A personal loan is a great way to cover a large purchase like home improvements or cross the next item off your bucket list. Need some extra funding to take care of unfinished business or necessities? Getting a personal loan could be a perfect avenue to fund a large expense with an installment plan.
Use Benzinga’s list of the best personal loans for seniors. We’ll connect you with lenders you can trust and useful loan comparison services.
Best Personal Loans for Seniors
Whether you’re living on a fixed income or still working, a personal loan is a great way to make ends meet or consolidate debt. With so many options from new and more established lenders, almost anyone can find a personal loan that fits their needs.
Although personal loans are often general use, there are many ways these loans are well-suited to the unique needs of senior borrowers. Whether you’re living on a fixed income or still working, a personal loan is a great way to make ends meet or consolidate debt. With so many options from new and more established lenders, almost anybody can find a personal loan that fits their needs.
Perhaps you’ve chosen to remain in your current home but need to make modifications to your house to accommodate your changing needs. This is known as aging-in-place, and more and more seniors are choosing this route over moving to senior living facilities. A personal loan can help fund a large expense, particularly useful if you’re living on a fixed income and have room in your budget for an installment repayment plan.
If you’re retired or planning for retirement, you could use a personal loan to make investments. These loans are often low interest, so it’s a solid choice to beef up your portfolio if you expect a higher investment return rate than you’re paying in interest.
If you’re nearing retirement, there are many resources you can use to improve your financial standing. Find more resources for planning and saving for retirement here.
Types of Personal Loans for Seniors
Personal loans generally look like a lump sum payment that you repay in a fixed installment plan. You’ll be offered rates and terms depending on your unique financial standing and credit history.
This is where personal loans start to diverge. You may have to offer collateral for a secured loan if you apply for a large amount. Or you may be offered a fixed or variable credit rate, or both, depending on your credit history. One large advantage of having life experience is that you’ve had longer to build up a solid credit history. This can mean lower interest rates, higher loan amounts or more flexible terms.
When approved for a secured loan, you’ll have to provide collateral. This reduces the lender’s risk, so these are common if you have something on your report that doesn’t fully rule you out but does catch the lender’s eye as potentially problematic.
Because you are taking the brunt of the risk, only accept a secured loan if you’re sure you are capable of repaying the loan as agreed. If you default, you may lose the collateral that is backing the loan.
Unsecured loans are backed only by your creditworthiness. Although these loans may appear less risky, take them as seriously as you would a secured loan.
If you miss a payment or don’t follow the terms as specified, you could face financial consequences and adverse action on your credit report.
These loans may be best if you’re trying to borrow a relatively lower amount.
Fixed-Rate vs. Variable-Rate Loans
Fixed and variable refer to the interest charged to you by the lender for the duration of your loan. Fixed-rate loans are great for those who keep a tight budget, like those living on a fixed income. You can calculate the exact amount of interest you’ll pay, so you know exactly how much the loan will cost you.
Of course, lenders are in the lending business to make money, so a fixed rate may be higher than a variable rate. Or, it may mean higher monthly payments. These are only slight downsides, as you may end up paying more over time with a variable rate loan.
A variable loan can have its upside, too. Maybe you want to keep as much cash on hand as possible as you’re renovating your house, knowing the return you get when you sell it will make up for the larger interest amount. Or, maybe you’re putting the money toward your grandkids’ 1st semester of college, so the loan won’t necessarily increase your own spending power.
Your offers will depend on your credit. You’ll select from your offers based on what you need the personal loan for and what makes the most sense for you financially.
To view your offers, use a free loan comparison service like Credible. You’ll be able to easily compare lenders you qualify with. Comparing rates and terms from multiple lenders is simple without having to bounce back and forth between a million lender websites.
Personal Loan Requirements and Criteria
Borrower requirements differ from lender to lender, but you can generally expect lenders to examine the following in your approval process:
- 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 take special considerations for retirees and seniors. Always inquire.
If you’re worried that your credit isn’t up to snuff, BadCreditLoans.com is a great solution. It’s a service that will link you with lenders willing to work with bad credit. Their small loans are great to pad your savings or pay for an emergency repair. Bonus points for the credit boost you’ll see by repaying the loan with consistent monthly payments.
Personal Loan Considerations
It’s worth saying again — when choosing a loan, be sure you can meet all of its terms. Do your due diligence to ensure you select an offer with a rate, term and fee structure that make the most sense for you.
When comparing loans, look for lenders who charge minimal fees. Some lenders offer loans without origination fees or prepayment fees. You won’t end up spending more on the loan than you expected that way. You’ll choose the loan with the most sensible rates and terms for your finances.
When searching for loans online, it’s best to use a vetted lender or loan comparison service, like those on our list. This will negate the risk of running into an unethical lender, especially ones looking to prey on seniors.
Using a loan comparison service like Even is the best way to avoid scammers. It only works with trustworthy lenders, so you’re protected from predatory lenders during the loan shopping process.
Personal Loans vs. Credit Cards
Personal loans and credit cards both provide lines of credits, but they are fairly different. Personal loans are 1-lump sum, usually deposited into your bank account. They are repaid in installments, often with fixed monthly payments over a set period of time. Once the loan is repaid, the line of credit closes.
On the other hand, the credit card is a revolving line of credit. This means you can reuse your balance as you repay it. You will usually have a set minimum monthly payment but you can pay more if you’d like. You’ll want to pay down your balances as low as possible each month to avoid getting swept up in interest.
Personal loans often offer a higher credit limit and lower interest rates than credit cards, making them better for larger purchases. Because you can reuse the line of credit and pay off your balance, a credit card is best for small or recurring charges.
Personal loans are often a better choice for debt consolidation. The personal loans from Payoff is a perfect example of this. Rollover multiple debtor payments into 1 streamlined payment (hopefully at a lower interest rate than your credit cards) and save money over time while boosting your credit. Consolidating your debt with a personal loan means increasing your credit limit and lowering your credit usage.
Get Extra Cash Fast
Young at heart or wise beyond your years, a personal loan is a great solution to add some oomph to your spending power. Whether you’re looking to consolidate debt or add value to your property, a personal loan is a great general funding solution.
Check out Benzinga’s lender roster to discover your options and alternatives. Use our loan comparison tools and get in touch with one of the lenders to take the step toward fast funding today.
You’ve worked hard all your life — don’t let lack of funds hold you back.