Loans to pensioners – What alternatives to the sale of the fifth?
Being a pensioner does not always allow the pensioner to enter the world of finance. A limit that can mainly concern personal loans, as retirees generally:
- they have no possibility of improving their income and financial position (unless they have a very high pension, and in any case well above the minimum or social pension);
- they have a high age, with consequent difficulties in guaranteeing the repayment of the loan, especially in the case of medium-long repayment plans.
The speech is simplified if we consider the sale of the fifth of the pension, which always falls into the category of personal loans to pensioners, logically on condition that the limits set by the law are respected. The same applies to the multi-year ex Government agency loan accessible to those who have the minimum necessary contribution requirements to the Unitary Fund. We remind that generally the social security pensions paid for assistance or as a subsidy are not considered valid for financing purposes.
Pension grant: is it really the best pensioner loan?
As we have said, the sale of the fifth in many cases may be the only way to follow to obtain a fair amount of liquidity even if it may not be the ideal solution from an economic point of view, especially if the insurance component remains the responsibility of the applicant.
The sale of the fifth of the pension was introduced in 2012 precisely to compensate for the difficulties encountered, when a certain age is reached, in obtaining loans (especially personal loans).
It is also often known as the sale of the fifth social security, a definition due to the fact that social security has entered into a series of agreements that aim to obtain less onerous conditions for its pensioners (regardless of the employment category to which they belong) by the banks adherents. But beware: the agreements with the Authority are not mandatory (their subscription is optional), so to take advantage of it, you need to contact one of the participating banks. The updated list of the various credit institutions can be found on the dedicated page of the social security website.
Loans for retired social security ex Government agency and not
One of the advantages that only employees and retirees in the public sector had, was the access to the various forms of loan reserved for them, which made it possible to obtain considerable sums, despite the achievement of a fairly high maximum age, which had been set at 90 years.
Today the age limits have also been raised by some affiliated banks and not only. For example, OneCash is willing to go up to 80 years, Intesa Sanpaolo to 83 years, and DCF up to, and not beyond, 90 years.
To have updated information, however, it is essential to refer to the individual bank or financial institution, since even within the same financial group the age limits can be different.
As an example we can consider DCF and Astro (both belonging to the same Bankate group) for which we have the following maximum ages:
- DCF: 90 years at the end of the plan;
- Astro: 75 years always at the end of the financing.
However, even in the case of the sale of the fifth of the pension there are limitations, which on the other hand do not affect the salary-backed loans. In fact, pensioners can obtain sums, calculated not on the entire pension, but only on the part that exceeds the transferable quota, equal to the minimum social pension.
This leads to lower sums, and an additional formalism, since the pensioners themselves must obtain the document that allows them to certify their transferable quota. This is unless you contact credit institutions affiliated with the institution that can access the social security database electronically, simplifying the procedure.
Examples of loans for pensioners
- Bankate : offers the social security Retired Loan, also intended for non-current account holders, with an amount that can be repaid up to 120 months (maximum age 83 years at the request and up to a maximum of 85 years upon expiry of the plan amortization) The maximum amount that can be requested can be between 3600 USD and 75 thousand USD;
- OneCash : the loan can be requested with maturity within 80 years, for a maximum amount of 69 thousand USD and a maximum duration of 120 installments;
- DCF : the deadline, as mentioned, is within the 90 years, the maximum amount is 75 thousand USD, and the duration also in this case up to 120 months;
- Bankors : this loan can be requested by all social security pensioners (also formerly Government agency, ex iPost, and ex Enpals) provided that the amortization schedule does not exceed 84 years. Duration from 36 to 120 months (ie maximum applicant age within 81 years) and amount that depends on the certification of the transferable fifth depending on the duration, as a maximum threshold is not established;
- Cleopar : the sale offered by the Milanese bank provides up to a maximum of 75 thousand USD that can be requested, while the maximum age of the applicant is 79 years.
The lifetime mortgage loan
To give pensioners even more freedom of choice in obtaining liquidity, an annuity loan was introduced in 2005, which has a special feature compared to other forms of financing: the pensioner will not have to repay the installments to repay the loan. The heirs will eventually have to occupy it, unless the pensioner himself decides to extinguish the loan early. The main requirements are quite simple. In particular, the pensioner must:
- have already turned 60;
- be the holder of a property that is given as a guarantee to the bank that provides the life loan.
The sum granted is calculated on the basis of the value attributed with expertise to the property reduced by a predetermined percentage (these percentages change from bank to bank and also depend on the age of the applicant). According to the updated legislation in 2015, if there are two owners, both must meet the necessary requirements and sign the contract. Some credit institutions can put another condition, namely to inform the heirs officially. We remind you that the interest will accrue on the sum financed until the applicant’s death. At this point the bank will offer two possibilities:
- waiver of the heirs to redeem the given property as a loan guarantee, therefore sale and credit satisfaction;
- redemption of the property by the heirs who will return the principal plus the interest accrued within the time stipulated in the contract.