Pensioner Loan vs. Bank Loan
Many people look at Pensioner Loans and don’t understand why it would be a wise choice to pick this particular type of loan over your average everyday bank loan. Although Bank loans are more widely known, the pensioner loan is steadily increasing in popularity as more and more are hearing about it and some of its key advantages. In this article we are going to talk about how pensioner loans compare to bank loans.
The first thing you have to look for with any loan is the criteria. This is what you must be do/have to successfully apply. This varies between various different vendors and different types of loan, so here we are going to look at the criteria for a secure bank loan and a standard pensioner loan.
Secured Bank Loan Criteria
- Be over the age of 18
- Be a homeowner
- Be in full time employment
- Have a good credit history
- Only need an amount that the bank allows
- Have no other major financial commitments
Pensioner Loans Criteria
- Pension / Pensions with the value of £20,000 or more
- A Pension that allows transfers
You can clearly see from the above that the initial lending criterion is far easier for a pensioner loan, with the only major requirements being a pension with over £20,000 waiting. Pensioner loans do not take into account your age, home status or credit history. This is because you don’t have to worry about monthly repayments when you take out a pensioner loan, you borrow the money and then simply pay it back when you retire and receive your fund.
What do you have to worry about once you have your loan?
Once you have your bank loan, the worrying does not end. As mentioned previously with a pensioner loan you do not have to make monthly repayments, however with a bank loan you do. The problem with monthly repayments is that they aren’t as simple as they seem. You have interest added on top of the repayment which means you pay more than you originally borrowed and the bank profits from your loan. If these monthly payments are too much and you can’t afford to pay up, you can end up seriously damaging your credit rating and also lose your house initially used to secure the bank loan.
After your pensioner loan has landed in your bank account it’s all plain sailing from there. As pensioner loans are theoretically secured by your pension fund, vendors feel no need to put extremely high interest rates on the repayment. Typically you will find that pensioner loans have 0% interest or a very small amount at best. The really amazing thing is that there are NO monthly payments. These loans are designed to be paid back when you receive your real pension, so either when you retire or if you die before retirement. This means you don’t have to stress or worry, and you can sit back and enjoy your loan as intended.
One thing you should take into account when you take any sort of loan, is how to be responsible with your money. A bank loan could seriously damage your reputation and credit if not handled appropriately. Although pensioner loans are slightly easier on the borrower in terms of consequences, it is still a large amount of monthly that should be used responsibility and only when needed.