What is early retirement?
In contrast to the regular old-age pension, which comes into play when the statutory age limit is reached and is intended to secure a livelihood after leaving the working life, the early pension is an early pension option if the employee cannot work until the age limit is reached due to health reasons. Here you will find pension models such as disability pension or disability pension. However, those who retire early do not receive the full pension rate, but deductions are made.
Income and age are important for early retirement loans
Early retirement cannot be classified according to a certain age. Young people are already on early retirement because they are no longer available on the labor market. For banks and financial institutions, the granting of loans to this target group therefore depends on the main factors of pension amount and age. The amount of the early pension is based on the earned income and this can vary greatly depending on the job profile, qualifications and payments into the pension fund. The age and reason for early retirement are also factors that play an important role in terms of the term of the loan for early retirees.
Loan offer for early retirees
Loans for early retirees are not part of the standard portfolio in banks’ loan offerings. The interested party must therefore inquire with the preferred bank whether they can take out a loan based on their requirements. Here, creditworthiness, pension amount and life expectancy decide on the grant. If the amount of the pension or life expectancy is rather low, there are still opportunities if collateral such as your own house or other valuables is to be used or a guarantor for the loan can be found. A loan for early retirees with poor creditworthiness has no prospect of success from the outset.
Few direct banks offer installment loans for pensioners, but they are geared towards short terms. The interest rate varies depending on the creditworthiness, often the payment of installments is required by taking out insurance. A comparison of the providers is worthwhile, because criteria such as early loan repayment, the suspension of installment payments or special repayments and loan contract fees are also important for the decision.
Offers that promise a loan for early retirees without private credit checker can be pitfalls, because it is not uncommon for the supposed relief to hide much less favorable conditions that make life difficult.