Take out a loan from the bank? This is only for young people or families. This opinion persists in our society – obviously also in many banks. A study by the Institute for Financial Services now reveals that older people in Germany have a much more difficult time Loans get. The study results at a glance.
Pensioners hardly receive any loans
A study by the Institute for Financial Services (IFF) has shown that older people in Germany are having increasing difficulty taking out loans from banks – be it to finance a new heating system or for consumer and real estate loans. Age plays a “disadvantaging role” in lending practices, the study says. Last Tuesday, Ferda Ataman, the Federal Anti-Discrimination Commissioner, expressed her concern and saw this as a clear warning signal.
No loans for seniors: These are the reasons
The survey showed that 55 percent of respondents confirmed the existence of age limits when granting consumer loans. But that’s not enough. When it comes to real estate loans, 71 percent of those surveyed perceived a disadvantage. In addition, 41 percent of those surveyed said that there are age limits for applying for consumer loans. According to the study, the average age is 67 years. In the case of real estate loans, this was confirmed by 57 percent of those surveyed, although here too the average age limit is 67 years.
But why do seniors hardly receive loans? The authors of the study attribute this practice to the widespread assumption among financial institutions that the probability of repayment decreases with increasing age. This is justified for various reasons. These include reduced income at retirement age, the increased risk of death and the increased risk of needing care.
Branch closures support the problem
Another relevant factor that has the potential to have a negative impact is the increasing number of branch closures. The reduction was further accelerated by the Corona crisis. According to the study, this makes it more difficult for older borrowers in particular to access advice.
In addition, loan applications from older people are often rejected without individual examination. This is happening due to the increasing standardization of lending, which is being reinforced by digitalization and the brokering of loans through online portals. These developments represent an additional hurdle for older borrowers and have a negative impact on their finances.
Sources: Editorial Network Germany and Tagesspiegel
2023-10-09 11:55:36
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