Loan for pensioners: Requirements for lending

Although most retirees have a secure income, it is not easy for them to find a suitable loan. The reason for this lies solely in old age and the associated mortality risk. A lack of security, however, only plays a subordinate role for pensioners. Often, 60- or 65-year-olds have problems getting normal installment or consumer loans.

From the age of 75, the situation is almost hopeless. However, there are certain alternatives that also allow pensioners to find a suitable loan and thus fulfill their personal wishes. In this context, it may also be necessary to provide a surety and / or take out residual credit insurance.

Requirements for lending

Requirements for lending

Anyone wishing to take out a loan in Germany must be of legal age, have a fixed income and a permanent place of residence and must not have any negative Credit Bureau entries. Similar requirements apply to a foreign loan. Here, however, the Credit Bureau information does not matter at all. Whether or not there is a certain maximum age for bank loans differs from case to case. It also depends on whether pensioners can get a loan or not.

Most retirees even have more collateral than a normal worker. This is essentially due to the fact that your pension is not only paid regularly, but cannot be lost under any circumstances. An employee could become unemployed at any time and lose his salary believed to be safe. Many retirees are even seriously interested in further increasing their income and therefore pursue one or more part-time jobs. This also speaks for them.

On the other hand, it must be pointed out that the risk of becoming seriously ill or even dying during the term of an installment loan increases significantly with age. If the term of the loan is very short and only one to two years, the banks may be willing to accommodate the pensioner accordingly and to approve his loan application. If this is not the case, a guarantor, who should ideally come from his own family, could step in accordingly, with the consequence that an originally rejected loan application can still be approved by a pensioner.

Anyone who has additional security as a pensioner, such as a debt-free property, a securities account, larger cash assets or other valuables, also has a very good chance of getting an installment loan.

With an overdraft facility, there should generally be no problems. As long as the monthly pension is regularly paid into the account, the overdraft facility can be drawn on at any time and repaid step by step.

The residual credit insurance

The residual credit insurance

In principle, residual credit insurance is always taken out voluntarily. The bank must never make its existence a condition for granting a loan application. This applies not only to employees, but also to pensioners.

The costs for the residual credit insurance are never calculated separately, but are always included in the annual percentage rate and the monthly loan installments. It is essentially divided into three areas and covers the risk of unemployment, accidents and death. With a pensioner, the residual credit insurance can be limited to the latter two areas.

If the insured event occurs, the residual credit insurance pays out the monthly loan installments or the outstanding balance of the loan. The monthly loan installments are taken over in the event of unemployment that is not your own fault, a long illness or an accident, and the remaining loan amount is paid in the event of death.

Taking out residual credit insurance has a number of advantages. If the pensioner dies, his surviving dependents do not have to pay for the loan. A residual credit insurance is a life insurance with a falling sum. The further the loan repayment has progressed, the less money the insurance company has to provide in an emergency to compensate for the remaining loan amount.

alternatives

alternatives

Foreign banks are rarely given a loan to pensioners. They have not only set a certain minimum age, but also a maximum age for their loans. This maximum age is often 55 or 58 years.

If you turn to a private credit broker, you may have a much better chance of getting a loan for pensioners. Many private credit intermediaries specialize in retirees or other target groups, where it may also be very difficult to find a suitable loan.

However, there should never be any prepayment for a loan for pensioners. If the credit intermediary already insists on payments in advance, this may be a sign that this is dubious.

Numerous private credit brokerage exchanges have emerged on the Internet in recent years. However, they do not act as lenders themselves, but only try to bring private lenders and private borrowers together. If a private lender trusts that the retiree is reliable and repays his money properly, there is usually a good chance that the loan will be successfully brokered.

Many pensioners who urgently need money turn to a person they trust from their own circle of friends or relatives and ask for help. However, this presupposes that the persons concerned have enough money and sufficient creditworthiness to be able to step in accordingly. This will not always be the case, especially in times of high unemployment and insecure employment.

