Pensioners are somewhat left-behind by lending companies. Pensioner's age and the limited income all form the liability and higher risk for financial institutions to offer pension loans in Australia.
Therefore, most loans for pensioners in Australia are short term and in small amounts. In addition, there are state laws, which protect pensioners from unrealistic loans with high securities.
In the past it was not uncommon to scam elderly person with $10K loan. Often the house of the pensioner would serve as the loan security. The $10K loan was often impossible to pay off. Thus, the high value security was an easy gain for the lenders.
Today, the law states that in most cases a pensioner can borrow maximum of $500. The condition also states that the loan term is no more than 90 days. There are exceptions to the rule. State Governments have additional laws to regulate the loan for pensioners.
There are about 5 types of loans for pensioners in Australia. Generally, the loans are up to $500 for each elderly applicant. Examples of pension loans in Australia are:
Generally, pension loans in Australia are at low fixed rate. In most cases there is an automatic debit from the saving account. This way there is a higher chance to repay the loan with least penalties and fees.
Even though there is a lot of political correctness about age discrimination, older people are a liability for lenders. Anyone, above 70 is considered a high risk applicant.
Another criteria is a loan serviceability. In other words: do you have a financial capacity to repay the loan?
Security for the loan is extremely important. Do you have assets to secure the loan? Finally, the fees and charges also need the consideration. In most cases $500 loan should not carry any additional costs other then the interest.
However, lender may insist on loan insurance for pension loans in Australia. In this case, carefully consider if the loan is indeed needed.
Banks, generally, do not provide loans for pensioners. However, there are lenders who do specialise in pension loans.
Australian Debt Reduction and Loans Australia provide a quick and easy access to the loan. The funding is under $500 and the interest is low.
Quick and Easy is another company with pension loans in Australia expertise. However, this lender claims to offer pensioner loans for up to $5000.
This is odd because the advertised amount would legally require 10 pensioners to borrow money for the same "Kawasaki Motorbike". One could wonder, how all of these elderly gentlemen would fit on it??? Thus, do not be afraid to ask questions. If you are in doubt then look for other lenders.