While applicants for Credit bureau-free loans from Best banks can usually not be older than 55 or 58 years, German financial institutions do not specify a binding maximum age for lending. A corresponding clause would in any case be regarded as age discrimination and would violate law. Even though they do not generally reject seniors as credit customers, banks are reluctant to lend to people over the age of 70.
The reason for the reluctance is the risk of death
Most senior citizens have Credit bureau information without negative entries and are used to paying their financial liabilities on time. Thus, the loan for 70 year old applicants is actually not associated with an excessively high risk of default – if the customer experiences the end of the contract term. However, the risk of death during the term of the loan increases significantly with age at the start of the contract, which is why credit banks prefer short contract terms when lending to senior citizens.
For the sake of the longer life expectancy of the female population, they are also more likely to grant a loan to 70-year-old women than a loan to men of the same age, so that it is best for women to apply for the loan for retired couples. Another option to obtain the desired loan for 70-year-old applicants is to provide a future heir as a guarantor. A guarantee can be limited to the case of death and is then also recognized by relatives and the existing emotional attachment of courts.
The income of 70 year old borrowers
Even if some retirees continue to work on a side job, financial institutions do not take income into account in their household accounts. This is understandable, since an early abandonment of secondary employment is to be seen as possible. For most pensioners today, the old-age benefits from the statutory pension insurance and the supplementary payments from the promotional pension and private pension insurance funds are sufficient to cover the credit costs in addition to the cost of living.
However, not all financial institutions take into account the income from private pension insurance for a loan for 70-year-old pensioners if it only pays out every two to three months. Affected borrowers are looking for a bank that converts the amounts paid out in other than monthly intervals to the calendar month and also takes them into account in their household accounts. In addition to conventional commercial banks, a loan for 70-year-olds offers a platform for private lending, since their members like to issue a senior loan for social reasons.