Small loan without Credit Bureau for pensioners

With the generation of pensioners, the old-age pension is not always sufficient to pay unexpected bills or to pay for necessary purchases. In many cases, a small loan would cover the money needed.

But even with a small loan, pensioners are not welcome customers at banks. You can prove a regular income, but banks complain about the increased risk of death, which exists from the age of 65 and do not grant a loan. Nevertheless, there are ways to get a small loan without Credit Bureau for retirees.

A small loan without Credit Bureau for pensioners

A small loan without Credit Bureau for pensioners

If a small loan without Credit Bureau is sought for pensioners, the chances of a loan increase compared to a higher loan amount. Especially when the term is short and the loan amount adjusts to the income. This approach presents a lower risk for a bank. In addition, a pensioner can rely on other loan protection measures. For example, by naming a guarantor, he could greatly increase the credit opportunities, and a favorable effective interest rate can also be negotiated.

A pensioner can also go to his house bank for a small loan. Years of contact and knowing the financial situation, which can be good despite a negative Credit Bureau, can result in a loan approval. Other safeguards such as a guarantor or a life insurance policy that has a correspondingly high surrender value are also good conditions for lending.

The online application for a small loan

The online application for a small loan

If the pensioner is unsuccessful at his house bank, he can apply for a small loan online without Credit Bureau for pensioners. Most seniors are fit online now, so applying for a loan shouldn’t be a problem. The Credit Bureau-free loans are mostly offered through credit agencies. The funds come from abroad, preferably from Switzerland.

These banks also have an age limit on a loan that varies from bank to bank. A credit intermediary can draw the applicant’s attention to this. But since this form of credit is limited in its loan amount, the probability of a commitment is high. The loan amounts amount to 3,500 USD or 5,000 USD, depending on how high the pension is.

The regular incoming income is given with these loans, only the amount of the pension needs to be taken into account. It should also be above the garnishment exemption limit, since a small loan without Credit Bureau for pensioners is provided with a declaration of assignment of the pension. If payment is lost, the attachable part of the pension must be assigned. For this reason, these loans should be paid correctly.

Find a loan for debt rescheduling – save debt and save interest?

If you want to take out a loan for the debt restructuring, you have several options. It could not only replace an installment or overdraft facility, but also combine several loans into a single loan. Before starting debt restructuring, there are a few important things to consider. What matters most is the amount of the debit interest and the prepayment penalty, which may have to be paid to the old lender. Debt restructuring is only worthwhile if the interest savings from the new loan are higher than the prepayment penalty. Otherwise it might be better to continue to pay off the previous loan and, if necessary, to make use of the right to make additional special repayments. Of course, this presupposes that the bank or the private lender agrees to a special repayment.

Debt rescheduling

Debt rescheduling

Many employees, civil servants or pensioners have a overdraft facility in their checking account. If they meet the requirements, the self-employed and freelancers can also receive an overdraft facility on their business account. However, it is called current account credit. The amount of the overdraft facility or current account credit depends on the amount of the monthly income. If they fluctuate, the average amount is used to calculate the personal overdraft limit. If the account holder has negative Credit Bureau entries, the bank cannot grant him overdraft facilities in most cases. An exception would only exist if the existing Credit Bureau entries are only marginal and the cause for this can be quickly eliminated.

The overdraft facility has a number of advantages. It can be used at any time through cash payments or use of ATMs and can be paid back to the bank just as flexibly. The account holder does not have to commit to paying a certain minimum amount each month. Nevertheless, it can make sense to redeem an overdraft facility and take out a loan for the debt rescheduling in this connection. In certain circumstances, this approach is even recommended by the house bank. This could especially be the case if the overdraft facility is constantly pushed to the limit and there is no realistic possibility of repaying it in the short, medium or long term.

A loan for debt restructuring is an installment loan with a fixed term and a uniform monthly rate. In this way, the account balance is gradually brought back to zero or positive. However, the customer often has to reckon with the fact that the overdraft facility is no longer available until the debt has been repaid in full for the debt rescheduling.

