As seniors live longer, the number of Australians aged between 65 and 84 is likely to more than double, according to ASIC. An extension of one’s retirement life corresponds to a more reliable source of income and how it can be utilised. It’s probable to see an increase in demand for seniors equity loan products. So, ASAG outlines 7 ways you can use your seniors equity loan.
This type of equity release can help improve your standard of living during your retirement. This type of loan products for seniors can help many Australians live out a better quality of life.
With that in mind, ASAG will run through seven various situations showing how an equity release can help older Australians achieve lifestyle and financial goals.
1. A seniors equity loan for everyday expenses
This is for a senior who’s living solely on a pension. Let’s say you only have $600 in your transaction account and $15,000 of credit card debt when you applied for this loan.
You can take out $50,000 to refinance your credit card debt, make home improvements, and cover everyday living expenses.
2. Spend quality time with the family
If you moved home to be closer to your children but found your pension does not enable you to go on holidays with your family or spend some quality time with them.
Why should you just sit there and twiddle your thumbs when you only have a few years left? It’s better to arrange for some extra cash to allow you to enjoy your time with your family.
3. A holiday funding
Are you retired, living primarily off your pension, and fancying a trip around Australia? Or perhaps travelling overseas is more your style?
If you have a property valued at $400,000 and only $1,000 of cash in your bank account which is held by a different lender, through this equity release, you can borrow a $70,000 lump sum to pay for your holiday.
4. Renovation and downsizing
If you’re divorced, quit your job to retire, and live alone, you can redirect your efforts into building your dream home.
Living on income support payment, you can choose to take out a seniors equity loan to cover the loss of your partner’s savings and wages, and to finish the new build.
After finishing the home and if you plan to stay in it no more than a year, you can then downsize in the same location or area for you to pay off the loan.
5. Help out your family with seniors equity loan
Say you live by yourself, working and saving for retirement, then one of your children suddenly needed some support. You decided to leave your job to help provide care.
But without your income, you could not afford to cover your debt repayments, so you took out this loan. Later on, you can re-enter the workforce and make voluntary repayments on your seniors equity loan.
6. Early loss of employment
An employee worked for the same employer for about 30 years. An unanticipated sickness forced him to take an unpaid leave to recover, but he was fired which resulted in an early loss of employment.
If you are in the same situation and ineligible to receive your age pension, you can take out a seniors equity loan to supplement your superannuation and cover your day-to-day living expenses.
7. Live out your retirement at your current home using seniors equity loan
If you have lived in the same house for years, you can take out a seniors equity loan for home repairs and improvements, which you believe will enable you to continue to live independently in your home as you grow older.
You can use the funds for ageing carpet replacement, installing cooling and heating systems, or building a ramp for stair replacement.
It’s vital to keep in mind that a seniors equity loan has to suit your specific situation. Get in touch with ASAG if you would like to know which category you fall into. We’d love to help you figure out whether a seniors equity loan could fulfil your future needs.
If you liked our “7 Ways To Use Seniors Equity Loan” and found this information useful, check our blogs regularly to keep you updated about seniors equity loans and equity releases.