The conditions of accessibility to consumer loans are not as flexible for people in precarious situations as for permanent contracts. Banks are still as demanding in relation to the financial situation of the borrower.
To meet the challenges of retirement, seniors can use consumer credit. Without the intermediary of the banks, consumer credit offers attractive conditions to reduce the cost of borrowing, a requirement for a retiree with declining income.
Banking conditions to access the loan
As all borrowers know, banking institutions require that they have all the information related to the client’s financial situation in order to take out a loan. This allows them to know the feasibility of the project and the viability of the debtor for the reimbursement of monthly payments.
It is easier for people on permanent contracts to obtain credit since their professional situation is stable and does not present much risk. The case is different for individuals in a situation of job insecurity.
Access to consumer credit is almost impossible for precarious workers
With the current economic situation, so-called “precarious” employment contracts are increasing. People with temporary employment also want to take out a consumer loan for the purchase of one or more expensive goods, such as an automobile. This type of profile does not interest banks since it does not guarantee an adequate standard of living.
Precarious work is often accompanied by low income and the duration of the contract is often very short, which does not reassure financial organizations. It is for this reason that a bank will more easily reject a request for credit for this type of job.
Higher rates in the face of precariousness
For people considered “at risk”, banks lend at a higher rate than for individuals on permanent contracts. The greater the risk taken by the bank, the higher the interest rate on the loan.
In addition, it is almost impossible for a precarious worker to access consumer credit if he does not have financial guarantees such as life insurance, a guarantor in case of non-reimbursement or a large amount of savings.