Debt installment loan

Debt installment loan

The interest on an installment loan fluctuates considerably in some cases. For this reason, it is worthwhile to carry out a comparison not only before a planned borrowing, but also at a later date. Ideally, a credit calculator on the Internet should be used for this. Otherwise, the customer can hardly understand how high the current interest rates are and whether an installment loan is a cheap offer.

Anyone who concludes that their old installment loan is too expensive should seriously consider rescheduling. This approach is particularly worthwhile in times of low interest rates. Once a suitable loan has been found that is optimally tailored to personal needs, the application process can be carried out very quickly.

Similar to any other loan, the creditworthiness is also checked here. If it is a German lender, he will obtain Credit Bureau information and check the customer’s income. With a foreign loan, it is sufficient if the income is paid regularly and is sufficiently high. In this case, Credit Bureau information is not required. As soon as the loan application is approved, the money is paid out very quickly. The loan can now be used for the intended purpose, which in the specific case means that the old loan will be replaced and the monthly repayment installments will have to be paid to the new lender in the future. In this context, it may be worthwhile to increase the total loan amount in order to gain additional financial scope. If the monthly installments are to be reduced, the first thing to consider is savings in interest rates. Under certain circumstances, however, it would also be possible to extend the term.

Combine multiple loans

Combine multiple loans

Anyone who has an overdraft facility and / or a credit card and has also taken out an installment loan can easily lose track of their financial obligations. In this situation, it would not only be highly recommended to reschedule one or more loans, but also to think about a summary of all liabilities.

The most important prerequisite for being able to take out a loan for debt restructuring is general creditworthiness. If all existing loans are serviced regularly and the monthly installments are paid regularly, there should be no major problems. It only becomes difficult if the borrower has failed to meet its obligations in the past and the Credit Bureau information shows serious negative entries such as canceled loans, an affidavit or ongoing personal bankruptcy.

Here, the defaulting debtor often has no other option than to look for suitable alternatives. If he has completely lost track of his financial obligations and the expenditure regularly exceeds the income, then there is overindebtedness. In this case, it would be imperative to negotiate with the private or public law creditors and to look for a solution together. A visit to a state-recognized debt counseling center and the use of expert advice can be a valuable help here.

Can banks grant loans to everyone?

Many people interested in credit do not meet the requirements for lending. The default risk of the credit institutions increases with the legally required garnishment exemption limit or the credit check of the potential borrower already fails due to negative Credit Bureau information. However, the possibilities of borrowing are not limited to the national banking system; in particular, it is private or cross-border lending, which is often a viable alternative even in difficult financial situations. The possibilities for taking out a loan are diverse and available on an international as well as private level, so that basically everyone can receive at least a small loan. Professional and experienced private credit institutions have longstanding business relationships with international banks and investors.

Groups of people at risk or not creditworthy

Groups of people at risk or not creditworthy

The self-employed, low-wage earners, unemployed or people with negative Credit Bureau information are among the groups that are usually denied credit. If the income is just above the garnishment exemption limit, the credit institutions can hardly compensate for a loan default with an income garnishment. Business start-ups, small businesses or the self-employed usually fail due to the lack of collateral and insufficient assets in the credit check of the credit institutions. Temporarily unemployed people or people without an income are generally not creditworthy, even if there is a short-term prospect of starting work. A large number of loan offers are available to get you started in the online business or to transport interviews, which can also help with a lack of income or a fundamentally poor financial situation.

The debt trap snaps shut

 

The problem of non-creditworthy groups of people arises from the ever-narrowing financial freedom, which overpriced loans, such as overdrafts or overdrafts, quickly lead to large sums that are no longer manageable. In order to escape the debt trap, private credit providers provide loans for efficient debt rescheduling, with which borrowers can also be offered tailor-made solutions. The financial bottleneck can be bridged with an optimized term and repayment rate adapted to the budget.

Loans in the German banking system

Loans in the German banking system

Regular lending is aimed at regular recipients of income. Pensions, wages and salaries, but also the Credit Bureau request are used by the credit institutions for the credit check. With a positive credit rating, a loan can often be granted. The most common forms of credit include:
– the current account credit
– the installment loan
– the mortgage loan
– the guarantee loan.

