Need Extra Cash? Here's How To Get A Loan When Retired
February 10, 2021 | Louis Tully
It's common for those of you in retirement wondering how to get a loan when retired to believe that you can't do it. But that isn't the case!
While it might be harder for you to qualify, it isn't impossible. You just need to know where to look to ensure you get the best deal.
So, if you are older and wondering how to get a loan when retired, look no further. There are lots of monetary aids out there for you, but we'd suggest steering clear of anything that draws down unnecessarily on your IRAs or 401k plans. Instead, look for external financial aids like the ones we are about to suggest.
But before that, we'll set out the two main types of loans that you can count on if you're a self-funded retiree.
4 Ways to Get a Loan When Retired
If you receive your income from retirement savings, rental houses, or investments, you are a "self-funded retiree". Lenders will determine how much they can give you using one of the following two ways, so that you don’t have to wonder how to get a loan when retired:
- Drawdown on Assets — The lender looks at regular monthly outgoings from your retirement accounts and calls it income.
- Asset Depletion — Here, the lender subtracts down payments from your assets, figures out 70% of the answer, and then divides it by 360 months.
These methods allow you to apply for a plethora of loans which we'll discuss in the next section.
1. Get a Home Equity Loan
A home equity loan is a secured type that allows you to borrow money based on the equity you have in a property. The majority of home equity loan lenders require you to have somewhere between 15 and 20 percent equity in your home and a pretty good credit score (620 or thereabouts).
There was a time when lenders would allow for interest deductions on this loan type but sadly this is no longer offered due to the Tax Cuts and Jobs Act.
Having said that, if you are using the money for home renovations then you can receive a deduction (usually).
2. Try a Reverse Mortgage Loan
A reverse mortgage loan gives you either a lump sum or a regular monthly deposit after looking at the value of your home.
You will not have to pay this loan type back until you (the homeowner) die or move out of your house. The thought process behind this is that you or your next of kin can sell the house to pay off the loan in full.
Depending on the provider, they might give you the option to refinance the loan in order to keep your house or the lender might be allowed to sell your home to settle the balance.
When looking into this form of a loan, it's important to think about whether your next of kin has enough money to repay the loan should you die. There are some reverse mortgage loan lenders who prey on older adults who need cash and won't tell you about the ins and outs of the agreement.
3. Look into a USDA Housing Repair Loan
For those of you who meet the low-income bracket, and you need money to repair your home, this is a good one. The interest rate is incredibly small, and you get 20 years to pay off the loan (the maximum sum available being $20,000).
To qualify, you have to be the homeowner, live in the house, and be unable to get a loan elsewhere. There's no denying that you'll have to jump through hoops to get there but it's worth it in the end.
4. Try Carolina Payday Loans
For those of you still wondering how to get a loan when retired, a payday loan may be the answer you need.
Originally, payday loans were designed to tide working people over until their next payday (hence the name), even if you older in your years and wondering how to get a loan when retired. However, they are now a good financial aid for just about anyone over the age of 18.
The process is quick and simple when you follow our step-by-step instructions found below to getting a payday loan online:
- Head to CarolinaPaydayLoansInc.com.
- Submit the cash online form. It should take no longer than 5 minutes. We've simplified it over the years to only request basic information.
- Pick up the phone. One of our loan representatives will give you a call to explain the rest of the payday loan process. If you have any questions, it's a great idea to ask them now.
- Go to your nearest Carolina Payday Loans Inc storefront. Make sure to bring your most recent income slip (pension, etc.), government-issued ID card, and a blank check from an account in your name.
- Wait while a loan associate evaluates your documents. This helps them to figure out how much money you can borrow (up to $550).
- If they qualify you, you will receive your money on the same day.
The best part about all of this is that it takes a mere 30 minutes! What are you waiting for? If you are still wondering how to get a loan when retired, don’t trouble yourself any further. Let Carolina Payday Loans Inc. help you get the fast money you need with a same day payday loan near me.