Everyone wants to be mobile, including retirees who want to enjoy their retirement and still want to discover the world. Even those who are over 70 years old do not want to do without a new car that will keep them moving and reach their destination.
Pensioners who cannot provide collateral have difficulty applying for a loan for pensioners, but it is not impossible. There is no legal age limit on how long a car can be financed. However, the situation is different for banks, which often set a limit in order to be able to apply for a car loan for pensioners. But there are also banks that follow the trend of time and push this limit upwards.
What are the risks of the pensioner?
Although pensioners have a longer life expectancy, there is still the “biological” risk they pose. The diseases increase in old age, so that in some cases death can also occur. Age-related, the risk is very high that loan defaults can occur, so that the pensioner must have good arguments to apply for a car loan for pensioners. Some banks fear that the borrower will die before the car loan installment for pensioners is paid off.
Provide collateral to get a car loan for retirees
There are many ways in which retirees can show collateral to obtain a car loan for retirees. On the one hand, residual debt insurance can be taken out. If the borrower then dies, the insurance comes into effect and the loan is concluded. Another guarantee is a guarantor who can come from the family or from a circle of friends. In order to be able to act as a surety, a flawless Credit Bureau must be in place.
To ensure that there is enough to pay the installments for the loan
In addition, an unlimited employment relationship must be proven. This is the only way to ensure that there is enough to pay the installments for the loan. Another option would be to sign a contract that the bank receives the car after the death. This means that the bank is taking the least risk, because the car can then be sold again, the amount of which will be taken for the loan. Those who cannot provide any collateral can expect interest rates to be set very high. As a result, the loan that is taken out becomes very expensive. Then the question arises whether an expensive loan is worthwhile at all.
If a certain amount is available as equity to partially finance the car yourself, only a small loan amount has to be taken out. A small loan could be an advantage for this. The rates are then much lower and the risk for the bank is not very high. In addition, the pensioner can then act as a cash payer at the dealer, so there are high discounts. Cash payers at car dealers enjoy the advantages that they not only get discounts, but can also negotiate special equipment. So a car loan for pensioners does not have to be very expensive and he receives his beloved vehicle, which he needs for important trips.