Occasionally, it may also be necessary for older people to borrow extra money for an emergency payment, purchase or service. Often, pensioners have to borrow money to be able to buy medication, perform medical examinations, health improvement procedures and operations, as well as for apartment or home cosmetic repairs. There are several lenders in the Latvian market offering loan to pensioners up to the age of 85.
What types of loan are available to pensioners?
In the banking sector, the maximum borrower age is not set, but in the non-banking sector, the maximum borrower’s age depends on the creditor – some creditors only grant loans up to the age of 60, and some even up to the age of 85. Often, creditors, up to a maximum of EUR 300, offer creditors up to the age of 75 even for free. When choosing a loan with interest, different amounts with different repayment terms are offered.
Short-term loans for pensioners
Short-term loans to pensioners are offered by several creditors, with a borrowing age ranging from 65.70.75 to sometimes 85 years. Apart from the borrower’s age, a significant factor in the loan allocation is the borrower’s income, in this case the pension. The higher the pension, the greater the amount of loan that is usually calculated based on the amount of income and the total amount of monthly payments. Some creditors only consider the amount of income without paying attention to the amount of existing payments.
Generally, the amount of the monthly loan payment may not exceed 30% of the pension amount. This amount is chosen by the creditor together with the borrower, making sure that both parties are satisfied. Most short-term or fast-loan institutions offer non-interest-bearing loan facilities, which are also available to pensioners – free loan for pensioners. Such a loan can only be received once with one creditor. For example, by borrowing 250 euros, you can return this amount without interest the following month when you receive a pension. By choosing a quick loan with a higher loan amount, you can usually choose to repay the loan within 1-36 months by making payments according to a pre-drawn schedule.
In order to apply for a quick loan, a person usually has to meet different conditions, most often that the borrower must be a citizen of the Republic of Latvia, receive regular income (pension or benefit), and the borrower must not be registered with the debtors or be a long-term payer.
Quick loans as usual can be done online – an SMS loan can be drawn up by SMS, but standard quick loan is usually given after the person completes the application form online and has sent the creditor all the necessary documents. Pensioners can also apply for quick loans in Maxima stores, Vita Lombards branches, Latvian post offices, as well as calling the creditor. loan24 offers such a chance at the moment , and the loan is usually between 50 and 4000 euros and has a maturity of 1 to 36 months.
Usually, non-bank lenders are willing to grant loans to pensioners, because they have regular income that is not affected by the economic situation, the labor market or any other fluctuations in the economic situation in the country. The health status of the borrower is also important because, despite regular income, lenders sometimes refuse to lend to pensioners, and loan is one of the most common reasons for refusal. The second most common reason for refusal is the amount of income or pension – monthly payments cannot exceed 30% of the pension.
Choosing the most suitable loan amount, the amount of monthly payment, the duration of the repayment period and the creditor, assesses your ability to repay the loan. Read more: quick loans and SMS loans .
Long-term loan for pensioners
Although quick creditors offer to borrow up to € 4,000, with up to 36 months maturity, often planned spending is higher, for example, when it comes to buying expensive medicines or performing complex operations. When a larger loan amount is needed, pensioners have to look for other loan options.
One of the types of long-term loan offered is a loan line – although the loan amount in this case does not exceed 4000 euros and the repayment term is 36 months, you can borrow as many times as necessary, even if the previous loan has not been fully repaid. The advantage of this loan is that the borrower does not have to use the entire amount of the loan at the same time, it can only be used when it is really needed. Also, the amount you use does not have to be refunded all at once, the most important being to make at least a minimum monthly repayment amount each month.
A loan line is usually a more profitable type of loan in terms of interest rates on quick loans, the costs of which are usually very high. Of course, the loan line of all creditors is not the same, so it is advisable to compare all offered options – the interest rate, the minimum and maximum amount of the loan amount, as well as the duration of the repayment period – before choosing one of the creditors.
If the planned spending requires a larger amount, the loan facilities should be sought from one of the banks or non-bank creditors. The greatest long-term loan plus is the relatively low interest rates and the ability to borrow a larger loan amount. Usually the minimum repayment term is 6 months and maximum 60 months, or even longer. Such loans are mostly granted without collateral, but in rare cases creditors will only allocate the required amount of money if the borrower has something valuable to pledge.
The most popular long-term loan for pensioners is a consumer loan that allows you to borrow money for various unexpected expenses, such as bill payments, home repairs, purchase of various goods, payment for medical services and purchase of medicines, etc.
The most important difference between this loan and the quick loan is the repayment term, usually 3-60 months. By choosing this type of loan, you will be able to develop the most appropriate repayment schedule with the bank or the creditor – the same payment schedule (the same amount will be paid each month) or the falling payment schedule (you will pay the same principal amount each month, but the interest rate payments will decrease each month).
The biggest drawback of this loan is that you often have to wait longer for loan approval, such as choosing a quick loan. When making a consumer loan, the bank or creditors will appreciate your ability to pay, so you will often want to see your income statement over the past 3-6 months. Another important factor in receiving a loan is your loan history – it is influenced not only by loan payments, but also by paying bills, leasing etc.
As with quick loans, long-term loans can also be applied online or by going to one of the bank’s (or non-bank’s creditor) branches. Also in this case the borrower must be a citizen of the Republic of Latvia with regular and stable income, and the borrower must not be included in the debtors register or delay the repayment terms for other payments (invoices, loan repayments, etc.).
When choosing between short-term and long-term loans for pensioners, we strongly recommend that you consider your options for repayment of loan, as well as study the services provided by each creditor – interest rates, available loan amount, monthly payment amount, repayment terms and flexibility.