Living the life of a senior citizen in Canada could be problematic at times. Especially, when you face the lack of funds in your pocket to even meet the basic level requirements like food, health security, medical bills, and like. Not only this, several times old citizens in Canada face other monetary issues like not being able to travel urgently to some place, buying something important, or facing other challenges. But thanks to the two key financial assistance available in Canada like Canadian Pension Plan (CPP) and Old Age Security (OAS). These two pension plans available for senior people in Canada help individuals to at least meet the day-to-day requirements.
However, not everyone has the capability to meet all financial requirements within the assistance offered by CPPS and OAS monetary schemes. This is where the need to apply for loans for seniors in Canada is available online within easy reach of people. As the name implies, these loans are meant only for senior citizens living permanently in Canada. Different categories of senior loans are offered to provide the required financial assistance to people,
So, here in PaydayCity, we will reflect insightful information on loans for seniors in Canada based on different types and benefits to look into.
What are the different types of senior loans in Canada?
There are several types of loans for seniors available online in Canada and interested borrowers can apply as per the required financial need. To be precise, here are the different types of senior citizens loans Canada to consider.
1. Home Equity Loan
A home equity loan is simply a financial offer against your current set of properties. Senior citizens having a property in their name can apply for a home equity loan to acquire as much as 75% of the total home value. Loan lenders do not find the need to check your credit history, employment details, debts, and bank history. All you have to do is showcase the relevant documents of your property and arrange a loan against the same with ease.
Pros & cons of home equity loan for senior citizens in India
- Completely rely on the valuation of your existing property and no income details are asked by the lender.
- Use the loan amount as per your own flexibility and terms.
- Readily available online for you to apply at any point in time.
- Borrowing cash against the property means losing your credibility on the house.
- Sometimes home equity-based loans for seniors in Canada are offered by lenders that charge higher interest rates.
2. Home Equity Line of Credit
A home equity line of credit (HELOC) is somewhat similar to that of home equity loans, that we have mentioned above. This loan also allows you to arrange cash against your current property and can get a maximum of up to 65%. However, the difference between HELOC and home equity loans is based on different conditions. For instance, lenders offered HELOC will take into consideration your credit ratings, employment history, income-to-debt ratio, age, and more.
Pros and cons of home equity line of credit
- Better than home equity loans with less financial risk involved for senior citizens in Canada.
- Combine the existing credit with the loan offering.
- The loan allows you to withdraw the cash as per your requirement, whether a small or big amount.
- Secured against your existing property.
- A variable interest rate is charged from your side.
- The interest-only payment feature allows you to pay only interest charges.
3. Short-Term Loan
The name says it all. Short-term loans for seniors in Canada are the most popular financial offerings. The small amount is offered to fulfill the urgent monetary need and stay out of trouble for long. As the name itself implies, short-term loans are meant to offer you a small amount against your respective pension plan in Canada. That means you will be asked to repay the loan along with the rate of interest after receiving the pension amount.
Pros & cons of short-term loans for seniors in Canada
- Easy availability of small cash instantly.
- Need not undergo a lengthy loan process.
- Easy to apply online at any point in time,
- Interest rates could be on the higher side.
- Sometimes difficult to repay on time.
Another variety of loans for seniors in Canada available online is refinancing. It allows senior citizen people to secure a new loan with much better terms and conditions. This loan offers the flexibility to reduce the loan amount and get it approved quickly.
Pros and cons of refinancing
- Secure a new loan offer with comparatively lower interest charges.
- Easy to negotiate with lenders based on lower monthly repayments.
- Simple to consolidate debt with the help of this loan.
- Credit history, income-to-debt ratio, and other prerequisites must be checked to offer the required approval.
- Refinancing a loan might additional set of costs like closing costs, appraisal fees, application fees, etc.
Terms and conditions to apply for loans for seniors in Canada
There are a few preconditions you need to meet to get the fast approval of the preferred choice of loans for seniors in Canada.
- You must be living permanently in Canada and have valid proof of the same.
- You must be receiving the income in the form of a pension at least for 3 months.
- You must have a monthly pension income of $800.
- You need to have a valid bank account and its complete details.
- You must have a valid phone number, address, and email ID.
Loans for seniors in Canada are beneficial financial offers available for Canadian senior citizen people to deal with monetary emergencies. Different long-term and short-term loans for senior citizens are available online allowing interested borrowers to know complete information and apply for the same. Also, the seamless online facility makes it hassle-free for old age people to stay comfortably at home and apply from their choice of device.
Frequently Asked Questions (FAQs)
Can a 70-year-old senior citizen apply for an online loan in Canada?
In case, you are a senior citizen and are covered by the pension plan, then you are eligible to apply for a senior citizen loan in Canada without facing any hassle.
How to select the ideal senior citizen loan lender in Canada?
Just study the website and profile of the lender in terms of reviews, feedback, success rate, and licensed certification to know the reliability of a lender.
What is the interest rate charged on loans for seniors in Canada?
It depends on the type of loan you apply for, the total amount offered, and the duration. After finalizing such details, the rate of interest will be decided.