Ideally, you should have no significant financial matters to attend to once you enter retirement. Unfortunately, the chances are that you’ll run into at least one of them.
Furthermore, said matters can come in varying degrees. This means that they can either be somewhat insignificant or even a complete burden. But for this article, we’ll be focusing on the latter.
Commonly, a retired person has a decent amount of savings to cover their living expenses. However, those savings might be lacking for any emergency, which you can only attend to with a larger-than-average fee.
For the most part, covering said fee with their savings can only take away from their retirement experience, which is something nobody wants.
When facing this sort of situation during your working years, you might have made use of a personal loan. But that was during a time in which you had a monthly income to cover your payments with. So the question has to be asked, is it still a reliable option during retirement?
How should a retiree tackle a personal loan?
A personal loan allows anyone to borrow a given amount of money out of any bank of trust. Once the loan is given you to, you’ll have to pay it back with interest monthly, sprawling for the next couple of years.
As mentioned above, you might have already asked for a loan in your younger years. But once again, you had the help of your income to cover your debt.
Retired people can cash in on their social security benefits in a way not that different from receiving a monthly paycheck. So, is it viable to do so? It depends.
While Social Security benefits tend to be tight, they still might be helpful to your situation. Overall, you’ll have to consider the following question. How much are you being asked to pay for your emergency? Is Social Security your primary source of income?
Ideally, you want to ensure that your benefits are sizeable enough to cover the necessary amount without affecting you negatively. If they are, feel free to proceed with this method. If they’re not, you might want to consider alternatives.
Our recommendation? If you feel comfortable with it, try applying for a part-time job.
Keep in mind that these paychecks will most likely be gentler when compared to your old ones. Even if you mix them up with your Social Security benefits, they might not allow you to come up with your emergency money right away.
Nonetheless, said mixture might work just well enough for you to ask for a loan and then be able to pay your debt both steadily and successfully.
In essence, applying for a personal loan during retirement is only viable when the borrower has the means to cover for it without using their savings.