Best Personal Loans for Retirees

Contributor, Benzinga

Even if you retire comfortably, living on a fixed income may not always leave room for emergency car repairs or that bucket list vacation. 

If you’re in need of more cash than you can spare to cover a large expense, but don’t want to get bogged down with large credit card balances and high interest rates, a personal loan may be your solution.

Use Benzinga’s list of the best personal loans for retirees to connect with lenders and loan comparison services that meet your unique needs.

Best Personal Loans for Retirees

With so many lenders old and new offering personal loans, you’re nearly guaranteed to find 1 that works for you. Most personal loans are general use, so they can cover an endless variety of financial needs from emergency expenses, debt consolidation or even something more fun, like that expensive new photography hobby you finally have time for. 

A personal loan can even be used to generate more income in your retirement. Investments both before and during retirement make up a solid portion of retirement funding. 

Maybe you’re eyeing a rental house as a solid stream passive income, but you’ll need some cash for repairs. A personal loan is a good choice to cover an expense like this if the expected return will outweigh the cost of the loan. 

You can find more resources for planning and saving for retirement here

APR
Fixed 5.99% – 24.99%.
Loan Amounts
$5,000 – $40,000
APR

Fixed 5.99% – 24.99%.

Origination Fee

0%–5% of the loan amount

Term Lengths

2–5 years

Min Credit Score

550

1 Minute Review

Happy Money offers personal loans that allow you to more efficiently consolidate high interest payments. Happy Money was previously known as Payoff. The company was founded in 2009 and has since helped fund over $3.5 billion in loans. Happy Money is a financial company that works with approved lending partners to fund loans. Happy Money designed its Payoff Loans to provide borrowers with the financial freedom and power to be matched with a lending partner. Benzinga reviews Happy Money Loans as a way for people to consolidate debt with potentially lower APR rates. 

Best For
  • People with lower credit scores
  • Credit card debt consolidation
Pros
  • No prepayment fees
  • Potentially lower APR rates starting around 5.99%
  • Improve credit score
Cons
  • Personal loans only available for credit card debt
pre-apply securely through Figure Personal Loans’s website
APR
Between 5.99% and 15%; autopay discount of 0.25%
Loan Amounts
$5,000 – $50,000
APR

Between 5.99% and 15%; autopay discount of 0.25%

Origination Fee

Between 0% and 5% (dependent on state and local laws)

Term Lengths

Fixed-rate loan terms of 3 or 5 years

Min Credit Score

680

1 Minute Review

Figure’s online personal loan application process eliminates the painstaking process of following up your paperwork to scan or send to the lender. With an entirely online application, you can get your prequalification rate without impacting your credit score. You’ll get approval within a few minutes and await funding in as little as 2 business days — up to $50,000 you can direct toward what matters most.

Figure personal loans come with multiple fixed term options so you can map out your payment schedule so that it doesn’t strain your finances. Figure also offers some perks for spreading the word out to others. You’ll receive a $150 gift card for every friend you refer, and they too will get a $150 gift card when their loan funds.

Figure’s home equity line of credit lets you turn your home equity into up to $250,000 cash in as few as 5 days. Rates start as low as 2.88% APR1, and you can choose among 5-, 10-, 15- and 30-year fixed term options. You can also get up to $500,000 cash-out in mortgage refinance, all with custom rate and payment options.

While you can easily land better rates with a higher credit score, Figure also has options for applicants with less than perfect credit. You may secure a HELOC with a credit score as low as 620 (except in Oklahoma where the minimum is 720).

Best For
  • Online loan application
  • Unsecured loans
  • Affordable loan fees
Pros
  • 100% online application
  • Quick funding
  • Competitive rates
  • Stellar customer service
  • Multiple fixed term loan options
  • A gift card for every referral (personal loan only)
  • Personal loan offered in all 50 states
Cons
  • Products not available in some states
  • Personal loans capped to $50,000
get started securely through SoFi’s website
Disclosure: Fixed rates from 6.99% APR to 21.78% APR. APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 3/24/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
APR
9.95%-35.99%
Loan Amounts
$2,000-$35,000
APR

9.95%-35.99%

Origination Fee

Up to 4.75%

Term Lengths

24-60 months.

Min Credit Score

580

1 Minute Review

Established in 2012, Chicago-based Avant helps people obtain personal loans while offering transparent credit. Since its inception, Avant has helped over 1.5 million people receive funding. 

One thing that makes Avant so unique is its background as a financial technology company instead of a traditional bank. Banking needs are addressed by Evolve Bank & Trust, a member of the Federal Deposit Insurance Corp. (FDIC). The FDIC insures deposits and protects consumers in case of bank disasters. Benzinga’s review of Avant determined it is a strong option for personal loans because of its reputation for positive customer experiences and fast funding options. 

Best For
  • People with below-average credit scores who need unsecured personal loans
  • People who need fast funding
Pros
  • Quick funding
  • Fixed payments
  • Mobile accessibility
Cons
  • Additional costs such as origination fees
  • No third-party guarantor such as a co-signer on a secured personal loan
Disclosure: *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.
APR
3.49%- 19.99%
Loan Amounts
$5,000 – $100,000
APR

3.49%- 19.99%

Origination Fee

$0

Term Lengths

Up to 240 months

Min Credit Score

660

1 Minute Review

LightStream was founded by its parent company Truist Financial. The company offers a wide range of traditional and innovative personal loan benefits and opportunities such as home improvement loans and fertility financing to address a wide range of needs. The company charges APRs between 3.49% and 19.99%. Benzinga offers a review of LightStream’s personal loan options that provide a variety of personal loans while minimizing additional fees and promoting financial flexibility. The company offers diverse loans with varying term lengths, APRs, and uses. For example, Lightstream offers a variety of home improvement loans that are designed to assist with specific needs such as funding for landscaping or solar panels.

