What are Pension Loans?
Pension loans are loans given to retirees or pensioners where their future pension payments are used as collateral. In a typical pension loan, the pensioner will take a lump sum of cash in the short term in exchange for a certain number of his pension payments in the future. While there are many potential pitfalls to be aware of, pension loans can be a good option for some people who find themselves in need of cash in the short term. There is a certain demographic segment that pension loans are designed to benefit. For example, they can be good for pensioners who find it difficult to get financing through traditional sources. Many financial institutions do not consider a pension plan as a valid source of income, for the purposes of underwriting a loan. If the person does not have other considerable assets to borrow against, they may be seen by banks and other lending institutions as unqualified borrowers, and financing may be impossible to obtain. Those organizations which offer pensio
