Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 12, 2013

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Far from being senior citizens that lack financial sharpness, the elderly actually have an advantage over younger generations when it comes to borrowing personal loans.

Unlike younger generations, the elderly have had an entire lifetime to build up credit, collateral, and value in their personal lives. These can be key benefits when it comes to borrowing money for personal needs.

To learn more about how the elderly fare when it comes to personal loan financing, loans.org spoke with several financial experts who understand the situations that surround senior citizens seeking to borrow money.

Gregory B. Meyer, Community Relations Manager at Meriwest Credit Union, told loans.org that age is not a consideration in lending approval. In fact, discrimination against any personal loan applicant over age is a violation of equal lending laws.

“If a firm were discriminating against seniors in their lending practices, they would be in some very deep trouble with the Consumer Financial Protection Bureau and others,” he said.

Meyer explained that his Credit Union underwrites each loan the same way: by looking at an applicant’s credit and income. He said that credit and income are far more important than an applicant’s age anyways.

“We review their credit scores and determine their debt-to-income ratios,” said Meyer. “In the case of a car, boat, or home loan, we will do our due diligence on the property to be encumbered/secured by a loan. If the credit score and debt-to-income ratios are within our guidelines and the security fits our standards, they get approved.”

Meyer said that senior citizens do qualify for personal loans more easily than younger persons namely because seniors have more experience in borrowing. This gives seniors a longer credit file history and shows they are more likely to have assets than someone younger.

However, Meyer did note that lenders base their decision on credit scores much more than credit reports. As a result, even younger members of society with high credit scores can find it easier to get a personal loan compared to a heavily indebted senior citizen.

In general though, Meyer said that older persons tend to own homes that are already paid off or at least paid down significantly. Additionally, they may have more unencumbered assets.

Leslie Tayne, Esq. of the Law Offices of Leslie H. Tayne P.C., told loans.org that baby boomers are often considered to be more stable compared to other generations. This is due to the fact that the Baby Boomer Generation is considered to have a high work ethic and many elderly are still working with few plans to retire.

While lenders claim they do not discriminate, Tayne did note that they will always prefer an applicant who is working over one who has no job. Despite this, the elderly often have substantial assets and are seen as good borrowers.

In fact, some of Tayne’s own elderly clients continually receive credit card offers each month. Unfortunately, the same cannot be said for younger generations, such as Generation Y, which is struggling under the burden of record-breaking student loan debt.

“In some ways, the elderly demographic is more stable since they tend to budget better, manage money effectively and are not usually impulse shoppers,” said Tayne.

But Tayne did warn that there is a downside to being an elderly member of society.

“While length of credit history is a factor in determining your FICO store, the longer you have credit for, the more of an opportunity there is to accumulate debt and get behind on your payments,” she said.