score under 580 – there are lenders that may offer loans to seniors with bad credit. For example, Avant, Upgrade and Upstart may consider your application if your score is below 580, but you have to show that you have regular income coming in.

Keep in mind you’ll pay a higher interest rate if your score is less than optimal, and expect to have origination fees tacked on to your loan by most lenders. Origination fees can run anywhere from 1% to 10% of the total loan amount.

Types of retirement income considered by lenders

Lenders consider a range of income sources when you apply. As long as you have a steady source of income — whether it’s through assets, a part-time job, disability or retirement benefits — you may qualify for a loan.

Here are income sources many lenders consider:

  • Investment income. If you have income from investments like rental properties or a retirement savings account, you’re referred to as a self-funded retiree. When applying for a loan, document these sources of income thoroughly.
  • Pension or Social Security income. If you receive pension as a form of income, you may still be able to qualify for a personal loan. Be sure to check the eligibility criteria of the lender as not all will be able to accept pension or Social Security benefits.
  • Employment income. If you have part-time income on top or any investment or retirement funds, this can help bolster your application. Lenders will look at the type of employment and how long you’ve been doing it.

Also, the majority of lenders will require you to be a US citizen or permanent resident to be eligible for a loan, but some lenders will consider nonresident seniors for loans.

Case study: Linda and Grant, a retired married couple

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 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.

What you need to apply for a loan

While every lender is different, be prepared to provide the following information:

  • Personal information. Your name, date of birth, Social Security number and contact details.
  • Income information. All sources of income, including proof of direct deposits, retirement award letters and bank statements.
  • Debts. You’ll also need to provide information about your current debts.

If the eligibility criteria aren’t clear, get in touch with the lender before submitting your application. For example, if your investments have inconsistent income, you might not meet the minimum income criteria.

And to give yourself the best chance of being approved, make sure you have all of your information on hand before applying.

Other sources of financial assistance for seniors

There are multiple federal, state and local programs that offer financial assistance to those between the ages of 60 to 65 and up with low to moderate income. Assistance may be available for food, housing, utilities, health care, in-home care and more.

To find out what you may qualify for, visit the BenefitsCheckUp website from the National Council on Aging. Enter your zip code and the types of benefits you’re interested in to see what programs are available in your area.

Bottom line

Living on a fixed income doesn’t necessarily disqualify you from getting a loan. But your monthly repayments will impact your budget. When choosing a lender, look for the lowest rates and fees possible, and be open to other options – like benefits for seniors – if you need ongoing assistance for living expenses.

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5 Responses

    Default Gravatar
    PhyllisDecember 10, 2018

    I am a senior citizen and I would like to know how I can apply for a short term loan. I have seen ads, I still need to know how to start.

      Default Gravatar
      nikkiangcoDecember 13, 2018

      Hi Phyllis,

      Thanks for getting in touch! To apply for a short term loan, check the eligibility criteria and documents needed by the lender of your choice. But generally, they would need:

      Personal information. Your name, date of birth, Social Security number and contact details are all commonly required for loan applications.
      Financial information. Include all sources of income and provide evidence of them. You’ll also need to provide the details of your debts and liabilities.

      Hope this was helpful. Don’t hesitate to message us back if you have more questions.

      Best,
      Nikki

    Avatarfinder Customer Care
    RenchDecember 23, 2017Staff

    Hi Merriel,

    Thanks for your inquiry. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.

    You can compare pensioner loan options so you can choose the right loan for you.

    Please click the name of your preferred lender to find out the details and the minimum eligibility. You may then click the green “Go to Site” button to submit your loan application online.

    Best regards,
    Rench

    Default Gravatar
    KendallOctober 12, 2017

    I’m retired now & on a fixed income. I have approximately $10,000 in credit card debt which I’d like t pay off. Earlier this year, I was a victim of credit card fraud. Experian investigated & removed the fraud but it’s taken months to restore my credit. I pay rent and all my bills on time. Can I still be considered for a small loan to pay off credit cards? Thank you.

      Avatarfinder Customer Care
      RenchOctober 12, 2017Staff

      Hi Kendall,

      Thanks for reaching out to us. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.

      Yes, you may still apply for a loan. You may explain this further to your preferred lender.

      Please click the name of your preferred lender on the page to find out the details and the minimum eligibility. You may then click the green “Go to Site” button to submit your loan application online.

      Best regards,
      Rench

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