Can I get a loan if I’m retired?

Lenders can’t discriminate against you based on age, but your income will play a large role in whether you’re accepted and how much you can borrow. With no salary coming in, you may find it difficult to get approved for a loan, or you may face shorter terms and higher interest rates, to offset the risk to the lender.

7 min read
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What can you use a loan for? 

A loan can be used for almost anything your like (as long as it’s not illegal or gambling), including:

  • consolidating existing debt, so you just have one monthly repayment
  • funding an emergency cost, like fixing a car or roof repairs
  • paying for house improvements, like a new kitchen or bathroom

Am I eligible for a loan? 

Each lender uses their own criteria, so you may be eligible for some personal loans but not others. Eligibility also depends on your individual circumstances and factors such as a: 

  • sufficient and consistent income– the lender needs to know you can afford the monthly loan repayments, so they’ll want evidence of your income. It’s important not to underestimate your outgoings, otherwise you could end up with a loan you can’t afford
  • good credit score and payment record– this shows the lender that you’ve been good with money in the past and are likely to make your repayments on time and in full in the future
  • you fit within the lender’s age restrictions– they need to make sure you’re likely to finish paying off the loan in your lifetime. Make sure you check this before you apply to reduce the risk of rejection (which can impact your credit score)

While lenders aren’t allowed to discriminate based on age, there may be a maximum age limit in place for when you apply for the loan – and for when the loan term ends (typically around 70-75 years old).

This is to stop people taking out finance with repayments that last far longer than their expected life span.

Tip: Check your credit score and fix any mistakes on your report before you apply, to make sure it’s in the best shape possible.

How long should I take a loan out for? 

With short-term loans, you pay back the money you borrowed in monthly instalments – but over a short period. This could be a good option if you want to keep your interest to a minimum and clear the balance as quickly as possible.

The other option is to spread the cost over a longer timeframe, to reduce your monthly loan repayments. This can make it easier to budget each month, however, you will end up paying more interest overall.

How to get a loan when retired  

Follow the four steps below in order to get a loan if you’re retired. Just remember that you need to be able to afford the repayments, so only borrow what you need. It’s a good idea to also give yourself some wiggle room in case your finances change in the future.

1. Research different personal loans 

The first step is to research different loan options. You can go direct to a well-known bank or building society by looking on their website or going into your local branch. Comparison websites have tools that can search different deals based on your criteria and give you a side-by-side comparison.

If you’re worried about choosing a loan, it might be a good idea to use a broker. They are experts in loans and will be able to advise you on which products you’re eligible for as well as which ones are most suitable for you.

Just be aware that brokers usually charge a fee and some brokers are tied to individual lenders and can’t search the whole market for you. So it may be worth doing a bit of your own research too, using a variety of methods, to ensure you make the best financial deal.

2. Use an eligibility checker 

When you’ve found a deal you like, use an eligibility checker to see if you’re likely to be accepted before applying.

If you apply for multiple loans in a short space of time, your credit score could decrease – making it harder for you to get a loan. However, eligibility checkers search your credit history without leaving a footprint. So you can check the likelihood of approval without damaging your credit score.

3. Make a loan application 

Once you’ve checked your eligibility, apply for a loan. You’ll need to provide personal and financial information as part of the application process, such as your address history. Remember each application leaves a footprint on your credit report for lenders to see. But as long as you don’t apply for lots of loans in a short space of time, it’s unlikely to make a noticeable difference to your credit score.

4. Receive the funds if you’re approved 

If you’re approved for a loan, you then wait to receive the funds. Timescales can vary between lenders, so ask the lender how long it will take before you apply if you need the cash quickly. It’s worth noting that personal loans tend to take less time than secured loans because they are generally for smaller amounts of money, so there’s less paperwork involved.

What are the alternatives to a personal loan? 

There are several alternatives to a personal loan, including a credit card, secured loan, credit union loan or remortgaging, for example. You may wish to compare these options to see which one suits your situation best.

Your eligibility for these options will depend on how much you want to borrow, how long for and the lending criteria set by the lender. Again, age restrictions may apply.

1. Credit card 

If you’re looking to borrow a small amount over the short term, you may consider getting a credit card. You should be able to get one if you’re retired, as long as you can afford to keep up with the repayments. Like a loan, each credit card provider uses their own criteria and will take your individual circumstances into account.

Depending on your eligibility, you may be able to get a credit card with an 0% introductory rate. If you pay off the balance during the set offer period (usually around 6 months), you won’t be charged any interest. Just remember you could be hit with a very high interest rate after the introductory period ends, so it’s best to clear the balance in good time.

2. Credit union loan

A credit union is a non-profit organisation that allows members to pool their money together and borrow at reasonable rates. They could be a good option if you’re looking for a small unsecured loan. However, they can be tricky to join; you need something in common with the other members, like a shared profession or location.

3. Secured loan 

If you still have an outstanding balance on your mortgage with some equity in your property, then you may be eligible for a secured loan. These tend to be for larger sums of cash than personal loans, starting around £15,000 and over. Just remember not to borrow more than you need, or you could end up in financial difficulty.

The main difference is that you need to use as asset such as your home as collateral. This gives the lender comfort that they can sell your house to claw back funds, if you fall behind on your repayments (in the worst case scenario).

4. Remortgage

If you are a homeowner and you’ve paid off your mortgage in full (i.e. your property is ‘unemcumbered’), you could go down the remortgage route. Getting a secured loan is not possible if you have no mortgage left to pay.

The risk to the lender is quite low, so you may be able to take out a new mortgage on your property quite easily. The main barrier to getting approved could be age, as each mortgage provider will set their own upper age limits for when you take out a mortgage - and for when the mortgage term ends (typically around 70-85 years old). You’d need to check with the lender, as each one follows their own guidelines.

Can I get a budgeting loan on state pension? 

Budgeting loans are there to help people on benefits who are struggling to meet smaller costs. You may be eligible for a budgeting loan while on a state pension if you meet all the requirements, which includes (but isn’t limited to) receiving pension credit for the previous six months.


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We're a credit broker not a lender. Homeowner loans are secured against your home.

Disclaimer: All information and links are correct at the time of publishing.

Adele Kitchen, Personal Finance Writer

Adele Kitchen

Personal Finance Writer

Adele is a personal finance writer with more than 10 years in the finance industry behind her. She writes clear and engaging guides on all things loans for Ocean, as well as contributing blogs to help people understand their options when it comes to money.