There are special “green” loans available for retirees, specifically for energy efficiency. With the help of these loans, elderly people can replace windows and doors, insulate their walls, purchase heating equipment, heat pumps, solar panels, etc. The distinct feature of these loans is that the money is not given directly to the retirees, but it is disbursed to the supplier based on the proforma invoice, and the retirees receive the equipment or materials.
In these cases, retirees can even expect to receive a refund of up to one-fifth of the loan, because banks offer such arrangements in collaboration with international financial institutions that finance “green” projects in the country. The reason for these specific loans being available to retirees is because there are many retirees in the local population, and they are generally financially capable citizens. With the current pension payouts for January, which have started these days, and the accompanying increase of 14.8 percent, the average pension will amount to 390 euros.
Though there has been significant inflation in recent years, the government has increased the income of the elderly, resulting in a cumulative increase of 56.1 percent in the last two years, according to the Minister of Finance. Twelve years ago, this category of citizens had average monthly incomes of 204 euros, making them much riskier for banks in terms of loan repayment. While the risk of our oldest citizens not repaying the loan still exists, it is not because of the amount of their pensions, but rather because of their advanced age.
All banks have solved this problem by covering these loans with life insurance. The new aspect is that all banks have formally taken on this cost themselves. However, this cost is factored into the loan, as seen in the higher interest rate that the elderly must pay, which is several percentage points higher than for the working population.
For comparison, the average interest rate on personal loans is around 14 percent.