When you are a pensioner, you know that it can be difficult sometimes to get approved for the loan you need. When you apply for a traditional loan, you may find that many lenders have strict criteria to meet for those living on pensions. Even though it may be a little more difficult, there are many options for pensioners when it comes to getting the loan funds you desperately need. Below are some tips and advice on finding the right loans for pensioners in Australia.
1. Do You Need The Funds?
Before you apply for any type of loan, it is important to ask yourself if you need the funds. Even small amounts of money can be expensive to borrow, and the money may not always solve your financial issues. Before taking out a loan to pay for bills, talk with your utility providers to see if they can work with you and develop a payment plan that will work better for your financial needs.
2. Loan Options For Pensioners
The loan options that are available to pensioners will depend on what your financial situation looks like and what type of pension you are receiving. Some of the options you can consider include:
Bank Loans– You can speak with your bank to see if they can offer you a personal loan if you have a good history with them. This is typically a good place to start and you may find you get the best rates available. Visit your local branch and talk with a loan specialist about your options.
Low Doc Loans- These types of loans are typically best for those who are self-employed or have money that is tied up in investments. It should be noted, however, that these loan types often come with higher interest rates than other options.
Short Term Loans- If you need money quickly and for a small amount, you may choose a short-term loan. Borrowers typically apply for a couple of hundred dollars to a few thousand dollars. Before your loan is funded, your income and expenses will be verified. The loan terms vary between weeks up to a year. This should be a last resort because they come with high-interest rates and short payback terms.
Another Bank Loan- If you cannot get a loan from your current bank, you may seek out a loan from another bank in your area. Some banks are more open to considering loans from applicants receiving pensions. All banks will have some criteria needing to be met before approval.
Retiree Loans- These are special types of loans that are made just for those receiving retirement incomes such as pensions.
3. Government Assistance Schemes
As a pensioner, you need to be extra careful about where you get your loan funds from. The government has created some support options for retirees living off their pensions. Three types to consider include a pension loan scheme, a no-interest loan scheme and a Centrelink Cash Advance.
The pension loan offers eligible applicants the ability to get some capital they have tied up in their assets for extra income. For those who have low incomes, the no-interest loan scheme can give eligible applicants up to $1,200 to buy health items, pay for car repairs and purchase household items deemed essential. The loan can be repaid in 12 to 18 months.
4. Risks To Watch For With No Credit Check Loans
If you are not careful, it could be easy to fall victim to many lenders who don’t have their customers’ best interests at heart. Before using a lender, check to ensure they have a license and a way to contact them. Pay extra attention to the fees and any fine print on the loan application before you submit it. Remember that each time you apply for a loan, your credit report will take a hit.
5. How Should Pensioners Apply For Loans?
When you require a loan, it is best to contact a lender directly or visit their office location. When you apply, you will have to provide your personal information, contact details, financial income and any other information that pertains to your assets, pension payments, debts and any other credit accounts you have open. Always thoroughly read through the fine print of the loan terms before you apply.
About the Author:
Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.