Loans to pensioners, what are your options?
Overview
Finding lenders that offer loans to pensioners can be tricky. When it’s time to retire, many people aim to have a considerable amount of savings put away to see them through their retirement years. Life can be unpredictable at times though and it’s not uncommon for individuals looking for lenders that specialise in providing loans to pensioners when financial emergencies come up.
The unfortunate reality is that it can be challenging to get loan approval if you aren’t an active worker of if you’re a pensioner.
In South Africa, retirement age is usually 65. At this age, many individuals are excluded from the ability to gain access to loans, largely because they are considered too risky.
What are your options in South Africa?
Absa and Standard Bank don’t have an age limit for their loan applications. These banks will instead look at the risk profile of the loan applicant.
Capitec Bank, on the other hand, has options available to people who are receiving a monthly pension.
It’s important to note however, that banks are not the only financial institutions that grant loans. Affordability is essential.
According to Paul Rosenbrook, director of the South African Association of Retired Persons:
“In reality, few banks will be eager to lend to older people. And few pensioners will be able to pay back longer-term loans without difficulty.”
EC Finance offers loans to pensioners in the form of finance from R1000 to R120 000.
Documents usually required include:
- Valid South African ID
- Pension Slip
- Copy of your pension cards
- One months’ bank statement
It’s important to consult a financial advisor before you apply for any loans available to pensioners. You need to be realistic about your financial standing and sure that you will be able to repay the loan.
