Are you a retiree and have opened multiple personal loans in the past, and are you having difficulty repaying them today? No problem, banks and financial institutions offer a solution called debt consolidation and which guarantees greater agility and simplicity to repay these loans.
In the case of a retiree, there are two solutions that can be chosen: the assignment of the fifth and the lifetime loan.
In this article we will go through a complete overview of both solutions, outline their advantages and disadvantages and try to understand which one is better.
Consolidation of retired debts with the assignment of the fifth
The assignment of the fifth of the pension is one of the most classic and convenient loans for pensioners ever.
This is a loan granted to all Government Agency and other social security pensioners, obtainable from those who have a retirement or old-age pension.
The main feature of these loans is the repayment: each periodic installment is repaid with a deduction on the net pension and paid, by the social security institution, directly to the financial company or bank that granted the loan.
Who is it for?
The solution is perfect for all pensioners who can have it and who manage, with the maximum amount obtainable, to cover the residual amounts of all the other loans.
Since the maximum amount obtainable is obtained taking into account the net pension, on the basis of a pensioner loan installment calculation of which we have already spoken, it could also happen that it is less than the sum of all the remaining loans still to be repaid. This obviously makes it impossible to use the fifth assignment as debt consolidation.
Who can NOT get the assignment of the fifth pension?
Who has too low a pension who The main limit relating to the transfer of the fifth of the pension is linked to the amount of the net emolument that is received by the pensioner himself.
Italian law requires that the difference between the monthly net pension and the periodic installment amount always exceed the minimum pension amount for the current year.
Loans for pensioners with minimum pension
Who is over 75 years old. Another limit also concerns the maximum age of the applicant at the time of payment of the last loan installment: 75 years not completed. Sometimes there may be exceptions (such as for loans up to 80 years or loans up to 90, but they are somewhat rare and in any case more expensive.
The lifetime mortgage loan
There is talk of a lifetime mortgage loan to indicate a particular type of loan that can only be requested by retirees, with which a homeowner is mortgaged to have, on loan, an amount in money that must not be returned until the applicant’s death. same.
Once this time has come, the heirs will be able to decide whether:
- return the loan and redeem the property
- do not pay the loan and leave the property to the bank, which will sell it at auction.
It is precisely because of the presence of the mortgage that it is called the ” mortgage loan “.
Who can apply for the lifetime loan?
The basic conditions for applying for this loan are:
- be at least 65 years old
- have a home
- the property must have a value of at least 100,000 USD
The lifetime mortgage loan has the characteristic of being a contract that automatically expires on the death of the applicant. From that moment, the heirs have up to 10 months to decide what to do with the property and the loan.
Debt consolidation for retirees, which is better?
In general, between the assignment of the fifth and the lifetime loan, the first solution is preferred by most pensioners and chosen more frequently.
In consideration of the fact that it is a convenient loan, at always advantageous rates, and that the repayment is done automatically, without risking ending up in the bad pay register for a simple forget.
Indeed, considering that the presence of the pension is a strong guarantee, this financing can be requested and obtained without particular problems even by bad payers and protests.