Less than ten years ago it was difficult or impossible to get a loan as a pensioner. But pensioners in Germany are often wealthy and receive stable payments in the form of pensions, so that the banks could not exclude this group of people in the long run.
Reality is and remains – a younger person is easier to get a loan. It’s because he has more time to pay back. In fact, the older person does not have as high a life expectancy, so that in addition to shorter repayment times, insurance such as life insurance must also be taken out, which makes a loan even more expensive.
Generally speaking, loans for the elderly are both costly due to the higher risks of decease, as well as due to the shorter term. For example, a home loan gets a 30 year old on average with a repayment period of 25 years. A 65 pensioner is granted this period as never before. Even if the loan amount should be the same in both cases, the repayment rates for a pensioner will be much higher due to the shorter loan duration.
Less than ten years ago, the topic looked sad – pensioners were denied credit requests. In the meantime, the banks have recognized the potential of older people: they often have collateral in the form of real estate or land. And they have a good credit rating because they receive a stable income in the form of a pension, which will not change in the coming years, as it could happen to a younger person if, for example, he becomes unemployed. So many lenders now see pensioners as creditworthy , even if it differs from case to case.
As mentioned above, there are a few points that stand out negatively when you decide to take out a loan as a pensioner. Since the banks want to protect themselves as much as possible, they will insist on one or even more insurance policies with pensioners.
Death or any illnesses should be well covered, because the banks do not want to lose their money because of personal blows of fate. Furthermore, as a pensioner, one has to consider that badly insured loans exist even after they have passed away, so that heirs can possibly be burdened.
Both for younger and older people: Before you take out a loan, you should think twice about whether you really need it. And if young people can show more flexibility in the case of a force majeure such as overestimation of their own resources or additional financing requirements and react quickly to circumstances by taking on additional work or getting debt rescheduled, the retirees will find it difficult. Furthermore, older people must not forget that age discrimination is actually prohibited in Germany, so that the lender can be informed if there is any suspicion.
75 is the age after barely any bank lends more. As long as your own age is below this number, there is nothing to ask for funding. Should the house bank decide against lending, there are still the possibilities to ask at another bank or to look for alternative providers.
Conclusion: Of course, no pensioner can walk like a top manager in a bank and come out with a desired loan amount after 10 minutes. Even if you might have to take out one or two more insurances, or have to accept higher monthly repayments due to the shorter repayment period, older people are just as welcome with lenders as younger ones.