Personal loans to pensioners are an increasingly tangible reality of the Italian credit market, with banks and financial companies offering the opportunity for those who have left the world of work to obtain a sum of money in order to meet their needs personal or family, being able to take advantage of special agreements with social security institutions that bring in interest rates more advantageous than those of “normal” personal loans. The formula used by credit institutions to provide personal loans for retirees is that of the transfer of the fifth : let’s see together in detail everything about this type of financing and possible alternative routes.
- Personal loans to retirees with assignment of the fifth
- The advantages
- Who can not access the assignment of the fifth
- Documentation and conditions
- Is insurance mandatory?
- Is there an age limit?
- Loans to protested pensioners who are bad payers
- Loans for pensioners with a minimum pension
- Loans to pensioners with disability
- Solutions with guarantor
- Retired loans with proxy
- What is the alternative to the sale of the fifth?
Personal loans to retirees with assignment of the fifth
The pensioner who turns to a bank or finance company to apply for a loan can obtain a personal loan through INPS with the assignment of the fifth social security allowance: this means that
the monthly repayment of the capital provided is made through a deduction of the monthly amount received which can not exceed one fifth of the total amount , or 20 percent of total income, directly on the current account.
Personal loans to retirees with assignment of the fifth have a number of advantages and also some disadvantages: let’s see what they are.
The advantages of a loan to pensioners with a transfer of the fifth can be summarized in these points:
- High probability of obtaining the loan
- Easy access to credit
- Fixed interest rate and fixed rate
- Loan duration up to 10 years with repayment plans in 120 monthly installments
- No brokerage fees
- Automatic payment through retention on the pension, without having to remember the deadlines and incur the risk of oversights
- Possibility of granting for those who have had past difficulties in accessing credit, a report on the list of bad payers or received foreclosures or complaints
- No motivation for which funding is requested
- No mortgages or collateral requests
- No need for a guarantor
- Possibility of renewal or request of the transfer even in the presence of other loans in progress
- Possibility of early repayment of the debt
- Protection of insurance against premature death and loss of work
Who can not access the assignment of the fifth
Among the advantages indicated, we indicated the ease of access to credit, but this is true only for pensioners who have sufficient income to be able to pay the deduction of the fifth pension benefit. In fact the current legislation is very precise in establishing that
the pension received by the pensioner after deduction of 20% of the amount foreseen in the amortization plan must never fall below a certain threshold, the minimum survival threshold set each year by the State.
This limit, set at around € 500, has been set up to prevent the pensioner from becoming overburdened by not being able to cope with daily needs. Therefore it follows that those who receive the minimum pension or the only invalidity can not access a loan with a transfer of the fifth , and will have to resort to other financial alternatives.
Documentation and conditions
To request personal loans for retired persons, you must present a copy of your ID, tax code and pension slip to the credit institution to certify your income: depending on the individual case it is possible that the financial institution requires additional documentation, before giving the start of the evaluation process which will then lead to the payment of the requested capital. The conditions for loans to retired persons with the transfer of the fifth envisage
a maximum amount that can usually be set at 50 thousand euro , and the total duration of the loan must be between 24 and 120 months, but in any case subject to the applicant’s personal data. The interest rate applied to the loan is always fixed, in order to keep the installment constant throughout the repayment period, and is usually lower than the average applied for normal personal loans. The loan also includes the signing of a life insurance policy.
Foreign citizens , both EU and non-EU citizens , can also obtain a retired loan with a fifth assignment, but in addition to the standard documentation, a permanent residence permit or a certificate attesting residence in Italy for at least 5 years is also required.
Is insurance mandatory?
Next to the amortization plan with the assignment of the fifth, credit institutions that provide personal loans to retirees have their clients sign a mandatory life insurance policy at the time of signing the contract. This insurance represents
a double protection, both for the bank, which obtains sufficient guarantee for the capital provided, but also for the pensioner, who in the event of early death sees the debt pay off without it falling on the heirs.
Life insurance undoubtedly involves a greater disbursement for the customer, but thanks to the agreement signed between Inps and the banks, the interest rates applied to the entire loan remain very affordable.
Is there an age limit?
In spite of those proposing retirement loans without age limit it must be said that most of the credit institutes operating in the sector tend to give their assent to the funding to subjects who are up to 75 years of age. However, there are also exceptions on the registry variable, which however modify the basic conditions of the loan: first of all
the interest rate is higher than the one granted with the assignment of the fifth, therefore it may be economically less advantageous, furthermore in addition to the standard documentation a medical certificate is required in which the good health of the applicant is attested , before giving the go-ahead for the loan application.
However, we remind you that not all credit institutions are willing to grant loans to pensioners over the age of 75 , so it is necessary to consult several banks to obtain estimates and assess the overall economic impact of the operation, as the rate for reimbursement as we said higher.