The current account credit

The bank overdraft facility is also usually referred to as overdraft facility automatically when a current account is opened by the bank. The bank can, however, withdraw the overdraft limit at any time and without further notice. The current account credit usually has particularly high interest rates, which make it difficult or even impossible for the account holders to repay them. The way out of the overdraft credit trap is usually a debt rescheduling of the overdraft, which is converted into an installment loan.

The installment loan

The installment loan

The loan amount of the installment loan is repaid in agreed repayment installments over the loan term in mostly monthly installments. The installment loan is not tied to a purpose. The granting, payment, but also increasing of the installment loan are usually simple and easy. The installment loan is particularly suitable for repayment of overdrafts because the repayment rate can be agreed in accordance with the monthly budget if interest rates are relatively low.

The mortgage loan

A mortgage loan can be issued at particularly favorable loan terms against the transfer of real estate collateral to the lender. As a rule, repayment is made in the same way as for installment loans – in monthly installments. In contrast to other types of credit, the mortgage loan is associated with relatively high additional costs, which are incurred for notarization, agreements as well as the registration and later settlement of the mortgage in the land register.

guaranteed credit

guaranteed credit

Even people who have little or no income or who have a negative Credit Bureau can possibly get a guarantee loan. In the event of a positive credit check, the guarantor must be able to service the loan on its own and in full. He also undertakes to be liable for the repayment of the loan with all of his assets, even if the borrower now has his own income. If the loan is no longer serviced even if the borrower is in sufficient financial position, the guarantor is fully liable without the borrower having to be held accountable or obliged to repay the loan.

Loans outside the banking system

Credit intermediaries and foreign banks also grant loans to groups of people who have little income or whose credit history contains negative Credit Bureau entries. The loan can usually be applied for and taken out online. In many cases, private and specialized credit agencies take care of the processing until the loan is concluded between the parties involved. In addition, the issuing and repayment modalities are handled by the private credit agency. Loan application and lending are easy and convenient. Filling out online forms from the respective providers and the transparent comparison of the conditions enable an objective comparison to be made quickly. Neither private loans without Credit Bureau nor loans from foreign banks that do not cooperate with Credit Bureau create an entry with Credit Bureau. The main products in lending include private loans and foreign loans.

Private loans

Private loans

Private individuals act as lenders to invest in other alternatives in addition to traditional forms of investment such as securities or gold. The loan is brokered through companies to protect the identity and privacy of borrowers and lenders. Favorable conditions and simple processing characterize the private loans.

Foreign loans

In addition to foreign personal loans, well-known banks of other nationalities are usually involved in the area of ​​cross-border lending. With less restrictive legal restrictions, these banks can also provide loans to the unemployed, low-wage earners and the self-employed on good terms.

Components of loan agreements

The mostly extensive contract for credit includes numerous provisions, such as the general terms and conditions of the lender, as well as the agreed loan terms and the repayment terms of the loan contract. But the loan agreement should also provide clarity on special events, such as the payment of special repayments or the arrears of monthly installments. The agreements in the loan agreement include:
– the desired loan amount
– the desired monthly rate
– the loan term in months
– the APR
– any special repayments
– Default interest on arrears.

The loan agreement in detail

The loan agreement in detail

The desired loan amount must make the borrower’s financial emergency much easier. The loan is repaid in monthly installments, which the borrower can pay in the long term. Over the term of the loan, the monthly installments deduct the amount of the loan or the accrued interest. In order to determine a loan offer that is as favorable as possible, in addition to the interest conditions, the monthly charges and the convenient and permanently settable installment amount must also be taken into account.

The fees also include the institute’s estimated costs for the special repayments. If early loan repayments are made, this may be subject to additional fees. Interest also accrues in the event of late payment. The default interest must be clearly quantified in the percentage amount in the loan contract. The key factor in the loan terms is determined by the annual percentage rate. The annual percentage rate is composed of the nominal interest rate for the loan plus any regular costs incurred to process the loan. This makes the offers of the credit providers comparable for those interested in credit.

