As you reach closer to your retirement age, you start to worry about your finances. Even though you have set aside money for rainy days, there is no guarantee that you will meet all of your needs. As a retiree, you do not have to spend the same as you would do, but it is hard to spend your life without a fixed schedule of receiving a pay cheque.
However, loans for retirees can give you a leg up in meeting all expenses. You can apply for personal loans, short-term loans, loans for unemployed people, peer-to-peer loans, and debt consolidation loans. You may think that you do not need to take a loan as half of your spending has cut down, but some surprises will catch you as you step in your retirement age. Here are some financial myths that you should debunk immediately.
- Medicare covers all medical services
Medicare can help you save your money on medical tests, but it does not include all services. Hearing aid, dental care, eye examination, contacts and lenses, acupuncture, and regular foot care services are not included in Medicare. You will have to maintain a budget because it is your out-of-pocket expense. You may need a supplement plan, which will be affordable but not free.
- You will save more because expenses are less
Just because you do not have to incur job-related expenses does not mean that your outgoings have dropped greatly. You will find yourself spending more on activities such as travelling, eating out, sports club, and taking up a new hobby. So you need to manage your funds more diligently.
- Downsizing will help you save more
Many retired people move into a smaller home to reduce home-related cost. However, this idea seems to be more expensive. Chances are the new location is more expensive. It will be difficult to arrange family gatherings. If you decide to go back your family home, it can cost you very high.
How Should You Manage Your Finances?
- Prioritise spending
Once you are retired, your earning sources will be minimal. The more you tab on your finances, the more you will have for a rainy day. If you have taken a loan to fund your emergency needs, your instalments must be on the top of your list.
- Find a part-time job
When you are thrown out of your routine job, you may feel bored. A part-time job will not only help you overcome the monotony but also bring you extra money. You may run a shop or accept job offers from employers.
What are Guaranteed Unemployment Loans for Retired People?
Guaranteed unemployment loans are short-term funding sources, which are designed to finance your emergency needs. These loans require a guarantor with a good credit history and therefore you do not need to have a stellar score.
There are four categories of retired people, who are eligible to apply for unemployed loans.
You are a self-funded retiree as long as you have an income-generating asset. You can apply for the unemployed loan if you have enough evidence to prove your lender that you receive income from an investment.
You may be able to qualify for the loan if you survive on your pension only. The lender will assess your total income to find out your reimbursement capacity and accordingly will disburse the loan. Chances are you get less than what you quoted.
- Part-time job
You can apply for the loan if you have a part-time job. If the lender gets convinced by your income statement that you will be able to pay back your loan on time, they will not hesitate to lend you money.
While taking the loan, make sure that you have capacity to reimburse the whole of your debt on time. These loans come with high interest rates, so you should research the market to choose the lender offering the most competitive interest rates. You must have a source of income to apply for these loans. Since unexpected expenses can come up anytime, you should frugally spend your money.
Read this article for more information on Top 5 loans for bad credit people