Over 50s who struggle to meet the criteria of high street lenders can now take out a flat rate loan with Saga Money.
What’s the deal exactly?
Saga is offering loans between £1,000 and £25,000 for a flat rate of 7.9% APR to all successful applicants.
It says consumers are unfairly lured in by low advertised rates that turn out to be very different in reality. It adds that loans are advertised at an average rate of 3.23% APR but consumers are eventually being offered an average of 8.06% APR.
Why should I care?
Around one-in-six over 50s have been turned down for a loan, often because of their age, according to Saga. Those who have income from sources other than a full time job can also struggle to meet affordability criteria.
What’s the catch?
Applicants must be aged between 50 and 75 and own a home in England, Scotland or Wales. They must have a single or combined income of at least £12,000, but this can include pensions and income from savings and investments.
What other options do I have?
Personal loans are available from all major banks and building societies. You can use Moneywise’s personal loan comparison tool to see how much you could borrow from other providers.
Credit unions are another option for those struggling to get a loan from mainstream lenders. According to the Association of British Credit Unions Limited (ABUCL), credit unions legally cannot charge more than 3% a month on a reducing balance, which means an APR of 42.6%. But it adds that some will charge no more than 1% a month on the reducing balance - 12.7% APR - or less.
Where can I find out more?
Full details and application forms are available on the Saga Money website or by calling 0800 121 4240.