Professional execution of the contract

If a loan contract is concluded with a private loan provider, processing via the Internet is usually provided. The credit inquiries can be filled in directly on the providers’ website, whereby a loan approval is often made within a few working days. In many cases, documents and documents still have to be exchanged by post in order to also provide the contract with original signatures. The speedy handling of communication and customer inquiries as well as a friendly and competent customer service are part of the customer support, especially for private loan providers, in order to improve the transparency and convenience of loan processing for the customer. The online loan service is particularly fast and discreet in the processing of private loan contracts. Even after the conclusion, account management is available on the Internet as well as advice on questions relating to the contract.

Loans changed for self-employed

 

For all self-employed persons, holders of VAT number, it is possible to obtain loans or loans with bills of exchange for subjects that carry out business entrepreneurial activities (including professional ones), assuming the so-called business risk.

To finance its business activity, each independent entity can apply for a loan with a repayment of the loan by paying bills. Bills of exchange can be used to guarantee the repayment of the loan or in conjunction with other income, in order to satisfy the necessary guarantees for the provision of loans for self-employed persons.

Loans with bills for self-employed bad payers

Loans with bills for self-employed bad payers

Loans with bills of exchange for autonomous bad payers are non-finalized loans granted to subjects who carry out an independent business and professional activity, holders of a VAT number, who are not required to declare the reason for which they request the loan. Self-employed workers reported by databases such as Crif can apply for the loan with bills online by filling in the request for an online quote or by going directly to a credit brokerage agency or a bank counter.

For bad payers and self-employed workers, it is possible to submit the request for small loans thanks to the release of bills of exchange: this is a form of financing that is essentially based on the issue of debt securities, such as bills to guarantee the extinction the loan and the payment of the loan installments. Although the majority of banks and financial companies have abandoned this type of loan, in the commercial and operational practice there are several small financial agencies that, in addition to offering loans changed for any person hired with a subordinate employment contract, are able to finance the self-employed workers reported as bad payers, offering them customized financing solutions even in the presence of financial problems.

The disbursable sum is strictly related to the degree of reliability of the independent applicant for the extinction of the loan by paying the guarantee. The loan installments for self-employed bad payers are of a constant amount since the interest rate applied is fixed, which is much more expensive than those applied in traditional loans.

The estimates relating to loans exchanged with bad payers are free of charge and only after accepting the economic and contractual conditions of the loan, the self-employed worker will proceed with the stipulation of the loan contract with the simultaneous signing of the bills of exchange. In this case, being a self-employed worker without a paycheck, many credit institutions will require the signing of as many bills as there are installments to repay the debt contracted. The bill of exchange takes on a double “role”: as a payment instrument and as a form of guarantee to protect the creditor from any defaults.

Loan solutions for protested self-employed workers

Loan solutions for protested self-employed workers

For those who have suffered a previous protest for the non-payment of installments of loans or checks and are registered with the risk centers such as CRIF, a particular form of loan can be provided that of loans exchanged for protested subjects.

As with traditional protested loans, loans changed for self-employed individuals who have suffered financial difficulties or protests are ideal for obtaining a loan of minimum financial capital while possessing and presenting some additional guarantees in order to pay off the debt in a way. on time. To obtain a personalized quote, even if you are self-employed without a paycheck, you still need to provide personally the personal documentation, an income statement and alternative guarantees such as ownership of a real estate property.

Loans for self-employed individuals with guarantees

Loans for self-employed individuals with guarantees

Since this is a special loan addressed to those who are reported as bad payers or have suffered a protest or financial inconvenience, the loan disbursed with subscription of bills of exchange is more easily granted by credit institutions to self-employed workers with the presentation of a guarantor or a guarantee. real or mortgage.

