Ask loan providers the age of their oldest borrower, and you’ll be surprised by their answers. Expect a range of 40-50 years old, and see a thought bubble pop into your head. Does that mean those who are way over that range are too old to take out a loan?
While lenders like Rapid Loans don’t have bold signage announcing age limits for borrowers, you can’t help but think they may be an unwritten rule, when, in fact, they’re not.
Strict Age Policies
They’re not an unwritten rule because they’re written. Some lenders do have age policies and have separate loans and terms for pensioners and retirees. But, as the Australian Broker writes, providers think the rules are discriminating.
They want to do without the strict limits, as banks and other lenders are taking them too seriously. Some refuse to approve loans for people in their 40’s, even though that is still far from retirement age.
It’s understandable that the lenders want to ensure the borrowers can pay their debts off in the coming years. But, is it the right way to do so?
The Age Discrimination Act, 2004
Elder borrowers think it’s not, and the Age Discrimination Act seems to back them up. The act prohibits discrimination on the basis of age in many aspects of a person’s life. This covers the provision of goods and services, taxation, education and employment, among others. Although it seems general, it’s a big step towards shutting the age policies out.
If older individuals have jobs, why will lenders refuse to approve their loan or mortgage?
In addition, provisions like the Equal Credit Opportunity Act have already been in effect in the US and other parts of the world for decades, meaning virtually everyone can get financial assistance. It may be time to update the law in order to update the policies.
Beyond the Number
Still, hope springs for elder borrowers, as not all lending institutions and banks adhere to strict age policies. And, there are ways to work around your loan or mortgage application. Be the credible borrower that you are.
Mortgage Choice spokesperson Jessica Darnbrough told The New Daily that while it may be more difficult to get financing, proving you can pay it off can ease up the process.
‘Make sure you have paid all your bills on time for at least two years before jumping into a mortgage, so when a lender looks back on your financial history they can see that you’re responsible and reliable,’ Ms. Darnbrough said.
No one’s too old to take out a loan they can pay off. Hand them that application and show them that a good borrower is a good borrower, regardless of age.