To cope with an unexpected event, to change cars, to help a family member, to meet medical costs or to satisfy a personal desire: there are so many reasons to ask for a loan, for all ages. Those who receive an old-age pension can apply for a loan for pensioners: this is a type of financing that often, thanks to special agreements between banks and social security institutions, guarantees more advantageous conditions than loans for employees.
Almost all categories of pensioners can apply for a loan: private sector pensioners, public sector pensioners and state pensioners, all those who receive a retirement pension, granted to workers who have reached all pension requirements. This should not be confused with the survivor’s pension, which is due to the spouse or children of the deceased pensioner, and with the disability pension, which is perceived by employees with a physical or mental disability.
It is an important distinction, since civil disability pensions, social pensions, joint pensions, retirement assistance or income support checks generally cannot be used to apply for a loan for pensioners.
Loans for pensioners with a pension assignment of one fifth
There are different types of loan for retirees ; one of the most widespread is the one that provides for the transfer of the fifth of the pension. In this case the installment to repay the loan cannot exceed one fifth of the net pension, considering however that the difference between the installment and the net of the pension cannot be less than the so-called minimum pension, which for 2016 is set at 501.89 EUR. This form of loan for pensioners provides for the loan repayment installments to be withheld directly from the applicant’s net pension by the pension institution, which then pays the monthly payment on behalf of the pensioner. In this way the risks of disruptions in payment or forgetfulness are eliminated.
Loans for pensioners with a salary assignment are regulated by article 13-bis of the law of May 14, 2014 of the Ministry of the Economy and Finance, published on February 8, 2007, but the conditions of loans with salary-backed loans vary depending on the credit institution that provides it and the age of the pensioner; also the age limits of the applicant are usually not rigid, although obviously at a later age than the pensioner there is a greater risk for the bank: some credit institutions set this age limit at 75, while others even reach 80 years and beyond.
Government Agency loans for pensioners
Despite the fact that the Government Agency, that is the institution that dealt with pensions and social security for workers in the public and state sector, was closed in 2011, it is still common to talk about Government Agency loans for pensioners, which are opposed to Social Institute loans., intended instead for former workers of private sector companies. Currently the Government Agency functions have been transferred to the Social Institute, which therefore represents the reference point for all the former Government Agency subscribers.
To be able to apply for an Government Agency loan, which usually offers favorable terms and particularly convenient interest rates, you must first be registered with the Public Employee Management and, usually, be younger than 75 at the time of payment of the last installment. The loan can be requested from banks and financial institutions, but the Government Agency (or, better said, the Social Institute) will pay the repayment installments by holding them directly from the applicant’s pension.
Three offers can be distinguished:
- Small Government Agency loans, useful for dealing with small expenses or to use for daily needs. The sum paid varies according to the profile of the applicant and the duration of the loan, which goes from one to four years. In this case no expense documentation is required.
- Direct multi-year Government Agency loans, to be used for personal or family needs; in this case the expenses must be documented.
- Guaranteed multi-year Government Agency loans, in which the social security institution protects itself in the event of the death of the applicant, termination of the service without entitlement to a pension and a reduction in salary.
Social Institute loans for pensioners
Social Institute loans for pensioners are different from Government Agency loans because they are aimed at former workers of private sector companies, both small and large.
Also in this case, these are loans to pensioners who enjoy particularly favorable conditions and subsidized rates thanks to specific agreements between the social security institution and banks and finance companies.
The repayment of the installments takes place through the sale of the fifth of the pension, a method that allows access to financing also to bad payers or to people who have been protested; the duration of the loan, in any case, cannot exceed ten years and there is also a mandatory insurance cover in the event of the death of the applicant.
To obtain an Social Institute loan for pensioners with a salary assignment, it is first necessary to request the transferability of the pension, a document which also indicates the maximum amount of the loan repayment installment. This amount obviously depends on the size of the pension and is calculated net of tax and social security deductions.
Loans for disabled pensioners
Sometimes the receipt of a disability pension can constitute an obstacle in the request for a loan because it cannot be attacked in case of insolvency of the applicant.
By itself, however, the condition of disability does not preclude access to a loan, especially if the applicant has already repaid any other loans, respects the maximum age limit established by the bank or the financial company and, above all, proves to have a monthly income continuous and sufficient to meet the installment without compromising one’s standard of living.
Among the various documents to present for the granting of a loan to an invalid pensioner there is also the medical documentation that attests the invalidating conditions of the applicant and that will be evaluated not by the bank, but by the insurance company that will take the risk of entering into a life insurance.
Usually a loan of this kind is refused if the applicant’s pathology is deemed to cause death in the short term or if the disability pension is small. It should also be considered that, in the event of insolvency, the institution providing the loan cannot repay the disability pension.
Loans for retirees over 90 years old
There are cases where age is an obstacle to obtaining a loan for pensioners. The Social Institute, however, grants personal loans up to 90 years thanks to the sale of the fifth Social Institute.
The requirements are a net monthly pension of not less than 443.12 euros and a registry age not exceeding 90 years. It is also necessary to take out a life insurance policy which, in addition to protecting the applicant’s relatives and heirs, allows the institution providing the loan to repay the premium paid by the insurance agency for compensation for the residual capital due: it is precisely thanks to this guarantee that a loan for pensioners is granted up to 90 years without the need for additional capital guarantees and without ownership of a property or other assets of equal or greater value than the amount obtained thanks to the loan.