Many Canadians don’t have enough saved up for retirement, and they end up carrying debt into their golden years. Not only that, but the major financial institutions in Canada have strict lending requirements, making it hard for retired homeowners to borrow money if they need to. It can feel like borrowers have to jump through hoops just to qualify for loans for retired people or lines of credit.
Do loans for retired people exist?
Even after you are done working, you can still qualify for loans for retired people. As long as lenders can confirm that you can afford the payments, they may approve your loan. If you don’t have income from employment sources, other funding options may be available to help secure the loan approval. The following situations are usually ideal for loans for retired people:
If You Have Equity In Your Home
Home equity provides an opportunity to get mortgages, loans, and lines of credit without the same challenges. Capitalizing on a loan through your home’s equity is easier than you might think, especially because interest rates are often lower.
If You Have Income From Investments
Some types of investments you may have, such as stocks that give out dividends or rent from investment properties, can be viewed by lenders as forms of income when it comes to loans for retired people.
If You Get CPP Or OAS
Canada Pension Plan (CPP) and Old Age Security (OAS) could be enough to make you eligible for a loan but check with the lender first. Some institutions don’t consider CPP or OAS as income when they’re making eligibility decisions.
If You Work Part-Time
After long-term careers, some retirees take on part-time jobs either to make extra money or just to keep busy. Employment is always viewed as income by lenders, meaning that you can use it when applying for loans.
Loans for retired people: Options
In addition to banks, private lenders like Seven Lending are an option for those seeking a loan. There are several types of private lenders, and each offers unique benefits. The financing options below are available to retirees specifically.
Home Equity Lines Of Credit (HELOCs)
If you own property and have increased its value through renovations or market changes, you may be able to use that equity as collateral for loans for retired people.
A HELOC functions similarly to a credit card in that it has a set limit but allows you the flexibility to borrow whatever amount you need, as long as it doesn’t exceed your maximum.
You can pay back your withdrawals at any time, and take out more money as you need it. Additionally, since your home serves as collateral, the lender’s risk is lower which usually results in cheaper interest rates than other types of loans.
Contact Us
If you have any questions about loans for retired people or if you want to learn more about Seven Lending, please feel free to give us a call. We are always here to help you!