Written by: Eric Bank
Edited by: Lillian Guevara-Castro
You’ve worked hard all your life and earned your retirement income from Social Security as well as benefits from a pension or defined contribution plan. But that doesn’t mean you’re no longer interested in taking out a loan, even if you have bad credit.
To that end, we review here a dozen loans for pensioners with bad credit.
Your retirement income may be sufficient to satisfy lenders despite having bad credit. Read on to see your many options.
Personal Loans for Pensioners with Bad Credit
The following three lending services work with networks of loan providers that are comfortable lending to bad credit consumers. They work around the credit problem by requiring monthly income, whether from a job, benefits, and/or a pension.
1. MoneyMutual
- Short-term loans up to $5,000
- Online marketplace of lenders
- Funds available in as few as 24 hours
- Simple online form takes less than 5 minutes
- Trusted by more than 2 million customers
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| Up to $5,000 | Varies | Varies | See representative example |
MoneyMutual is a matching service that hooks you up with a lender for a short- or long-term loan of up to $2,500. To be eligible, you must collect a dependable income of at least $800 per month.
You can expect to receive the proceeds to be deposited into your checking account in as little as one business day once your loan is approved.
2. CashUSA.com
- Loans from $500 to $10,000
- Receive a loan decision in minutes
- Get funds directly to your bank account
- Use the loan for any purpose
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $500 to $10,000 | 5.99% - 35.99% | 3 to 72 Months | See representative example |
CashUSA.com can find you a source for a personal loan of $500 or more. To qualify, you must have an income of at least $1,000 per month and a checking account in your name.
Typically, the repayment period ranges from three to 72 months. The lender recommended by CashUSA.com can approve your loan application within a few minutes.
- Loans from $250 to $5,000
- Cash deposited directly into your account
- Get money as soon as tomorrow
- Bad credit OK
- More than 750,000 customers since 1998
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $250 to $5,000 | Varies | Varies | See representative example |
CreditLoan can find a bad credit personal loan from $250 to $5,000 for consumers with reliable income, such that your debt-to-income ratio ideally is below 36%. You must have a bank account to qualify.
The recommended lender will set the loan terms, including the interest rate. Check out its website for a personal loan calculator to estimate monthly loan payments.
- Loans from $500 to $10,000
- Get connected with a lender
- Simple form & quick funding
- Get your money as soon as next the business day, if approved
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $500 to $10,000 | 5.99% - 35.99% | 3 to 60 Months | See representative example |
Bad Credit Loans arranges loans of up to $5,000 with up to 60 months to repay. To be eligible, you must have a regular income, a checking account, and a valid email address. Bad Credit Loans has been matching borrowers with lenders since 1998.
- Loans from $250 to $35,000
- Large lender network
- Fast loan decision
- Use the loan for any purpose
- Funding as soon as one business day, if approved
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $250 to $35,000 | 5.99% - 35.99% | 3 to 72 Months | See representative example |
PersonalLoans.com arranges loan amounts from $500 to $35,000, and you can take up to 72 months to repay. You must be a U.S. citizen or resident with regular monthly income and have a bank account to qualify.
PersonalLoans.com operates in all 50 states. Expect your money in as little as one business day.
- Short-term loan of $100 to $1,000
- Large network of lenders
- Loan decision as fast as a few minutes
- Funding as soon as the next business day, if approved
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $100 to $1,000 | 200% - 2,290% | Varies | See representative example |
CashAdvance.com will help you get a short-term cash advance from $100 to $999. You must repay it as soon as your next payday.
To be eligible, you must be a U.S. citizen earning at least $1,000/month after taxes. In addition, you must have a checking account, Social Security number, and email address.
Auto Loans for Pensioners with Bad Credit
Auto loans can be used to purchase new and used vehicles or to cash out equity by refinancing an existing car loan. These three lending services each work with an extensive network of car dealers who are willing to make auto loans no matter what your credit score is.
