Senior citizens in industrialized nations including the United States are living longer than ever before. This can pose a serious financial challenge for them because it’s entirely possible that they may outlive their savings. Even worse, the money is likely to run out at the worst possible time: near their final years when they are at their most frail and hence, their least likely to be able to secure and hold a job to provide some additional income.
There may still be a fixed income such as Social Security coming in, but it doesn’t take a degree in financial planning to know that Social Security alone is usually not sufficient to meet daily living expenses. Those seniors who don’t have children or other relatives who can help out may need to look into securing a loan.
What Sort of Loans Can Senior Citizens Get?
Before you get a loan, you absolutely need to know your credit history/score. This will determine whether you qualify for ANY loan and if you do qualify, your interest rate. If you don’t know your credit score, you can check it online instantly for only $1.
One type of loan is a personal loan. You can go to your bank to apply or you can use an online lender that will quickly determine whether you qualify or not.
If people are no longer working and can’t expect to be doing so in the future, why would they be able qualify for a loan? The answer lies in the fact that many seniors are cash poor but house rich. Simply put, they have long ago finished paying for their home, which means that they actually have a large amount of savings built up – it’s just not in the form of spendable cash.
If you don’t have good credit history or you need small cash sums fast, you can apply for a paydal loan which is basically a short term loan. It’s easy to get Payday Loans but keep in mind you are required to repay them, usually within a few weeks otherwise you pay huge interest rates! If you want to apply online, we recommend 60 Minute Payday Loan
If you have a business idea and need some cash to fund it, you can try applying for a business loan. These types of loans are harder to get because you need to have a solid business plan before you will be given funding.
You can get loans specifically to finance the purchase of a car. These are called auto loans. The rate you get depends on your credit history. You can apply for auto loans online.
One option is of course to sell the house and acquire cheaper living quarters, which will make the balance available to meet monthly living expenses. This has the disadvantage of forcing a senior citizen to leave his or her cherished home. For some, that alone is a deal breaker.
Fortunately, it is now possible to both stay in your home and use it as spending capital in the months and years to come. How is this possible? Simply put, through the financial magic of the reverse mortgage. By selling the house to the bank but arranging for the sales price to be paid in monthly installments over a long period of time, the senior citizen can secure a working income to help meet expenses when other forms of savings have been depleted.
A reverse mortgage will not require the senior citizen to leave the home until the reverse mortgage itself has been completed. In most cases, the loan contract is written with reference to the end of life of the loan recipient, meaning that the senior citizen can stay in the home until he or she dies. Only then is the loan finally settled completely. The balance of monies still due, if any, will go into probate and be passed along to heirs using the usual channels. The house, as intended by the original contract, will go to the bank and be sold in order to recoup the money slowly disbursed over the course of the reverse mortgage.
Beware of reverse mortgage contracts that simply specify payments “until death” with no qualifiers, since that could potentially mean that you sell a $400,000 house for $1,000 if the monthly payment is $1000 and you happen to die a mere month after signing the contract. Look for language that will protect your heirs in the event of your early death.