Pensioner personal loans – Get the approval you need
If you’re a pensioner in need of extra cash, you might be wary of the sting of rejection from lenders who prefer borrowers on a payroll. While it’s true that your options are a bit thin, you can still increase your chances of approval by shopping around more. Use this guide on pensioner personal loans to get started, so you can stay on top of any available options.
What are pensioner personal loans?
Put simply, a personal loan for pensioners is credit you qualify for if you receive a pension. There are different pension types in Australia, including age pension, carer’s pension, single parent pension, and disability pension.
As a pensioner, you might find yourself in need of a lump sum top-up so you can achieve some worthwhile goals and dreams. Whether you want to buy a car, book a holiday or pay an emergency bill, a personal loan is flexible enough to cover it all. You can then repay the loan slowly, one instalment, at a time.
What do lenders look at?
As mentioned earlier, finding suitable loan offers on a pension or Centrelink benefits is a bit more complicated. That’s because in most cases, a pension is considered low income. Therefore, lenders are afraid you might not afford to repay the debt. When you apply, lenders generally consider the following:
- Your income. Aussie lenders accept all kinds of income. So if your pension is not adequate, having other income sources such as rentals or a part-time job helps to strengthen your loan application.
- Your credit history. Having excellent credit also boosts your desirability as a borrower since it indicates a history of paying debts on time. A good track record will increase the lender’s confidence in your repayment abilities, so they are more likely to give you that stamp of approval.
- Your assets. For secured loans, you can use your assets or property to guarantee the loan. Keep in mind this means the lender can repossess your car, home or whatever you’ve used as collateral if you fail to repay the loan in full.
Features of personal loans for pensioners
Pensioner personal loans usually come with the following features:
- Borrowing limits. The more regular income you have, the more you can borrow. Generally, loans for pensioners are smaller since lenders only let you borrow what you can afford.
- Loan terms. Repayment periods range from 6 months to 5 years. However, small personal loans for pensioners tend to have short terms.
- Secured vs unsecured. You can offer your asset as security to get a lower rate and a better chance at approval. Unsecured personal loans for pensioners are more popular, but they will have a higher rate and usually require you to have a good credit rating.
- Fixed rate vs variable rate. Your interest rate can fluctuate (variable) or stay the same (fixed) over the life of the loan.
- Fees and charges. Check for fees to ensure your loan is cheap to pay back.
How to apply for a personal loan for pensioners
Browse the table above to see which type of loan has the right features and eligibility criteria. You can apply online by clicking “Go to Site”, but before you start the application process, it’s essential to figure out how much you can afford based on your current living expenses and future costs. Our pensioner personal loan calculator helps you pick out the perfect repayment estimate so you can apply for the right loan for your wallet.
Pensioner personal loans FAQ
Can I get a bad credit loan if I’m a pensioner?
Yes, some lenders consider more than your credit score. So for instance, if you have a higher income and more assets, you may still qualify.
What other loan options do I have as a pensioner?
Credit cards can be great if you find one with a promotional rate and if you intend to pay it off quickly. If you’re a homeowner, you can also borrow against the equity in your home.
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