Financial needs never stop even when you stop earning actively. Some urgent nature expenses can’t be met out by the money spared from the regular income after meeting out monthly living expenses. The pension is a dependable source to live happily after 65 years age when you go out of work. The retirement age for the women is being increased. From 2019 onwards, the State Pension age is going to be 66 years for both men and women. The state pension age will be under review; it means that Govt. can change it again but this is not going to solve the problem of funds shortage often experienced by senior citizens; the only dependable solution that comes up as the popular choice is instalment loan from direct lenders available at ease and the least formalities of documentation.
Complex Financial Challenges for Age-Old People:
The rise in elderly population is placing pressure on public finances. Around 55% of welfare funds are being used for pensioners. Male employment rate at over 50 years age declined sharply from 1970 to 1980 due to a decline of several traditional industries because of a downturn of the 1970s and 1980s’ recession. The economic restructuring up to today affected the men more disproportionately. Early retirement package and private pension facility encouraged the matured people to leave the job. The retired people have lower income than while on work. According to a recent report made public by Age, the financial services providers need to rethink
how they can help old people to manage the finances and challenges. Old age people often report significant challenges to managing the funds for unexpected events like illness, relationship breakdown, and bereavement. The multiple uncertainties keep the senior citizens financially worried all the time.
Direct Lenders Offer Feasible Finance Solutions For Senior Citizens:
The personal loans are available even for more than 66 years old. Some direct lenders recognise the retired people the good candidates for lending because of their steady income. Most of the retired people have assets like equity in a family home or property more impressive than monthly incomes. Lenders have the option to consider their asset as the security against the credited money. For the lenders, the major difficulty is that the senior citizens tend to pose a risk of non- repayment because of limited income or illness. Therefore, lenders offer short-term loans at a higher rate to older borrowers. The variety of loans is available for the retired or old age people but they need to choose the best one.
Six Best Loans for Senior Citizens:
- A fixed-rate unsecured personal loan is the most sought-after financial help by senior citizens. It is given for fixed term at fixed monthly instalment. The borrower can pay it back any time. Some direct lenders charge for early payment while some don’t do. Paying the loan back by selling the shares at a good rate is a good practice to make the loan cheaper.
- A credit card can also be used to meet out the requirement of personal loan. You can consider a credit card to make a big purchase. The companies give you zero interest rate period to repay the amount; this period may be of few months or even a year. However, you pay the initial fee around 3 – 5% but it is cheaper than the direct loan provided it is paid on time. The justification of this option depends upon loan size, 0% interest rate period and on the time repayment.
- A mortgaged loan is a low-cost option for the people having a lot of equities to be mortgaged proportionally. A mortgage loan is available even for the people between 70 -85 years ago. As the credited amount is secured by the mortgaged asset, therefore, this borrowing facility is available at a low rate. However, it involves little bit documentation also that may need to hire the experienced professional but the low-interest rate compensates the cost. It is a good option for long-term big amount borrowing.
- Equity release mortgaged loan is another good choice for the people requiring a big amount for a longer period but desiring to pay less each month. It allows to rolling up the interest amount; it is payable on death. This low cost and low repaying borrowing facility allow the senior citizens to enjoy the borrowed money without paying back the interest during a lifetime. It is suitable for low-income senior citizens but it affects the spouse & children’s inheritance. The interest rate tends to be higher than to standard mortgaged loan.
- Second charge mortgage loans are available against the home. It is a great facility for the people who already have a mortgage loan. The part of an asset can be mortgaged according to a borrowed amount. This financing facility is available at the higher interest rate that is often variable and the mortgaged property remains at high risk. It is good for the mid- amount short-term loan; the ideal repayment period is 12 months.
- Credit unions are the local organisations run by the community members. It should be the most preferred choice because the lending for the members is available at the lowest cost. The tailor-made proposals make the repayment easier. No guarantor unsecured small amount loans are made available easily.
What to Keep In Mind While Borrowing At Old Age:
Health plays a very crucial role in on the time repayment; health issues are the most disturbing element. While borrowing for long-term, consider your health. While considering an installment mortgage loan, consider the future value of an asset. Always mortgage the property equivalent to borrowed money. If you are opting for equity release mortgaged borrowing, essentially discuss with the spouse or children because you put their interests on a stake. Credit card loan is a good option but it is good only if you have sufficient income surety to pay the due amount at the time; otherwise, it costs too much. Instead of borrowing over the credit card, you can purchase the capital item financed directly by the manufacturer or seller. If are sure to repay the borrowed amount within a few months, you should opt for a fixed rate unsecured loan.