Usually, banks do not consider the disability condition as a discriminating factor for granting or not a loan. It all depends, however, on the pathology from which one is suffering and on one’s own economic possibilities because, in the event of insolvency, the disability pension could cause some problems for the bank.
So, if you find yourself in the situation of having to apply for a loan using only your disability pension as a guarantee, then I will try to provide you with useful information and clarifications on the matter, anticipating you however that the possibilities vary a lot depending on the individual credit institution and the pathology.
Loan with disability pension: what are the requirements?
As in most cases of requesting a loan, if you use your invalidity pension as a guarantee, you must know that the bank substantially affects two things: that in case of previous loans you have repaid the entire amount without delays or failures and that you do not exceed the maximum age limits.
If you have no problems under these fronts, then you just have to make sure that your disability pension is sufficient to guarantee the repayment of the monthly payment, leaving you enough money to have a decent standard of living. In a nutshell, you have to prove that you can return the full amount you are given.
In any case, there are particular cases in which your disabled status could be an impediment to your loan request. Much depends on the pathology and the state of disability, as a high probability of death before the loan is repaid could be a deterrent to the bank that has to accept your request.
What loan can you apply for with a disability pension?
If you request a loan giving only your disability pension as a guarantee, then it is from this that the bank or any credit institution will have to draw to secure the repayment of the sum loaned. However, the withdrawal must allow you to receive a sum that allows you to live with dignity.
Precisely for this reason, the credit product most commonly used in these situations is the so-called loan with a retirement loan, a type of loan that allows you to repay the sum received through direct withdrawals from your disability pension that do not exceed, however, one fifth (20%) of the amount you receive.
As we were saying, the Rosencrantz with a pension assignment are also released on the basis of disability and the possibility of death: in fact the loan is protected by an insurance policy and, therefore, there must be no chance of death of the applicant too high.
What documents are required?
As with all loan applications, you too will have to present all the documentation attesting to your personal details and your income. But since the disability stage is a determining factor for the success of your loan application, then you will also need to present all the medical documents that attest to your condition and your condition, as the bank will want to evaluate everything before proceeding.
The medical certificate will also be evaluated by the insurance company that will stipulate your life insurance linked to the loan.
In what situations does the bank not provide the loan?
There are several cases in which a bank may decide not to grant a loan with a disability pension and, generally speaking, they concern the possibility of death of the applicant or those that can no longer repay the sum. In fact, the many cases the invalidity pension can not be attacked in the event of insolvency, ie the bank cannot claim against it if you stop repaying the loan.
Consequently, these are the cases in which the banks or the lender could decide not to accept your loan application with disability pension :
- pathology too serious and probability of death too high;
- disability pension too small;
- disability pension too insecure, or that, for whatever reason, it may be suspended or eliminated.