Can I get a loan if I'm retired or over 60?

Key takeaways

• If you have a regular income and a good credit score, you can access some of the best loans

• Most lenders impose a maximum age limit for personal loans and lending beyond 80 is rare

• If you want to borrow money, lenders will look at your income, living costs and credit history to determine affordability and risk

Can I get a loan if I'm a pensioner?

Yes it is possible to get a personal loan if you’re retired and on a pension. However, it will depend on your credit history, your regular income, and the type of loan you’re applying for, different lenders will have their own eligibility criteria and policies.

Some may not want to lend to older borrowers, particularly for long-term loans, due to the higher risk the borrower might die, compared with a younger borrower. A shorter loan amount or loan term might be offered if a provider thinks you are a higher risk of not making all of the repayments.

How much can I borrow as a pensioner?

How much you can borrow as a pensioner will depend on the following factors:

• Your age

• Your regularly bills and outgoings

• Any regular income you have

• Your credit score

• Any financial dependents you may have

• The type of loan you’re applying for

The higher your credit score, the better loan deals and interest rates you’ll be offered – and if you have a large pension income you’ll be able to borrow a bigger loan. But remember, never borrow more than you need and always be sure you can afford the repayments.

Is there a maximum age limit on personal loans?

Most lenders have a maximum age limit on their personal loans. For example, some providers may state that you must be no more than 70 by the end of the loan.

Others will lend to borrowers up to the age of 80 – but with mainstream lenders, beyond this age is rare. Lenders also tend to have a minimum pension income requirement to be eligible for their loans, to ensure you can afford the monthly payments.

While it is not impossible for older borrowers to get a loan, it may be more difficult and there may be less choice. You might be offered a loan with a shorter term, for example, or one with higher repayments.

This highlights the need to shop around and find deals from a range of providers – as different lenders will have their own lending criteria.

What information will I need to give a lender?

Lenders will look at the following when deciding whether to lend to you, how much they will let you borrow, and the interest rate they will charge:

• Your pension income (work pensions, private pensions and the State Pension)

• Rental income from investment property

• The reason for the loan, such as for home improvements or to help family members

• Any income from part time jobs or a side hustle

• Your usual outgoings

• Your credit score

When you make a formal loan application the lender will carry out a ‘hard’ credit check to view your credit history. This check will be visible to other lenders.

The lender may also want to know what you plan to use the loan for.

When you search for a loan with MoneySuperMarket we use a ‘soft’ credit search. This means we can show you loans you may be eligible for and your chances of getting them without affecting your credit score.

What happens to my loan if I die?

If you die and your loan has not been repaid the debt will still need to be paid off. Usually the money is taken from your estate (your total cash and assets). If it is a joint loan the other loan holder must continue to pay the debt and remains liable for the repayments of the loan.

What type of loan can I get in later life?

There’s a broad range of loan types available from mainstream and specialist lenders. Lenders will have their own application process and eligibility criteria, upper age limits and minimum income requirements. But older borrowers could consider are the following loans:

Should I get a loan if I'm a pensioner?

CJust because you are retired, there’s no reason why you shouldn’t get a loan if you can comfortably afford to repay it, but it all depends on your personal and financial situation.

But first, consider what the loan is for and if there might be an alternative – and less costly - way to get the money, either by saving up or asking family members to help out.

If you decide to apply for a loan the lender will conduct an affordability assessment, taking into account your living costs, and a credit check. It is a good idea to get a free copy of your credit file before you apply – and see if you can take any steps to bolster it and improve your chances of being accepted.

You should also check what benefits you may be entitled to when you stop working, such as Pension Credit in some cases. These can provide a boost to your income and help with the cost of expenses such as energy bills.

Also consider how manageable the monthly repayments will be – looking at your income, outgoings and monthly budget. Our loan calculator can help you work out how much you might be able to afford to borrow.

What are the pros and cons of a loan in retirement?

There are a several reasons why you might borrow a loan as a pensioner, but there are also some risks to consider:

Advantages  

• Provides a short-term injection of cash to pay for a holiday, home improvements, car repairs or a new boiler, for example – where it would take too long to save up

• Repay in fixed monthly instalments so budgeting is easier

• No ability to extend the line of credit or borrow more, removing the risk of falling deeper into debt (as could happen with a credit card)

Disadvantages 

• Borrowing will cost more than saving up or using cash savings, because a loan will have added interest

• Debt and charges could build up and credit score is damaged if you miss repayments

• The remaining loan amount will be taken out of your total estate if you die – reducing the amount you can pass on to beneficiaries

• You may be charged higher interest rates if a lender thinks you’re at a higher risk of not making repayments

Can I get a mortgage if I'm over 60?

It can be harder to be accepted for a new mortgage - or to extend the length of your home loan by remortgaging – once you’re over the age of 60, but it is not impossible. Many lenders will have an upper age limit for mortgages as a key part of their eligibility criteria. If the upper age limit is 75 and you are 62, for example, you’ll have to commit to clearing the mortgage in 13 years. This could mean higher interest rates and larger monthly repayments.

Some lenders don’t have an upper age limit for mortgages, but all providers will want to ensure the mortgage is affordable and will conduct a full financial check and credit check before advancing a loan.

Can I borrow against my pension?

A pension loan is a way of borrowing money against the value of assets in a pension fund – so effectively it’s similar to a secured loan. Specialist companies offer these sorts of loans, but there are many pitfalls and costs involved so it’s important to do your research, and ideally get independent financial advice.

As an older person can I get a loan if I have bad credit?

It is likely to be more difficult to get a personal loan as a pensioner if you have bad credit, but it is not impossible.

There are specialist lenders who can offer loans to borrowers who have struggled with debts in the past and have a low credit score.

Searching for loans with us won’t affect your credit score – as we use a ‘soft’ credit search. Get a copy of your credit file and make sure there are no errors that could be affecting your credit score. You can also see if there are any steps you can take to improve your score.

What are the alternatives to loans for pensioners?

Depending on how much money you need and what it is for there may be more suitable alternatives than a loan. Each will have its own risk and costs and here are some of the options to consider:

• Equity release

• Downsizing, if you own your own home

• An authorised overdraft on your bank account

• A credit card

• A credit union loan

Rebecca Goodman
Personal Finance & Insurance Expert

Our expert says...

“People are working for longer now and many are not ready to retire by the time they reach their 60s, opting to carry on working or to go part-time instead. But when you do stop full-time work, you can expect your income to drop, and this means if you apply for credit it may be harder than it was when you were working. This is why it’s crucial to compare loans and to shop around to find the best deal for your needs.”

Compare loans with MoneySuperMarket

It’s easy to compare loans with us. Just enter a few details such as how much you want to borrow and over what time frame, and we’ll show you deals from across the market.  

Our eligibility checker tool also means we can also show you your chances of being accepted before you apply – that way you’ll know where you stand. And searching won’t affect your credit score. 

MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.

More loan guides

• How do I get a loan?

• What is an unsecured loan?

• What are the different types of loans?

• Secured vs unsecured loans