Best For
  • Potential borrowers interested in quickly funded unsecured personal loans
  • Same day funds
  • People with stronger credit scores
Pros
  • Doesn’t require collateral
  • No late fees
  • Potential same day funding
  • Self-selected funding dates
  • Offers a mobile application to ease access to loan information
Cons
  • Not recommended for bad credit scores

Types of Personal Loans for Retirees

Most personal loans fit a fairly common mold. You can expect 1 lump sum payment. You’ll repay the loan in fixed monthly installments over a fixed period of time. Although you may be able to repay some loans early depending on its specific terms. Rates and terms vary with your needs and financial situation. 

But there are ways that personal loans may differ. Your financial situation, credit history and type and amount of loan will determine what loan offers you receive. 

Secured Loans

A secured loan is backed by collateral. This could be in the form of an asset like your house or even your savings account balance. 

Secured loans are often offered if you’re requesting a large loan or have something on your credit report that gives a lender pause. Only accept a secured loan if you are sure that you can repay the loan while meeting all the set terms. Defaulting could mean losing whatever collateral is backing the loan. 

Unsecured Loans

Unlike a secured loan, unsecured loans are only backed by your creditworthiness. While this means you aren’t at risk for losing important collateral like your house, your integrity as a trustworthy credit user is at stake. These types of loans are typically preferred to secured loans, especially if the amount you need to borrow is relatively low. 

If you treat these loans as seriously as you would a secured loan, you’ll be in good shape.

Fixed-Rate vs Variable-Rate Loans

Fixed and variable refer to the interest rate applied to a personal loan. Fixed rate loans are especially beneficial to those living on a fixed income as you can budget to the penny how much a loan will cost you to borrow. 

Because a loan must be profitable for a lender, a fixed rate may be higher or mean higher monthly payments. These slight downsides are usually outweighed by saving money in the long run.

There may be some instances in which a variable rate personal loan is preferred. If you’d rather pay lower monthly payments now so you can conserve cash even if it means paying more overall, this is a solid option. Maybe you need to lend your adult child some money and know they’ll be able to pay you back. If you rely in part on investments for income, you may get a higher return by investing your regular income than you’re paying in interest on the loan.

Personal Loan Requirements and Criteria

Although you’ll want to firm up on details with your lender, you can generally expect personal loan approval to rely on the following:

  • Your FICO credit score
  • Debt-to-income ratio
  • Delinquencies or negative remarks on your credit report
  • Credit utilization (your credit balance vs. your credit limit)
  • Open accounts with a positive standing (payments being made on time and the like)

Some lenders may offer special loan considerations for retirees or people over a certain age. And BadCreditLoans.com will connect you with lenders willing to work with imperfect credit. You can even use its loans to start rebuilding your credit by taking out small amounts and repaying them within the given terms.

If you think you’re on solid ground credit-wise, utilize a free loan comparison service like Credible to easily compare lenders you qualify with. You can compare rates and terms from multiple lenders without visiting a million different websites.

Personal Loan Considerations

If you’re living on a fixed income or don’t want to dip into your savings for an emergency expense or large purchase, a personal loan is a solid option. Be sure you can meet any and all loan terms before agreeing. If you can’t repay, you could face collateral seizure or see your creditworthiness take a hit. 

Try to look for loans with the best rates and flexible terms. Personal loans with minimal fees and penalties are also ideal. You won’t spend more than you planned on the loan this way.

Be sure to watch out for unethical lenders looking to prey on retirees. Thoroughly research lenders, especially online or payday lenders. 

Or use a loan comparison service like Even. It only works with trustworthy lenders, so you can safely navigate the borrowing process without worrying about being taken advantage of.

Personal Loans vs. Credit Cards

While personal loans and credit cards are similar in function. Both amplify your purchasing power, but each is more useful in different instances.

Large or unexpected expenses may be best covered by personal loans. Personal loans often offer a higher credit limit and lower interest rates than credit cards, making them better for larger purchases. 

Personal loans are also usually more ideal for debt consolidation. The personal loans from Payoff serve this exact purpose. You can roll multiple debtor payments into 1 streamlined payment, preferably under a low, fixed interest rate. 

This personal loan use can also be a great way to polish up your credit report — lowering your credit utilization while raising your overall credit limit can often mean a score increase. And having multiple types of credit on your report looks good to potential lenders.

Personal loans aren’t revolving. Your payments only go towards paying down what you owe. With open credit cards, each payment both lowers your balance and increases your available credit. Because you can reuse the line of credit, a credit card is great for small or recurring purchases that you can budget to repay monthly. 

Credit cards can also help your credit if you keep the balances low and meet the minimum monthly payment. But, they often have higher interest rates, so be careful not to let your balances get too high and pay them down as low as possible every month so using credit doesn’t cost you more than it’s worth.

Increase Your Spending Power Now

Just because you’re retired doesn’t mean your money needs to stop working for you. A personal loan can be a great way to supercharge your current spending power while budgeting for it over a longer period of time. 

This is great for debt consolidation or improving your home to increase its sale price before you finally move to that warmer climate you’ve always dreamed about. You didn’t work hard all your life to restrict yourself in retirement.

Get in touch with 1 of the lenders or loan comparison services on Benzinga’s list to get cash in your account ASAP.