- Network of dealer partners has closed $1 billion in bad credit auto loans
- Specializes in bad credit, no credit, bankruptcy and repossession
- In business since 1999
- Easy, 30-second pre-qualification form
- Bad credit applicants must have $1500/month income to qualify
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| 3.99% - 29.99% | 1999 | 3 minutes | 9.5/10 |
Auto Credit Express has closed more than $1 billion in auto loans to bad credit consumers. To qualify, you must receive a monthly income of at least $1,500. This lending service promises a quick decision after you complete a short loan request form.
You can get a loan even if you’ve experienced a repossession or bankruptcy. Auto Credit Express began operating in 1999.
- Free, no-obligation application
- Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
- Affordable payments and no application fees
- Connects thousands of car buyers with auto financing daily
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1994 | 3 minutes | 9.0/10 |
Car.Loan.com started up in 1994 and has been arranging bad credit auto loans ever since. It boasts the country’s largest network of car dealers willing to lend to bad credit consumers.
The amount you can borrow depends on your monthly income, rent/mortgage payments, garnishments, minimum credit card payments, and other loan payments. Expect a same-day decision.
- Loans for new, used, and refinancing
- Queries a national network of lenders
- Bad credit OK
- Get up to 4 offers in minutes
- Receive online loan certificate or check within 24 hours
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 2003 | 2 minutes | 8.5/10 |
MyAutoloan.com is a matching service that can get you up to four offers in minutes from car dealers, credit unions, banks, and affiliates. If approved, you’ll receive funding in the form of a bank deposit, ACH transfer, blank check, or another form.
To qualify, you must have a minimum income of $1,800 a month and a minimum FICO score of 525. The minimum loan or refinancing amount is $8,000.
Home Loans for Pensioners with Bad Credit
Home loans come in a variety of forms. You can get a new mortgage or refinance an existing one. If you already own your home, you can apply for a home equity loan, line of credit, or a reverse mortgage.
All these loans are available to pensioners, and the lenders reviewed here don’t disqualify applicants on credit scores alone.
10. LendingTree
This offer is currently not available.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| N/A | N/A | N/A | N/A |
LendingTree is a peer-to-peer marketplace that facilitates transactions between lenders and borrowers. It takes less than 10 minutes to apply for any type of home loan.
You can receive up to five offers within minutes, and when lenders compete, you win. LendingTree has helped to close more than $250 billion in loans since 1996.
11. FHA Rate Guide
- Options for home purchase or refinance
- Get 4 free refinance quotes in 30 seconds
- Network of lenders compete for your loan
- Trusted by 2 million+ home loan borrowers to date
- Interest rates are near all-time lows
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 2004 | 4 minutes | 8.5/10 |
FHA Rate Guide is an information service. It provides information about various loans guaranteed by the Federal Housing Administration.
With the information provided, you can select a suitable source of FHA-guaranteed home refinancing loans. It takes less than a minute to get up to four quotes. Using the FHA Rate Guide will not affect your credit score.
- Easy to OwnSM programs give options for those with lower income, limited credit history, and low down payment needs.
- Provides the potential for minimal out-of-pocket expenses with seller contributions.
- Offers loans that don't require monthly mortgage insurance.
- Requires less cash upfront for your down payment and closing costs.
- See application, terms, and details.
| Interest Rate | In Business Since | Form Length | Loan Example |
|---|---|---|---|
| Varies | 1852 | 6 Minutes | See representative example |
Wells Fargo Home Mortgage directly offers loans to buy or refinance a home. The bank works with the Federal Housing Administration, the Veterans Administration, and the Easy to OwnSM Guaranteed Rural Housing programs to keep down payments low.
You may qualify for a loan without mortgage insurance, even if you have a scant credit history or limited upfront cash.
Can You Get a Loan if You’re Retired?
Retirement should not be a barrier to obtaining a loan. Of course, your income level, collateral, and credit score will affect the amount you’ll be able to borrow.
However, even if you have a low credit score, the 12 lenders reviewed above are experts at finding a way to approve a loan.
Your home and vehicle(s) can help you secure a loan when you are retired and living on a fixed income. Many retirees have owned their homes for a long time and have, therefore, built-up equity.
The same may be true for their vehicles. You can use that equity to unlock home and auto refinancing loans at any age, including your retirement years.
