Loans for Retired and/or Disabled People

Hello again gang, and today we want to talk about loans for retired people and disabled people. This speaks close to my heart because I know how difficult it can be to get approved for a personal loan if you are not employed because you are disabled or simply retired. Really want to make sure people don’t make the mistake of applying for a loan with a lender (or lenders) that would take advantage of the elderly or the disabled. It’s quite insidious to take advantage of people who, for any reason, can’t get employment in the job market and are desperate for a loan.

First a Note About Getting a Loan on a Fixed Income (Because usually retired or disabled people are on a fixed income)

For fixed income (due to retirement) and/or disability income a few points are worth remembering. Though it may be difficult to budget monthly to live with dignity, let alone service a new loan, banks accept this income as being as secure as steady employment, depending on your circumstances. If you can service the loan and remain within their lending ratios (GDS and TDS) you are very likely to get approved for that loan.

Commonly people on fixed incomes assume they automatically don’t qualify. That is a myth. Think of it this way; if you have the cash flow available to service the debt, and it’s a proven source of income, why wouldn’t a lender want to take a risk and lend to you? Don’t forget, that they are making a lot of interest off of your loan approval. Perhaps they wouldn’t consider you if your credit rating is poor. Perhaps your fixed income may expire, or is conditional on some other commitments? When in doubt, arrange an appointment with your branch to ask the loans officer(s), what would it take for me to secure a new loan through your bank?. If they are an honest lender, they’ll tell you exactly where you stand.

In cases of disability income you will be required to prove income is long-term and guaranteed for the duration of your life if applying for a long-term mortgage of 30 or 40 years.

If you are in a wheelchair or you are crippled due to an injury or a disease, then getting approved for a loan can be very difficult. Why? Because banks, their loan officers, and private lenders will not consider your assets as security on the loan. Often lenders will not consider disability pension, or social security income as a valid income to pay down a loan with them. So what do you do?

The first thing to do is to avoid non-legit lenders, and make sure you apply for your loan with reputable lender. Loan sharks are everywhere these days and they are still on the front page of every major news paper, defrauding clients and promoting bad sub-prime loans for the sole purpose of reselling them to others. Of course, in your case, if you are retired or disabled you likely just need a smaller personal loan, and not a full blown mortgage. Some retired people who have their houses paid off will apply for a reverse mortage to liquidate some of their asset(s), but that is not likely your case, considering the title of today’s discussion.

Getting Approved for a Loan if You Are Retired

The most important factor for getting approved for a personal loan if you are retired, is to show the lender you have income stream outside of a 401k or disability pension. This is why so many retired people take on part time jobs. They apply for part time jobs for three reasons usually – one, for the medical insurance, two for the extra income, and three, so they can get approved for a small personal loan.

So this is an otpion to consider. Can you get out of the house a few days or evenings a week and work a part time job that does not cause much strain on your body, causing you pain and discomfort? If the answer is yes, I highly recommend doing so. When you go see a lender, bank, or credit union, they are not going to have a problem giving a loan if you are semi-retired. If you can’t prove to the bank that you have an income to pay down the loan with, they are not likely to approve your financing.

Another way to get approved for a loan if you are retired is to have strong co-signer or co-borrower. These are two entirely different types of loan products. A co-borrower is on the hook for the paying back of the loan if something happens to you – that can mean many things resulting in you not being able to make your monthly installment. You may not be able to make your installment payment anymore due to death, or lack of a sustainable income. For whatever the reason may be, the co-borrower will be then held responsible to pay back the loan in full, with all interest (APR) and closing fees.

A co-signer is different because the retired individual (maybe you) is simply being “vouched for” by the co-signer and they are not “on the hook” for paying the bi-weekly, or monthly installment payments. Often a the would-be borrowers pride will not allow such an arrangement because the co-signer or co-borrower would likely be one of their children or family member. The retired and the elderly usually have a great deal of pride and would never even enter into a loan agreement that was using a co-signer. But you know the old saying – right? – “Pride goes before a fall”. When it comes to eating, keeping a roof over your head, paying for medication, and clothing yourself, you may HAVE to consider a co-signer or co-borrower on the loan agreement documentation.

Getting Approved for a Loan if You Are Disabled

Getting approved for a loan if you are disabled can be very difficult, and it saddens me deeply to see people in such financial situation when they have enough daily challenges to overcome. Being disabled can be VERY expensive, even with all of the social nets in American and Canadian society. The disabled are often helped with social programs so their monthly expenses are cut down considerably – but disabled people are HARDLY living in the lap of luxury.

I encourage people who are disabled to find some way they can create some income so that the banks and lenders will consider giving them a loan. There are many disabled people who thrive in our society and in our communities – there are disabled people who make millions of dollars actually, so try not look at your physical challenges as hopeless – there is ALWAYS hope! Of course there are some case where people are disabled so badly that they cannot do any kind of physical work. They may be in a wheel chair and they may not be able to even use their hands to type, use a phone, or carry out everyday simple tasks. In these cases it usually comes down to the family members of the crippled (I should say disabled as some find the word crippled very offensive) to lend them some money, or help them with a free personal loan that does not need paying back. I suppose this is a gift, or some kind of charity though, and pride does not allow many completely disabled people to except charity.

IF, however, you are are refined to a wheel chair can use your hands and speak, you can earn some money. If you can earn any money outside of what you have coming in every month social security or a disability pension, then it’s much easier to get approved for a personal loan. I’ll give you a great example. You can start creating an income online by using your computer from home. There are many ways of making a monthly income just by using the phone or typing on your laptop. As long as you have a phone line and an Internet connection, then you can make some money – in some case lots of money. This is how we actually started California Loan Find – we hired this company to build this turnkey business blog for us.

For disabled people, just like retired people (as above) if you have a co-borrower or co-signer, that can help greatly in getting approved for a personal loan at your local bank or private lender. Try and be careful when dealing with online lenders. Make sure that if you are on any kind of online loan site you read their terms of service pages, and pay special attention to their disclaimers and “small print”. Don’t become a victim of some online loan shark.