Pensioners over the age of 70 are not courted as credit customers by financial institutions, although older people are much more reliable at fulfilling their financial obligations than young borrowers. German credit institutions do not make a clear statement about the maximum age of possible borrowers so that they do not face the accusation of age discrimination.
Borrowing by retirees over 70 at classic financial institutions
The fact that financial institutions are reluctant to grant loans to pensioners over the age of 70 can be explained by the increasing risk of death with age. The loan seeker can exclude this risk by taking out credit default insurance. As an alternative to default insurance, offering an heir as a co-applicant or as a guarantor. With a loan for pensioners over the age of 70, relatives with little economic knowledge can effectively provide a guarantee that is limited to death.
Another possibility for reducing the credit default risk due to the temporary death of the loan customer is the agreement of the shortest possible contract term, which is naturally associated with higher monthly installments. The amount of income for 70-year-old pensioners is usually not an obstacle to credit, since the benefits of the statutory pension insurance in conjunction with additional pension payments are sufficient for living expenses and to pay the credit installments. Many insurers aggregate the amounts for three months when transferring the private supplementary pension, which is why not all financial institutions consider the private pension to be a regular income.
Borrowing by pensioners over 70 on private loan brokerage platforms
An alternative to the classic bank loan is the loan for pensioners over 70 years of age taken out via an internet platform for arranging private loans. Decisions on lending are made by the members registered as donors, whereby they largely depend on the stated purpose and on orient social criteria. For social reasons, they like to draw a loan for a pensioner over the age of 70, precisely because conventional banks are reluctant to lend to senior citizens.
Despite the detailed description of the purpose of use and the personal situation of the loan seeker, the brokerage via the Internet takes place anonymously, because the personal bank details and the contact addresses of the members are only known to the operator of the platform. This is also responsible for the technical processing of the personal loan.