by Sabine Hildebrandt-Woeckel, Euro am Sonntag
Kredit from 65 “,” Loans for pensioners in comparison “,” Get top interest rates in old age “,” Loans for pensioners at top conditions “: Anyone looking for loans for older people on the Internet or in the shop windows of banks and other financial service providers seems to be inundated with offers. So are the negative examples that have been in the media recently, rather the exceptions? So, the retired couple who cannot finance a car or the elderly lady who refuses a loan for a new heating system Is it not true that the creditworthiness decreases significantly after the end of the job?
“Yes,” says Susanne Götz, financial services advisor at the Bavarian Consumer Center, “it is clearly more difficult for older people.” Dirk Stein is different. “Definitely no,” replies the man who is responsible for retail banking and consumer protection at the Federal Association of German Banks (BdB). “We cannot confirm that.” Age, Stein continues, “is not the deciding factor when it comes to lending”. But he also puts a caveat afterwards: “One of the many criteria” is it.
How we approach the problem: Because the fact that retirees are faced with major challenges in everyday life, despite many tempting offers, definitely has its reasons, and that lies in consumer protection of all things, as consultant Götz also knows. The expert continues that a lot of advertising is at best a marketing strategy and, at worst, fraud. In the first case, it is “about normal installment loans”, as the comparison portal operator Verivox frankly admits. Although they are specifically advertised to retirees, this by no means means that the loans are given preference to them. In the second case, it is simply a rip-off that aims to catch those who have been rejected elsewhere and to collect horrendous interest for them.
Downside of consumer protection
What makes life difficult for pensioners with financial needs are requirements such as the residential real estate loan directive or the creditworthiness check, according to which banks are generally only allowed to grant loans if there is no significant doubt that the borrower can repay the loan. With retirees, two aspects immediately catch the eye: the mostly significantly lower income and the higher risk of death, both of which – at least at first glance – increase the probability of default.
According to Verivox, many of their affiliated banks only grant loans if they have been repaid by the age of 75 or 80. According to the company’s internal statistics, ten percent of borrowers are 60 or older, and just three percent are over 70. Not all providers communicate this so openly. Experts assume, however, that many banks are proceeding much more restrictively and sometimes close the bulkheads as early as the mid-sixties. Kai Weber from the financial consulting firm Dr. Klein sees the end at 75, on the pages of Smava it says “until the completion of the 74th year of life”.
The mandatory credit check is a sensible and good regulation for protecting consumers because it ultimately strengthens their civil law options, emphasizes lawyer Götz. If they are overwhelmed by bad advice, for example, they could take action against their bank. In practice, however, according to Götz’s experience, the exam often leads to a higher age being prematurely overestimated or used as an excuse. In other words: unwilling or ignorant consultants want to avoid problems or expenses and do not even concern themselves with the requests of their potential customers at an advanced age. A practice that other groups such as the self-employed or people with fixed-term contracts experience again and again.
That there are these effects has also been registered in the Federal Ministry of Justice and Consumer Protection. Again and again, according to a spokesman, the ministry received citizen complaints in this regard. “However, there are still no reliable figures.” In particular with regard to real estate consumer loans, i.e. loans secured by mortgages, an evaluation is currently being carried out to determine whether age discrimination can be ascertained. In addition, a clarification was made in the last legislative period. Accordingly, there are constellations in which “the possibility that a borrower cannot repay the loan within his (statistical) life expectancy does not have to be taken into account”. In other words, you should look carefully.
And this is exactly what Götz recommends that loan seekers should insist and “fight for a comprehensive credit check”. Older people in particular, in their experience, give up much too quickly and allow themselves to be shocked by a first rejection. If the advisor doesn’t want to go along with it, it is often worth calling in the department or branch manager. Because there are actually a lot of adjusting screws. In addition to ascertaining the current status, a real creditworthiness check also includes consideration of future events such as the payment of savings contracts or life insurance policies.
