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Secured Loans for Pensioners – Complete Review 2022

Secured Loans for pensioners

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

If you’re a pensioner, then you may find that getting approved for a secured loan is more difficult than it sounds.

There are a number of reasons for this which we shall explore today. 

In this post, I’ll be discussing what loan options you have as a pensioner as well as some tips that might help to get your loan application approved. 

Why is it Difficult to Find Secured Loans as a Pensioner? What Options do I have? 

As a senior citizen, when you go out to find a secured loan for yourself, you may find that a lot of lenders are apprehensive about giving out loans to you. There are a number of reasons for this. 

Many lenders feel the older citizens pose a greater risk of not being able to meet repayments. This is partly due to their old age and also partly because of the fact that they have limited income. 

Due to this, you may find that lenders may offer you loans at higher interest rates, they may offer you loans with much shorter terms or they may not offer you any type of loan at all. 

That being said, you can definitely find lenders who recognise retired people as good candidates for a loan. 

They will judge you to see if you meet all the other criteria and will consider your loan application on the basis of individual merit. 

A lot of retired individuals have assets that are more valuable than their incomes, such as equity in the family home. These assets can be put up as collateral when opting for a secured loan.

As you can probably imagine, lenders will be much more responsive to the idea of a secured loan where an asset is put up as collateral than an unsecured loan where they have no safety net. 

Pensioners loan

What are some Situations which Lenders may Look Favourably upon when Assessing a Loan Application? 

There can be a number of different reasons why an older/retired person with a good credit score and a decent pension may turn to a personal loan rather than their valuable assets in order to fund a purchase. 

A great example of this would be if borrowing rates are relatively low and your investments in the stock market are doing well, then you may want to keep those assets invested. As a result, when you want to fund a purchase, then low-interest personal loans might be a much better option. 

Another example would be if you’re working part-time and earning enough money in addition to your pension to comfortably make your debt repayments

If you are able to prove to your lender that your earnings from your part-time job as well as your pension are enough for you to pay back the loan as well as pay for your essential living costs, then it’s highly likely that the lender will approve your loan application. 

If you have additional sources of income such as rental income and dividends, it’s very important for you to mention them in your application. 

Additional sources of income will definitely work very much in your favour and will increase your chances of getting approved. 

Lastly, it’s obvious that having a good credit history will also work very well in your favour. If you’ve managed other forms of credit responsibly in the past, then lenders will definitely be more considerate about your application. 

You’ll find that a bad credit score will definitely make it quite hard for you to secure a loan, however, it’s not impossible. Although, the loan you find might have a much higher interest rate. 

What Information will I Need to Supply when Applying for Secured Loans? 

Firstly, you will need to provide basic details about yourself such as your name, address, date of birth, phone number, etc. 

You will also need to provide proof of identification. A driver’s license or a passport can work well as your proof of ID. 

You’ll need to inform the lender if you are a homeowner or not and whether you have a mortgage on your home or not.

Depending on what you’re putting up as collateral, you will need to provide complete information about the asset such as how much it’s worth, etc. 

You will need to provide adequate information and details about why you need the loan itself. 

Lastly, you will need to provide proof of income.

If you can provide a copy of your monthly expenditures to the lender, this can help you get a loan too. This is because it will help the lender assess how much cash you have leftover each month which you can contribute towards the debt repayments. 

You don’t need to provide them with your credit report as they can acquire this from any credit reference agency. 

What are some Things to Keep in Mind when Considering Secured Loans for Pensioners? 

It can be overwhelming when you’re applying for a secured loan as a pensioner which is why I’ve tried to break things down into some simple tips which you can keep in mind. When applying for a loan secured by an asset of yours, you should: 

  • Keep your credit rating as healthy as possible. You can keep your credit rating healthy simply by managing your credit well and making your debt repayments on time and in full. 
  • Always opt for a loan that has the shortest term and the lowest interest rate you can find. This will help keep your overall costs low and you will also become debt-free quicker. 
  • Always check the eligibility criteria before you apply to a certain lender. This is important because if you apply for a loan and are then rejected, then this will be recorded in your credit file. Not only will this lower your credit rating but you might also be prevented from applying for another loan for a few months. 
  • Consider different types of loans. While secured loans are definitely easier to get approved for, you might be better off with a shorter-term unsecured loan depending on what you need the money for. 
  • Always keep in mind any future expenditures which could hinder your ability to make payments towards your debt.
  • Always be sure to get a loan from a lender that is registered in England and is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority has set out guidelines which ensure that you, the debtor, is treated fairly.
  • For more information about secured loans, you can try to contact an independent debt charity such as StepChange.


It’s definitely true that you might find it difficult to find a lender that is responsive to your application when you’re a pensioner.

However, it’s not impossible and if you can convince the lender that you’re a responsible spender and are able to manage your finances well, then you’ll most likely have your application approved.