Personal loan up to € 60,000. Ideal for employees and retirees also for BAD PAYERS. Quote in ONLY 5 minutes! + REQUEST A FREE QUOTE without obligation >>

Since it is very difficult for self-employed workers to obtain a loan with the assignment of a fifth of their salary or pension, they can validly opt for loans exchanged with guarantor. The guarantor or guarantor is a third party, unrelated to the relationship between the first obliged and the creditor entity, who will commit their income guarantees in favor of the debtor and will honor the debt in the event that the applicant proves insolvent. In order to receive a loan with bills of exchange, the self-employed worker must present a guarantor who is not, in turn, protested and registered in the Crif register.

As an alternative to the figure of the mallevadore, the self-employed worker who has to take out a loan with bills of exchange and with guarantees, should be the owner of a property or a registered movable property: in these cases the exchange debt could be guaranteed with the activation of a mortgage guarantee or collateral such as a pledge. As established by civil law, the pledge is a guarantee right on movable things, on credits or on rights concerning movable property (article 2784 of the Civil Code) which is established by signing a pledge contract. The pledge contract that “engages” and perfects the financing with bills of exchange, is a real contract that requires the ” traditio ” or the physical and physical delivery of the thing or document that confers its availability (in this regard the first paragraph of article 2786 of the Italian civil code).

And when the bills are without guarantee?

And when the bills are without guarantee?

For self-employed workers who want to finance their business, taking out a loan with bills of exchange, without presenting further guarantees, is an increasingly demanded product in the current macroeconomic context. In fact, given the instability of the scenario and the precariousness of employment conditions, loans without paychecks and without guarantors are increasingly dynamic products and subject to the evolution of the context. These loans allow you to access the credit market quickly, securely and reliably : you can apply for them at financial branches, credit institutions and small financial intermediaries specialized in this type of credit offer.

Loans with exchanges are possible in the category of unsecured loans which allow to repay the debt contracted with the payment of bills, taking into account a certain expiration date established and signed by the parties. With this operation, the bill of exchange comes to represent the title of credit granted as collateral in order to protect the repayment and timely fulfillment of the loan. In some cases, the loan promoted to subjects without a paycheck is granted with the issue of a single promissory note to guarantee and extinguish the obligation, thereby protecting the creditor.

In fact, if duly filled in and stamped, the bill of exchange is a title of credit that protects the creditor’s right, in the event that a breach of the obligation occurs. Being a credit certificate or, better, a written form of payment, the bill of exchange allows the beneficiary to collect a debt (in case of non-payment) by direct action, without presenting an injunction and waiting for the bureaucratic “delays” and judicial. Therefore, the creditor has the right against the defaulting party to collect:

  • the unpaid sum resulting from the exchange effect;
  • default and legal interest at the Best Bank rate from the date of presentation;
  • protest charges and all secondary charges and fees.

Solutions with bills in 24 hours: is it really possible?

Solutions with bills in 24 hours: is it really possible?

In order to obtain immediate liquidity to meet all urgent expenses, a self-employed worker can apply for fast-changed loans, even online. In a very short time, we speak of less than 48 hours and, in some cases, even of only 24 hours, it is possible to receive a personalized loan based on financial needs and requirements.

The timing of disbursement of fast bills of exchange depends very much on the amount that is requested by the self-employed worker and on the time frame of the evaluation of the preliminary investigation with which the bank or financial company handles the paperwork. However, since the loans are exchanged, the pre-evaluation phase does not require such long timescales and it is estimated that in less than 48 hours from the date of acceptance of the loan, the check or transfer can be received with the required financial capital. By relying on online loans, the practices are usually much faster (speed is one of the peculiarities of the loans requested on the internet).

Can they be requested on the internet?

Can they be requested on the internet?

Speed is an absolutely peculiar feature of online loans and credit consumers are increasingly inclined to forward their own documentation by filling in the financial form available on the electronic market. Even for self-employed people who are preparing to apply for a loan with bills of exchange, they can benefit from this very valid alternative by attaching to the request for the loan also the documentation concerning their personal and income situation, with the faculty of the creditor companies to request a further form of guarantee or the stipulation of a guarantee policy.