It is also important to examine alternative forms of fundraising, especially in the case of higher sums, and, for example, to include support measures in the case of planned structural changes, which often have no age restriction. However, experts believe in residual debt insurance, which is sometimes prematurely brought into play as a solution, in absolutely exceptional cases. “Because they make credit disproportionately expensive,” says Götz, not only.
Real estate as security
Real estate that has been paid off can also be used as collateral, although the possibilities in this country – at least currently – are not quite as diverse as in other European countries or in the USA, where, for example, lifetime mortgages are common. Although this possibility of granting a loan, which is also known as a real estate consumption loan and is a good alternative, especially for retirees, has been expressly excluded from the requirements of creditworthiness checks by the legislator. But so far, consultants like Kai Weber regret that there is still a lack of suitable products on the market. Weber is certain, however, that this will change in the future. Targeted inquiries can therefore be worthwhile.
There are also various other options for property owners to receive annuity or one-off payments from the property. Since the property has to be sold at least in part for this, both consumer advocates and owner associations are critical. The model must pay off equally for buyers and intermediaries. Therefore, “there is usually not enough for the seller who urgently needs money,” says Petra Uertz, federal manager of the home ownership association.
Like financial advisor Weber, she also complains that there are still no good products. In their opinion, this form of fundraising could become interesting in old age if the state encouraged it and set a framework. Especially when there are children, she advises property owners in financial difficulties to hand them over to the children early. “They’ll get a loan then.”
Thoroughly checked, doesn’t matter age
However, all the experts agree on one point above all: the more extensively loan-seeking retirees deal with the topic in advance, the greater their chances. This also includes not only asking the long-standing bank advisor. Older people in particular, according to financial advisor Weber, often never even consider looking beyond their own house bank. It is precisely the one for amounts above 2,500 euros that is often not the best choice. Comparisons show that direct banks are often much more open.
If a check actually takes place and if the creditworthiness is correct, banker Stein specifies once again, the age is not the decisive factor. The same test criteria apply as always. An assessment that is confirmed by the comparison portal operator Verivox. The loan terms are then by no means worse. Seniors aged 65 and over, according to an internal evaluation of the company, pay an average of 3.14 percent interest (median rate) and are therefore even slightly cheaper than younger people. They have to put down 3.17 percent.
Advantages and disadvantages of consumer loans
When there are no savings or the pension is too small, there are ways to get money without having to sell your home.
More and more property owners in Germany are facing the same problem: They are wealthy on paper, but in fact there is not enough money to repair the roof, a new car or a nice trip. Here, the lifetime or reverse mortgage offers a solution in which the home – unlike the classic annuity models – does not have to be sold. The customer remains the owner, retains all rights and can even inherit the property.
As long as the lifelong mortgage is running, the property serves as security for the lending bank, but it does not receive any interest or repayment payments for the loan granted. Only when the customer dies does the provider get the borrowed money back. There are two options here: The surviving dependents take over the loan and pay out the bank. Or the property is sold, the bank retains its share and reimburses the remainder to the bereaved.
Tips for conversation
Anyone who is well prepared to talk to their bank advisor has a far better chance of getting a loan – regardless of whether they are of advanced or less advanced age
Insist on a competent interlocutor.
Put together in advance what additional collateral you can offer and check your own creditworthiness with Schufa (information can be requested once a year free of charge).
A high overdraft facility can lead to rejection. Offer the bank to reduce the overdraft facility.
In order to increase the creditworthiness, it can make sense to take out the loan together with the partner.
The shorter the term, the greater the chances.
If no installment loan is offered, negotiate a credit line with flexible repayment options. You can use it like an overdraft facility, but at significantly lower interest rates. Since the bank only has to consider the interest in the credit check, the chances are greater here.
Find out in advance what funding measures are available for your project and make the bank advisor aware of them. Do not rely on the bank to point out subsidies to you on its own.
Even if the first bank is ready to negotiate: Compare!–
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