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[MoreMore Insights] Can Pre-Retirees Get 30-year Term Loan?



In Australia, the difficulty of obtaining a loan can be affected by the age and repayment ability of the borrower. Banks and financial institutions may question the repayment ability and plans of elder borrowers because of their relatively short repayment schedules and the risk of repayment.



Typically, a borrower aged 60 years applying for a 30-year home loan may face some challenges. Banks may take into account the age of the borrower at the end of the loan term to ensure that they can afford to repay the loan after retirement.


However, the actual situation may vary from bank to bank and loan product to loan product. Some financial institutions may consider whether to offer a 30-year loan based on a combination of the borrower's personal circumstances, such as retirement plans, source of income and repayment ability. Of particular importance is the loan exit strategy, which will indicate the plans to be taken by the borrower at the end of the loan term or early repayment of the loan. This strategy is often used to ensure that the borrower can effectively pay off the loan without getting into financial trouble. In addition, the borrower may be required to provide relevant financial information to demonstrate that they have sufficient repayment capacity.



Below are some possible loan exit strategies:


Superannuation repayment: The borrower uses the balance of his/her superannuation account after retirement to make monthly repayments on time.


Early repayment: The borrower repays the loan early before the end of the loan term. This may involve an early repayment fee, as some loan products may charge a fee for early repayment.


Refinancing: Before the end of the loan term, the borrower may refinance to extend the loan term or get more favorable loan terms. This can help spread the stress of repaying the loan.


Selling assets or downsizing: If the loan is tied to a specific investment asset, the borrower can sell or transfer the asset to repay the loan. Or if the loan is secured by owner occupied property, downsizing can help to repay the loan.


Renting out the property: In case of a home loan, the borrower can consider renting out the property to support the repayment of the loan through rental payments.


In recent years, MoreMore Finance has helped many borrowers from all ages apply for home loans with a 30-year repayment period. If you would like more details, please communicate with us about your situation, and understand the specific policies and conditions of banks and financial institutions.


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