Many retirees find it very difficult to find a suitable loan. This is true even if you have a good credit rating and a considerable fortune. For most banks, the risk of premature death, which is also called biological risk, is far too great. For this reason, they will almost always reject a loan for 75 year olds. It does not matter that the pension is a very safe income, which is paid until the end of life.
The biggest chance of getting a loan for 75 year olds is always when the applicant turns to his house bank, with which he often has a longstanding relationship of trust. In addition, there are some banks that offer their loan offers specifically to retirees who have already completed the 70th, 75th or 80th year. However, these banks are likely to be exceptions. The fact that people are getting older and still enjoy the best of health, even in old age, is given insufficient consideration in lending.
However, the chances of a loan increase significantly if the retirees succeed in finding a younger and solvent guarantor who would be willing to step in after the death for the loan installments. Many banks also agree that the loan for 75-year-olds is covered by a residual debt insurance.
This residual debt insurance would take over the payment of the monthly loan installments if necessary or compensate the open loan amount after the death of the pensioner. A debt-free property or a larger securities deposit are excellent loan collateral, but usually are not enough for a loan for 75 years.
Anyone who has found a suitable lender despite the difficulties mentioned above could freely choose not only the term, but also the amount of the monthly loan installment. However, a problem with loans for retirees is that banks will only approve very short or medium-term maturities. Only in very rare cases will there be a loan for 75 year olds whose term is more than 48 months.
Many banks limit the term even to 24 or 36 months. After the term, the monthly repayment rate should also be determined. It would be higher, the shorter the runtime and the lower the longer the runtime. A longer term is always associated with an increased risk for banks. For this reason, borrowers must expect that banks will charge significantly higher interest rates than a loan with a shorter maturity. A credit comparison could provide the necessary clarity here.