A cash loan is by no means a loan that is paid out in cash. A cash loan is granted to a current or a separate account. Banks speak of a cash credit if the customer is granted a credit facility or a call credit. The borrower is responsible for using this form of credit by withdrawing a required amount of a granted credit line in cash. The credit line granted can also be used for non-cash transfers or payments. With the overdraft facility, this is possible at any time; the on-call facility only works if an account card with a payment function has been issued.
However, a cash loan can also be an installment loan that is repaid with monthly installments. The loan amount can then be transferred in cash or to the checking account. The cash credit for retirees can be used when the overdraft facility or the call credit has been exhausted.
But what about the cash loan for pensioners?
The definition of a cash advance
The advantage for a cash loan can be seen in the multiple use of the granted credit line and brings quick money. There are also no fixed repayment agreements. With the call credit, however, a minimum repayment is required monthly. The credit card account can also be called a cash credit if the customer uses the installment facility.
However, the cash loan as a small loan also counts and is referred to by banks as lightning or instant loans. The cash credit for pensioners is not earmarked, the credit can be freely used. Generally speaking, pensioners are not among banks’ favorite customers. It is often not the income that is decisive if a cash credit for pensioners is not approved. It is the age that concerns banks.
The conventional installment loan can be repaid with a long term. A cash loan as an on-demand loan, for example, can be used indefinitely. For the customer, cash credit is often the only way to receive credit in cash because, for example, an account is pending.
The bank’s own house bank also provides cash advances, which the customer can receive in cash at the counter. The borrowing from direct banks is then provided with a postal order that the customer can receive at the post office counter.
In order for the cash credit to be approved more quickly via an online bank, it is no longer necessary to carry out the Postident procedure at Swiss Post, but more and more lenders are carrying out the Video Ident. To do this, the customer must have a webcam and hold the valid ID card in the camera. The bank employee checks the picture against the customer.
No matter what functions have ascribed to the cash loan, the creditworthiness of the customer must also be sufficient with this type of loan. This means that his pension must be high enough for a loan installment to be paid at all. Not every bank provides a loan to a pensioner. The reason is the age of the customer, so there is often no credit when the pensioner has exceeded 70.
The bank sees this as an increased risk of default, since death or care can ensure that the loan is no longer paid. A long-term loan is also no longer eligible for approval at an advanced age. The loan amount is also very low, one can speak of a small loan. Loans are then often offered that have a short term but cannot be paid. Not every pensioner has a pension of 2,000 USD.
Often a residual debt insurance is then offered for a cash loan for pensioners, but this does not make sense. Firstly, it is mostly a small loan and secondly, many insurance companies no longer accept an older customer, and if they do, the insurance will be so high that the loan will become immensely expensive and therefore also unaffordable.
The bank will check the creditworthiness of the customer very carefully in the case of a cash loan. If the pension is sufficiently high and is above the garnishment exemption limit, if the Credit Bureau has no negative entries, other loans must be paid. All of this can only be found in old age if the examination has given a positive answer.
Studies have shown that pensioners are very reliable debtors. A loss of credit is as common among this clientele as among other borrowers. If the pension is not sufficient to secure a loan, other guarantees are often required. With a cash loan for pensioners, a second borrower can often increase the credit opportunities. A property of which the pensioner is still the owner also serves as security for a loan.
Anyone who has just started retirement has good credit opportunities from an old age. They get worse with age.