Leading finance expert: Banks engaging in age discrimination

Home loan expert and financial advisor Julian Finch is calling out banks giving older Aussies applying for credit cards and loans a miss.

"It is unethical of banks to discriminate against older Aussies who are financially more stable!" he stated.

"This practice is becoming more commonplace but it's absolutely abhorrent that they're not approving credit cards and loans for retirees."

With decades of experience in mortgage broking, Finch offers expert insights and advice to thousands of Aussies seeking to get their loan applications approved. His firm, Finch Financial, achieves some of the high loan approval rates in the country and is known to secure loan approvals within a matter of minutes.

Why won't banks lend to seniors?

"Australia has an ageing population. By 2026, more than 22 percent of Australians will be aged over 65 years old, up from 16 percent in 2020, which was already double the figure of 8.3 percent at the start of the 1970s," Finch said. 

"Banks turn down applications for credit cards, home loans and personal loans by older people for a number of reasons, firstly because many older Australians are retired and don't have a job and the regular income that comes along with having a job even if they have substantial investments and few debts. Secondly, they are seen as a higher risk because of their age and potential to become sick or even die."

Older Aussies are not seen as ideal credit card holders

"In addition, institutions also turn down credit card applications because most retirees pay their cards back before the due date and the banks don't earn any interest. On the other hand when someone else younger comes along and is more likely to only be able to meet the card minimum repayment, the bank knows that they'll earn a quick buck or two from this person, so they'll approve that person's application for a credit card.

"But what happens if a senior Australian is wanting a credit card or personal loan because their age pension or superannuation isn't enough? With the cost-of-living crisis, it's no wonder more senior Aussies are looking at their options now. No matter what our age, our need to access credit doesn't stop. We might be faced with any sort of circumstance from medical costs to home repairs or family emergencies and we might need extra money along the way."

Credit card options for seniors

"Luckily, there are still some options for older Australians. If you're retired and you're looking for a credit card, it's best to look for a no-frills option," Finch said.

"Some pensioner credit cards have low fees and lower interest rates and have a low minimum credit limit. If that concerns you, don't worry because once your application is approved and you become a customer you can request a credit limit increase or update your card later.

"Do your research and shortlist two or three cards that are suitable and then call each bank to check your eligibility and get all your documents in order before you start applying. This is crucial because each bank has different requirements. For example, for NAB you need to have a letter from a financial planner or advisor, and these things take time to get organised. I always advise people to apply for a card within their means, with a manageable credit limit."

What to do if your credit application was unfairly denied

"So, you've done your homework and you've still being discriminated against? What do you do next? Follow up with your lender with additional proof of financial status and remind them that you know your rights and that denying pensioners credit is a breach of the Australian Human Rights Commission age discrimination rules. There are minimum age requirements for credit cards but certainly no maximum age limits. If you know your rights and advocate for yourself, you can overcome the challenges against pensioners and retirees," Finch said. 

Reverse mortgage

"Many older Australians own their own home and this may give them the option of a reverse mortgage, but these are typically expensive and considered unpalatable given their relative infancy in lending products," Finch said.

What to do about a loan rejection

"Believe it or not but every financial institution has different requirements and terms for their lending products.  Some banks may not lend to people over a certain age, where as others might," Finch said.

"With the country moving towards an older population and a longer working age, age discrimination needs to be addressed. Many people are now working well into their 70s and beyond.  With new relationships and changing needs, it is easy to see why more older Australians are needing finance later in life.  

"If a pensioner owns an investment property which means they wouldn't be a government funded pensioner, then the lending rules change significantly. Brokers have tools in their kits to ensure older applicants can easily get their credit approved. To avoid age discrimination, find a good broker. A broker with plenty of experience will match you to the right lender ensuring your age does not impact your financial borrowing outcome."

About Finch Financial Services

Based in Hurstville, NSW, Finch Financial Services has been servicing Australian families and businesses with home, personal and commercial loans as well as asset finance services since 2015. Ranked amongst the top five percent of brokerages in Australia according to data from the MFAA, Finch Financial Services is a leading brokerage and family owned business that specialises in finding its customers loans that are tailored to their needs and goals.

https://finchfinancial.com.au/