It is not because you are senior that you have no plans. Whether buying your first property or another house, whether you want to take a long trip, or just to cover your health costs, the need for cash does not disappear with age. On the contrary, they are becoming more and more pressing, to the point of forcing the senior to use a loan.
Seniors facing credit
It should be noted that the older a person gets, the more difficult it is for them to get a loan. In fact, generally, from retirement age, health problems are more frequent and sometimes more serious. This forces credit institutions to require a certain number of guarantees before giving their approval. In summary, it is more difficult for people over 70 to get a loan, at least to get a moderate price. Because borrower insurance is too expensive, to compensate for the risk of death or health problems that can affect the person’s ability to repay.
But that does not mean that seniors can no longer get a loan. In fact, more and more banks are nowadays presenting specific offers for this category of the population. Because they have stable and long-term income through their retirement pension. In addition, they often own real estate or various investments, often called “woolen stockings”. Indeed, according to a study, seniors are 70% owners, hold 2/3 of savings and represent 1/3 of the French population.
The types of credit that interest seniors
Seniors are not entirely excluded from the traditional credit circuit. Because according to the same study, they represent 45% of outstanding consumer credit. According to Good Bank statistics, the latter amounted to 4.5 billion USD at the end of November 2015. Therefore, seniors weigh 2.02 billion USD in terms of consumer credit. This means that this section of the population still manages to obtain consumer credit, which has the particularity of being repayable at short notice and which does not require proof of expenditure. Seniors use this funding to go on a trip, acquire a new vehicle, deal with unexpected expenses or to equip themselves with household appliances.
But it is possible that people of retirement age are also thinking about investing in real estate. In the event that they need money to acquire housing, pending the finalization of the sale of the one that belongs to him and in which he resides, the bridge loan for seniors is the best solution for him. This means that the bank will advance you the equivalent of 50% to 80% of your current property, for a period of 1 to 2 years.
During this time, you only have to repay the interest on the loan, the latter itself being settled by the transfer of your old home. You can also turn to your pension fund to apply for a loan to build or buy new housing. This loan can then be used to supplement your personal contribution. However, the amount allocated rarely exceeds $ 15,000.
Other credit solutions for seniors
As the owner of your home, you can apply for a mortgage. In other words, the bank will estimate the value of your property before giving you the corresponding amount. On your death, he will recover the property in question, to reimburse himself. Finally, the bonded mortgage represents another way for seniors to raise funds. It is between the mortgage and the conventional loan, since you get a cash advance that amounts to 70% of the value of your home. Repayment is monthly and you do not have to take out loan insurance.
Online credit for seniors
Regardless of the type of credit, seniors are not yet familiar with online credit. In fact, the proportion of people over 70 who have a phone is only 31%, compared to 54% for those aged 60 to 69. With regard to Internet use, only 53% of those over 70 have access to it, compared to 81% for those aged 60-69.
Finally, only 30% of those over 70 use the Internet to carry out administrative procedures, including taking out credit. To be more precise, 31% of those under 75 connect to their bank portal, compared to 55% for those over 70. It should be noted that the elderly prefer human contact, and in particular agency meetings and the telephone, to carry out the procedures.
It should therefore be stressed that the interest of seniors for online credit is still limited, in particular because of the difficulty they encounter in using digital. But tomorrow’s retirees are therefore more familiar with the Internet and smartphones, which means that their enthusiasm for online credit will increase over the years.
Especially since certain organizations and platforms, like Emmaus Connect, aim to promote their access to digital, initiate neophytes through training workshops and even provide them with equipment at low cost.