Loans to protested pensioners who are bad payers
Is it possible to get loans for retirees who ended up on the list of bad payers, protestors and foreclosures? Usually these subjects have difficulty in returning to the credit market, in particular those who have paid one or more installments of a loan late , when they are reported to Crif, for a certain period of time they can be refused a loan request even if they can satisfy the normal conditions required by a bank: remember that the so-called protestants are registered in the Register of Protests of the Chamber of Commerce , where they remain reported for 5 years, and only after the first year, only if the debt was paid, it is possible to request cancellation from the Register. Luckily
the guarantee of the assignment of the fifth pension allowance is sufficient protection to allow lenders to provide loans to protested pensioners and bad payers, it is enough to have a sufficient income that allows for the transfer of the fifth.
Loans for pensioners with a minimum pension
The provision of loans to retirees with the transfer of one-fifth by financial corporations and lending institutions makes it impossible to grant loans to social pensioners or with a minimum pension . For the year 2017 the minimum survival threshold set by the State is equal to 501.89 euros per month, 6.524.57 euros per year: this means that
loans with a minimum pension or social allowance can not fall below the threshold mentioned when the amount payable to the institute in the form of a transfer of the fifth to pay the loan is deducted from the amount received monthly.
In the case of a pension equal to the minimum amount of survival, since it is not possible to obtain a loan by assignment of the fifth, it is necessary to find alternative ways, for example the mortgage loan, which will be discussed extensively in the last chapter.
Loans to pensioners with disability
Are loans to pensioners possible with disability ? It should be noted immediately that civil disability is not generally considered by credit institutions as a discriminating condition for the provision of a personal loan, however it is likely that the bank requires specific documentation about the type of disease from which it is affected. , in addition to the one that certifies the economic possibilities available to the applicant, during the assessment phase of the financing application. Among the requirements to provide loans to pensioners with disabilities ,
It is therefore sufficient, in addition to not exceeding the maximum age limit, that the perceived social security is able to guarantee the reimbursement of the monthly payment, but if the disabling pathology is characterized by a high probability of death, it could represent a obstacle to the request for funding, pushing the bank to a denial despite sufficient income.
The medical documentation will have to be evaluated by the insurance company that will stipulate the consequent life insurance linked to the loan: the refusal to the loan application could be motivated by the certification of a pathology with probability of death too high, or a disability pension too small or too insecure, ie that it may be subject to suspension or cancellation.
Solutions with guarantor
An alternative route for those who seek funding but do not have all the necessary requirements is represented by retired loans with guarantor , where a third person takes on the necessary guarantees required by the credit institution or financial institution to provide the required capital. The guarantor of the loan
assumes responsibility for any unpaid installments by the borrower: this third party must prove its creditworthiness and in turn must not have been reported as a bad payer.
Retired loans with proxy
Retired pension loans are possible? First of all, remember what the payment proxy is, also called
transfer of double the fifth of the salary , that is a financing formula that provides for an increase in the amount withheld from the normal transfer of the fifth, therefore the amount withdrawn every month from the beneficiary’s retirement allowance for the extinction of the debt will be equal to a maximum two-fifths out of the total , 40 percent instead of 20 in the normal fifth.
Having already seen the normal difficulty that can arise with the normal assignment of the fifth, it is clear that the procedure for requesting a retired loan by proxy becomes more complicated, and not only because the government, to avoid the over-indebtedness of a person or family, which perhaps underestimates the impact of a loan in their daily lives, sets a sufficient minimum amount which can not be disregarded, whether it be the salary or in our case of interest in the pension allowance, but also because many banks per se reject the possibility of granting loans by proxy. However
if you have a good social security period you can also get a loan for pensioners with double-fifth of the pension, but tend to be recommended only if you have to request large amounts, which can generally be paid in installments up to 120 months.
To submit the application with the relevant loan procedure by proxy, you must first contact your pension institution , requesting authorization to open the file: when the go-ahead is granted, the proxy must then be handed over to the finance company or institute credit, provided that it has loans with a double-fifth transfer in its product portfolio.
What is the alternative to the sale of the fifth?
For those who can not access the loan by assignment of the fifth there is a possible alternative route, which is the bank loan , or mortgage loan: this loan is open to
all those who are over 60 years old and own a property, being able to obtain large sums of up to 350 thousand euros. To apply for a mortgage loan, you must present a tax code, a copy of your identity document, a family status, a contextual certificate, a preliminary notary report or a deed of provenance, and an appraisal of the property. After a preliminary feasibility opinion, a technical assessment of the property will be carried out, aimed at obtaining an estimate of the real value of the house, which is then necessary to provide the capital.
The bank life loan leaves the property of the property to the pensioner , and the subscriber has the right to decide whether to repay his debt gradually , or to leave the burden of extinguishing his debt to the heirs, who can provide for themselves or leave that the bank puts the property on the market to obtain the balance of the debt.