By inserting a few simple personal data into the online questionnaire, the application is directly forwarded to the financial companies which, in turn, contact the potential customer for the assessment of the financeability and the communication of the outcome of the application. If so, the loan settlement with online bills takes place within 24 hours from the signing of the loan agreement in a single solution by bank draft or bank transfer. In certain cases, at the discretion of the self-employed worker, an advance can be requested within three or four days, an advance which is always paid by bank draft sent to the home by registered letter and the subsequent balance shortly.

Loans: contractual and economic conditions for self-employed

Loans: contractual and economic conditions for self-employed

As regards the contractual and economic conditions, loans with bills of exchange for the self-employed can be disbursed from a minimum of 1,500 USD to a maximum of 30,000 USD and, under certain conditions and guarantees, even up to 50,000 USD. The duration of the amortization plan can be up to 120 months, but normally it never exceeds 60 months and the promissory notes issued and subscribed by the debtor are all of the same amount, given that the interest rate applied is fixed.

Loan for pensioners over 70

Pensioners receive an old-age pension from the statutory pension insurance and often a development pension and possibly an additional payment from the private pension insurance. The importance of company pensions is also increasing. The previous retirement age of 65 is gradually being increased to 67, and at the age of 70 a pensioner has been receiving retirement income for a number of years.

Lending to pensioners over 70 years of age

Lending to pensioners over 70 years of age

Many financial institutions are reluctant to grant loans to a pensioner over the age of 70 because they consider the risk of default to be high. The risk of death during the loan period no doubt increases with the age of the borrower. This also applies to the need for long-term care, which increases accommodation costs. For this reason, banks often require installment protection insurance for a loan for a pensioner with over 70 years of life experience. Alternatively, proof of sufficient life insurance for the repayment of the loan or the default guarantee of the future heir is possible. Today’s generation of pensioners is more responsible than many young people in financial matters, so that the personal willingness to repay loans is higher than average for borrowers aged 70 and over and the inevitable greater credit risk due to natural factors can be partially offset. The biological risk means that financial institutions prefer a short loan term for a loan for pensioners over 70 years of age.

The pensioner’s income

The pensioner

Income includes regular incoming payments. Financial institutions frequently frequently equate to monthly, so that they do not take into account additional private pensions that are paid out every two or three months, although the monthly amount can easily be calculated. Income from a rental is in most cases taken into account in the household bill. A possible additional income from a job that is still carried out usually does not count financial institutions in the income for a loan for pensioners over 70 years, since the probability of the job being done during the loan period is high. On the expenditure side, banks take the living situation into account, making it easier for retirees to own a home.

How do you get the student loan?

Before 2005, the Credit Aid’s sole responsibility was to cover a student’s living expenses. As a result, credit was only available to students attending an expensive private university. However, since the assets and income of the parents are counted towards the Credit Aid, many students had problems to cover the costs even approximately. Therefore, at the beginning of 2005 the Federal Constitutional Court decided that there should be more loan models to support students. The first model was launched in autumn 2004 and others followed a little later. The best known student loans are the loans from the Lite Lender and the “Capital Lender” from Agree Bank.

Student loan from the Lite Lender

Student loan from the Lite Lender

The Lite Lender’s goal is to increase the number of university graduates and above all to help high school graduates to finance their studies, whose families are not wealthy. Compared to Credit Aid, this loan is very expensive because the amount paid out is a 100% interest-bearing loan. On the other hand, the Credit Aid is 50% an interest-free loan plus 50% government subsidy that does not have to be repaid.

The maximum funding period for the Lite Lender is ten semesters, with the amounts being redefined each semester. The student can decide how much should be paid monthly. The limits are between a minimum of 100 euros and a maximum of 650 euros per month. In addition, it is customary to deduct the interest accrued from the amount requested, so that a precise overview of the repayments is always given. Once the course has been completed, the payment phase is followed by the repayment-free phase (waiting period), which is 23 months. Once the first repayment has been made, the student has 25 years to repay the loan debt. The repayment contributions can be set variably. However, an amount of at least EUR 20 per month must be repaid every month.

