Your loan, and how old you are
If you’re going to be borrowing money, we take a close look at your personal and financial situation. We want to make sure you can actually pay off the loan. How old you are is also a factor when you’re applying for a loan. At ABN AMRO, you can take out a loan if you’re between 21 and 69 years of age. But just why is that? I’ll explain in this article.
Minimum age
In the Netherlands, you must be at least 18 to take out a loan. That’s by law. That said, lenders are allowed to set a higher minimum age. At ABN AMRO, it’s 21.
Credit risk
Young people’s income is often too low for them to afford a loan. That’s why we don’t accept loan applications from anyone under 21. We don’t want them to borrow money only to land in trouble. And the same applies to us, too. As a bank, we don’t want to run too high a risk of not getting back the money we’ve lent out. We call this our “credit risk”.
Lower income due to retirement
This credit risk also increases with age. It has to do with income, for example. The older you get, the more likely it is that your income will fall—for instance, because you’ve retired. And the bank also takes into account the mortality risk factor, which unfortunately increases as you get older. The risk is therefore higher that older clients will not repay a loan and will leave their relatives to pay it off. To mitigate this risk, you cannot take out a loan from a certain age.
Faster repayments
As you get older, you can also often borrow less. That’s because we would like you to have paid off your loan before you turn 75. So if you take out a loan when you’re 69, you can take up to 7 years to pay it off. That means your monthly repayments will be higher.
Want to know just what we look out for when you apply for a loan? Find out more here. Or you can always contact the staff at our Loan Desk. They’ll be happy to help.