As a retiree, our needs change. We all want to maintain our independence in our own home where we’re comfortable. However, if you are eligible for support at home through the Home Care Packages Program you will generally have to start on a lower-level Package.
A Level 1 Package only covers your care needs up to $9,026.45 a year. You may also be asked to contribute to the cost of your care if you can afford it by paying a Basic daily fee of up to $10.85 and an Income-tested care fee of up to $31.14 (based on current figures).
If you require more services after that, the money has to come out of your pocket. While you may have been deemed eligible for a higher-level package, the wait times can be up to a year – and longer.
If you don’t want to wait, you may want to consider applying for personal finance. But why should you consider finance?
Why should I consider finance?
If you are a self-funded retiree, you may think that drawing on your super is a suitable option. This can have a drawback: the money you take out now will mean it will have to be spread thinner as time goes on, as your ability to beat inflation diminishes when you have a lower account balance. Also, getting a personal loan can spread out the cost over time, which makes the big cost manageable.
How to qualify
In most cases, if you have some kind of income, you may be able to pass the first hurdle of getting a personal loan. That means being self-funded, on the aged pension, or a combination of the two.
Bill Tsovualas, Managing Director at Savvy, says that setting a realistic budget and tying the loan to the item you want to purchase can help you gain approval.
“A secured loan, where a loan is tied to some kind of collateral, is seen as a lower risk by lenders. This makes them more likely to approve your loan. However, don’t expect miracles such as applying for tens of thousands of dollars when you have a limited income. Temper your expectations and you will achieve your goals.”
You will need to provide documentation such as bank statements to prove income; you may also need to show proof of home or asset ownership.
Other sources – the pros and cons
Other types of finance are instant cash loans – which can have extremely high interest rates compared with traditional personal loans – and reverse mortgages. The latter relies on you owning your own home or property. A reverse mortgage is still a loan and requires repayment; and it may affect your ability to apply for pensions and other government benefits.
The Pensions Loan Scheme allows retirees to increase their income by up to 150% of their pension amount, which is repaid after the sale of their property. Pensioners can also gain an advance on Centrelink payments for up to three weeks’ worth of pay, which requires repayment within six months.
Personal loans – easier and faster
Personal loans spread out the cost over time, are easy to apply for, and can have you up and running sooner rather than later. Remember; before applying for personal loans, talk to a financial professional for advice.
