How to Get a Loan When You’re Retired

You’re finally at the age where it’s acceptable to retire from your job and enjoy all of your hard-earned money you’ve made over the years. Many retired people believe that they cannot take out any loans once they’ve retired. Although this can occasionally be the case, it doesn’t mean that it’s impossible to take out a loan. These loans will typically be either secured or unsecured. Getting a loan when you’re retired is a great way to manage your cash and help you to pay off any debt you’re unable to pay off with your current financial situation. We will talk about how to take out loans, mainly personal loans, when you’re retired.

Photo by Pixabay on

Pay off Debt Before Retirement

Before we dive into taking out loans, first things first – if you’re about to retire and are currently swarming in a debt you can’t seem to pay off, you need to make sure you change your spending habits to be able to pay off the debt before you even retire. Unfortunately, if you have a savings account, your debt will strain this once you retire since you’ll need to use your savings to pay off the debt. It’s important to invest in your future so you’re not left with a ton of debt.

Interest payments will also accumulate over time, which may put you into even more debt. According to Investopedia, “If it’s a choice between paying 3% in mortgage interest (which may be tax deductible if you itemize) and saving more for retirement, the latter is probably the smarter option, unless you have a poor investing track record.”

One of the best ways to start paying off debt is to stay on top of your credit card payments and to stop spending superfluously. If you can, cut back on things like dining out and shopping every week to try and save money to help pay off your debt.

Once you’re retired, there are going to be expenses like home repair, car payments, and even children and grandchildren. If you’re suddenly stressing about how to make ends meet while you’re retired, then take a look at some of the different types of loans you can take out when you’re retired.

Photo by Alexander Mils on

Secured Loans

There are several types of secured loans you can take out when you’re retired. By taking out a Home Equity Loan, which is similar to a second mortgage, you’re using your own home as collateral should you not be able to pay off the debt. You can also opt for a Reverse Mortgage Loan, which will give you an income based on the value of your home. It won’t be paid off until the homeowner passes away or moves out, where it’s then paid off by selling the home.

A car loan is also a type of secured loan because it’s secured by the car. Loaners are more likely to approve of a car loan because of this. You can always sell the car if you need emergency funds before tapping into any retirement savings accounts you have.

Lenders are more likely to approve of a secured loan because it’s covered with collateral.


Unsecured loans are a bit trickier to come by when you’re a retiree. Unlike secured loans, unsecured loans don’t have any valuable assets at risk if you can’t pay back the loan. This is why loaners are less likely to give you an unsecured loan.

One type of unsecured loan you can take out is a Debt Consolidation Loan. By taking out a Debt Consolidation Loan, you refinance any existing debt you may have accumulated. You’ll make regular payments to your debt in order to pay it off. While it’s advised against, you could get also a Payday Loan; however, the interest rates in Payday loans increase quickly and steeply, so only get a Payday loan if you’re sure you can pay it off very quickly.

Other Ways to Get a Loan

There are other aspects that loaners look at when they approve you for a loan. If you have a part time job, receive a Social Security paycheck, or receive retirement benefits, this will increase your chances of receiving a loan. There are a number of ways in which you can help increase your chances.

Self-Funded Retiree

You’re considered a self-funded retiree if you sustain yourself through your own funds. This can be through investments or a savings account. Your lender will approve of your loan if you can show them your income and that you have enough saved to pay a loan off.

Part-Time Retiree

If you have a part time job, this will also increase your chances of getting a loan. This is a source of income, even if it may be less than your previous job. Make sure you check all of the requirements of a part-time retirement job before applying for your loan.

Navy Federal Credit Union

If you’re a retired veteran, then you’re in luck. The Navy Federal Credit Union caters to veterans with increased chances of getting a personal loan. Your spouse might also be eligible for a personal loan. Make sure you contact your local VA so you can find out your options and if you qualify to receive a loan from the Navy Federal Credit Union.

It’s always better to see if you can get approved for a loan before you touch your retirement savings or 401k. It’s important to keep those accounts intact so you’re never left in a stressful situation where you don’t have any more savings. By applying for a secured or unsecured loan, you’ll be able to pay off any outstanding debt you may have accumulated over the years. Additionally, as a self-funded retiree, part-time retiree, or retired veteran, you’ll increase your chances of getting a loan because you have the assets or income to show a lender that you can pay off the loan.

These are some of the best ways to get a loan when you’re retired. Before you even retire, it’s a good idea to try and pay off any outstanding debt so you’re not left looking for a loan in the first place! Once you slowly start to pay off your debt before you retire, you’ll set yourself up for financial stability once that day comes around, so you never have to worry about getting approval for a loan. Worst comes to worst, there are ways to get a loan, so always keep in mind the different types of loans you can take out as a retiree.


Investopedia. “9 Signs You Are Not Financially OK to Retire”

Finder. “Compare Loans for Retired People”

Show More

Related Articles

Back to top button