Like any loan, a student loan also has advantages and disadvantages. For example, in contrast to Credit Aid, the Lite Lender student loan can be applied for regardless of the parents’ income. It is also possible to combine the loan with existing financing options. These include, for example, Credit Aid or an educational loan. For the application for the Lite Lender loan, it does not matter what type of study location or subject is visited. This financing option is also attractive for EU foreigners between the ages of 18 and 30. Here too, the only requirement is that a full-time degree is completed.

If you receive such a Lite Lender loan, it is possible to repay the amounts paid out at any time in full without incurring additional costs for the borrower. As the payment amount is reset every semester, the interest is also variable. Nevertheless, Lite Lender Bank guarantees an upper interest rate limit that applies for a period of over 15 years. The reference period for the loan ends after the end of the first degree or after the 14th semester, which can be determined when the loan is taken out. On the other hand, it is disadvantageous that proof of performance has to be submitted again and again to ensure that the loan is paid out again. Failure to provide proof of achievement can therefore lead to an immediate end to payments and thus endanger your studies.

“Capital Lender” from Agree Bank

“DbStudentenKredit” from Agree Bank

The “Capital Lender” can be applied for by any student at a German university or university who is under 30 years of age. Proof of income of the parents is not required with this form of credit either. However, the applicant must draw up a detailed curriculum that shows which services have already been performed and which still have to be performed. A prerequisite for getting a loan from the German bank is the student’s creditworthiness, which the bank obtains through Credit Bureau.

As with the Lite Lender loan, the student can determine how high the payout should be. In the first two semesters, however, this is a maximum of 200 euros, in the later semesters, however, a monthly amount of up to 800 euros can be paid. The maximum funding period for the loan is linked to the amount paid out and is at least one and a half years and a maximum of five years. When the degree is finished, the payments also end. Then the so-called career entry phase begins and the student has one year before the first installment has to be paid off. The repayment amount is regulated in a new contract. To repay the loan including interest, you usually have 12 years, but you can also choose to repay the entire amount at once.

But the “Capital Lender” also has some advantages and disadvantages. A precautionary measure taken by the bank towards the student is an advantage. The bank has set a total payment limit of EUR 30,000 so that the borrower does not go into debt until the end of his life, for example because his studies had to be canceled. In addition, this loan option is particularly suitable for students who want to study abroad, because then the amount of funding can sometimes be significantly higher than the 800 euros per month set for Germany. If, on the other hand, you are interested in the loan as a non-German, more requirements must be met than by German citizens.

Among other things, it must be demonstrated that the applicant has been in the Federal Republic of Germany for more than two years, has a permanent residence and an unlimited residence permit. Furthermore, experience has shown that it is difficult to finance an entire course of study with this form of credit, which is sometimes due to the payment limit of EUR 200 in the first two semesters. Another risk is that you can easily get into the debt trap with a loan, because it is not possible to always have an overview of the debt because the interest rate varies and is therefore difficult to control.

Other funding options are also possible

Other funding options are also possible

Although the Lite Lender loan and the “Capital Lender” are preferred for students, one should not neglect other offers. Another financing option is the so-called graduation loan, which is also the oldest form of student loan. However, this form is aimed at students who are already in the final stages of their studies but are no longer allowed to receive Credit Aid. Thus, the graduation loan has set itself the task of helping these students to cope with the cost of living and the tuition fees. The bearers of this loan are often regional and in some cases limited to individual universities. Most of these offers are also cheaper than other forms of loan because there are no processing fees and interest rates are kept very low. In addition to student loans, there is also an alternative way to finance your studies, such as the student fund.

These are not awarded by banks, but by companies that receive money from investors. This offer is aimed primarily at students who perform well to very well in their studies. The duration and amount of the payout is flexible and varies from company to company. The repayment, however, is made as a percentage of income and must be made directly upon entry into the profession. The advantage of this is that an income is almost certain, since the company that promoted you often offers the students a job after successfully completing their studies.