Auto Credit Express gets the highest score for automobile loans. You can arrange a refinancing loan with a local dealer to cash out the equity in your vehicle.
If you’re a homeowner, LendingTree garners the best rating among our home lenders. You can unlock your home equity with a second mortgage or line of credit, or by refinancing your first mortgage. If you’re 62 or older, you can consider a reverse mortgage loan as well.
If you have sufficient income, you can qualify for a personal loan from the three lending networks in our review. MoneyMutual is our top pick, requiring an income of as low as $800 per month. A personal loan is a good option, especially for pensioners who rent their homes and/or don’t own a car.
The truth is that, in our current era, many pensioners continue to work part time to supplement their incomes. If you are one such pensioner, you may have more than enough income to qualify for a personal loan.
How Much Loan Can a Pensioner Qualify For?
The amount pensioners can borrow depends on the type of loan. For example, a personal loan from CashUSA.com can reach as high as $10,000.
Your income and expenses are an important factor, especially if your credit is bad. Some income-related facts to consider are:
- Social Security: While you can start receiving Social Security benefits as early as age 62, your annual benefit will increase each year you wait. You receive the maximum benefit if you postpone taking Social Security until age 70.
- Qualified defined contribution plans: The SECURE Act of 2019 raised the age from 70 ½ to 72 at which you must start taking required minimum distributions (RMDs) from your 401(k) or IRA plan. Furthermore, you can continue to postpone your employer-based 401(k) RMDs as long as you keep your job with that employer. Notwithstanding the RMD rules, you can choose to withdraw money anytime from your qualified retirement plan, and, as long as you are at least age 59 ½, you won’t have to pay the 10% penalty for early withdrawals.
- Defined benefit plans: These are pension plans worked out between employers and employees. They usually pay defined benefits for life that are adjusted annually for inflation. These plans vary widely as to when you can start taking benefits and how much you’ll get.
- Annuities: If you own an annuity contract, the date you start taking payments (the annuitization date) is defined in the contract. Annuities can run for a fixed number of years or for the remainder of your life.
Your income is less of an issue if you own and have equity in your home. You can convert the equity into cash via a refinancing loan such as a new first mortgage, a second mortgage, or a home equity line of credit.
Some of the loans from Wells Fargo Home Mortgage are designed to minimize your up-front cash requirements to refinance your home.
Can I Take a Loan Against My Pension Fund?
Some retirement plans permit loans, others don’t. Federal regulations forbid loans from IRAs, including SEP and SIMPLE IRAs. This is true for Roth IRAs as well.
Employee Retirement Income Security Act (ERISA) regulations allow you to borrow money tax-free from your qualified defined-contribution plan (i.e., 401(k), 403(b), 457, and Thrift Savings Plan). However, certain rules apply:
- The plan sponsor must allow loans.
- Some plans require spousal consent on loans greater than $5,000.
- The maximum amount you can borrow is the lesser of 50% of your balance or $50,000.
- If your balance is between $10,000 and $20,000, you can borrow up to $10,000 despite the 50% rule.
- You must repay the loan within five years. You can take longer if you use the loan to build or buy a home.
- You must pay interest on the loan. The interest, minus any fees, is deposited back into your account.
- Failure to repay on time will convert the loan to a taxable withdrawal.
A loan from your retirement plan might come in handy, but it is not without cost. Beyond the fees and interest, you lose the tax-free growth on the borrowed amount until you repay it. In addition, you’ll have to immediately repay the loan balance if you separate from your job.
A very different type of loan is available if you have a pension. Often called a pension advance, you receive a lump sum in return for signing over some or all future pension payments to the lender.
You’ll also have to pay interest on the loan, and often the interest rate is extremely high. Experts advise avoiding this type of loan.
Retirees Have Options
The 12 reviewed sources of loans for pensioners with bad credit can accommodate you if you have sufficient assets and/or income. Your equity in assets, such as your home or car, can serve as collateral for your loan.
If you apply for a personal loan, the lender will want to know about your monthly income and expenses. All the reviewed personal loan networks can fund your loan in as little as one day.
You’ve worked hard for long enough — now let one of these lending networks work for you.
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