Transfer of the fifth for retirees
All workers who are now retired can also apply for and benefit from loans for retirees. Loans for this category of people often ensure more advantageous conditions than loans for employees, also thanks to the agreements between social security institutions and banks.
More and more pensioners are requesting financing to cover the most varied expenses, as a result many banks and financial institutions are gearing up to be able to meet the liquidity needs of this category of people.
The types of loans for pensioners are the transfer of the fifth of the pension and the Social Security loans ex Government Agency
The assignment of the fifth of the pension
Among the most common types of loans for pensioners there is the assignment of the fifth of the pension, a particular form of financing which provides that the loan installment is retained on the monthly pension slip. Furthermore, it cannot exceed one fifth (20%) of the net pension. Loans for pensioners with assignment of the fifth are regulated by article 13-bis of the law of 14 May 2004 of the Ministry of Economy and Finance, published on 8 February 2007.
Compared to the transfer of the fifth of the workers’ salary, the conditions required by the banks to grant a loan with the transfer of the fifth to the pensioners are somewhat less flexible.
The major aspect that influences the granting of the loan with assignment of the fifth is certainly the age of the applicant. In that, if it is very advanced it could constitute a greater risk of insolvency for the bank. Despite this, the age limits for retired loans are not rigid and vary from one institution to another. Some banks set 75 as the limit, but others set it at 80 and beyond.
Social Security EX Government Agency loans
Another popular alternative is Government Agency loans for retirees. These loans are governed by very strict acceptance criteria, but offer significant advantages both as regards interest rates and for further facilitations connected to them.
In addition, these loans are granted with some ease by the lenders, since the pension is considered as a safe income. In order to no longer be perceived, Social Security should fail.
Government Agency loans are loans at subsidized rates for pensioners. In these two cases, the pensioner asks for a loan from the credit institution, but it is Government Agency or Social Security to pay the installments, withholding them directly from the pension slip. Thanks to agreements with social security institutions with banks, pensioners thus benefit from favorable interest rates. Loans for Government Agency pensioners are granted quickly and the amount must be repaid in 60 or 120 installments.
In order to request the transfer of the fifth Government Agency, the pensioner must be:
- be registered in the autonomous unitary management of credit and social services, the fund through which Government Agency draws to provide loans;
- have at least 4 years of contributions ;
- not to be over 80 (the age varies from bank to bank).
These financial products are usually accompanied by an insurance policy which guarantees the bank in the event that the pensioner dies. These insurances cover the amount that remains to be paid in the event of the applicant’s premature death.
How to apply for loans for retirees
Once the pensioner has chosen the type of financing that most satisfies him, he must contact the credit institution via the Internet or go to the nearest branch.
The required documents are the following:
- identity card;
- fiscal Code;
- pension slip;
- statement of the last 6 months (this is only required in some cases but it is good to have it with you).
Once the loan application for pensioners has been made, it is necessary to wait for the bank to communicate the outcome. If this is positive, after a few days the money will be credited directly to your account. If it is negative, it will be necessary to evaluate and understand with an employee if it is better to choose another credit institution or if it is appropriate to review the application.
In principle, when an official gives the green light and forwards the application for funding to 90%, it is accepted because it reflects the parameters imposed by management.
An interesting solution that allows to reduce waiting times and times is to request products directly online. Thanks to the online financing, banks and financial companies manage to manage their practices with shorter timescales and lower costs than those requested at the branch.
In addition, one of the most important advantages of loans for retirees is that it can also be paid to those who have problems of protest or reporting in database.