Best personal loans for seniors

Our 5 picks for the best personal loans for seniors

• Our top pick overall: Upgrade
• Our pick for flexible repayment terms: Best Egg
• Our pick for larger loans: Achieve
• Our pick for smaller loans: NetCredit
• Our pick for customer service: Reach Financial

Methodology: We considered recent customer ratings and reviews to choose our top five personal loan companies for seniors. We also compared important loan features such as amounts, rates and funding times. Some companies may be Authorized Partners that compensate us, but this does not affect our recommendations. Read our full methodology below for all the details on how we select our top picks.

Compare our top picks

Best personal loans for seniors, reviewed

Personal loans for seniors buyers guide

Senior citizens on a fixed income might naturally wonder if they will be able to secure a personal loan. According to Randall Yates, co-founder and financial advisor for VA Loan Network, the answer is yes.

Still, navigating the world of personal loans can be challenging for anyone, especially those on fixed incomes or Social Security. Understanding the best options available can help seniors make informed financial decisions. This guide explores various loan types, eligibility criteria and tips for securing the best rates.

Loans for seniors on Social Security

“Seniors on Social Security should be able to qualify for personal loans if they are considered creditworthy and can meet income qualifications,” Yates said. “Fixed benefits are considered steady income by the majority of lenders.”

In general, banks and lenders are looking for the same eligibility criteria for seniors as they would for any personal loan: credit score, debt ratio, source of income (like Social Security) and overall financial health when determining seniors' qualifications to obtain loans.

Fixed income sources like Social Security or pensions increase the likelihood of loan acceptance; erratic or irregular income can slow or reduce access to capital, according to Yates.

A note on credit discrimination

Though their lives might be different from those still in the workforce full time, senior citizens can still apply for and get accepted for a personal loan. The Equal Credit Opportunity Act prohibits lenders from discriminating based on age, making it illegal to deny credit or favorable terms simply because someone is a senior citizen.

Alternative loan options for retirees

There are several types of loans senior citizens can qualify for. Yates said that fixed-interest personal loans, reverse mortgages and home equity loans are popular options for seniors. “These are usually best for seniors due to secure terms and access to equity with minimal risk,” Yates said.

Retirees with stable income and excellent credit should be able to apply for just about any type of loan, including unsecured personal loans, HELOCs, credit union loans or fixed-interest bank loans intended for fixed-income borrowers.

» RELATED: Personal loans for people with good credit

Understanding reverse mortgages and home equity loans

Senior citizens who own their homes and who don’t want to take on a traditional personal loan have two other loan options to explore: a reverse mortgage and a home equity loan. These are great for veterans or other retirees with a stable pension.

Reverse mortgage

A reverse mortgage allows homeowners over the age of 62 to tap into some of their home equity in cash with no monthly payment. Reverse mortgage lenders have specific requirements for their programs, but in general, you need sufficient equity built up, and the home borrowed against must be your primary residence.

Home equity loan

A home equity loan or line of credit is a great option for seniors who need short-term financial assistance but are otherwise able to repay a loan. Stable income and a decent credit score will be necessary for this type of loan. “Seniors can use a home equity loan (or a HELOC) to pay for home repairs, debt consolidation or medical expenses, provided they have a clear plan of repayment and stable income,” Yates said.

Potential disadvantages

Clearly, both of these loan options rely on using one’s home as collateral. So, there is risk associated with both. Yates pointed out several risks of home equity loans and reverse mortgages:

• Foreclosure can occur if you default on the loan
• Increased debt from interest payments
• Loss of equity in the home
• Reduced inheritance for those you leave behind

Seniors must carefully consider repayment capacity and long-term implications. “Drawing on your home equity is attractive thanks to lower interest rates and higher loan amounts, but ultimately, you risk losing your home if you are unable to pay,” Yates said.

Bottom line: What to consider before taking out a loan

Just because a senior citizen can qualify for a loan doesn’t mean it’s a wise financial decision. According to Yates, seniors should consider the overall cost of the loan, their ability to repay the loan over time, what effect it might have on estate planning, and whether selling assets or relocating might be a safer option.

Methodology

To select our top five personal loan companies — including the best overall — we used a weighted scoring system based on two factors: ConsumerAffairs user reviews and key company offerings we researched.

We analyzed thousands of reviews to see what mattered most to people and which companies performed best. For personal loans, reviewers cared most about:

• Loan process
• Customer service
• Staff interactions
• Timeliness

We also looked at crucial features like:

• Loan amount ranges
• Lowest available APR
• Funding speed
• Credit score requirements
• Maximum loan terms

Each company was scored using a formula tailored to these factors. The highest scorer earned the “Our pick for” title. If one company topped multiple categories, we named the next-highest scorer in some cases to highlight more options.