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Mar 11

Borrow up to £150k at an attractive rate if you’re aged 55-70

Reading Time: 5 mins

Are you over-55 and needing to borrow money?

It’s likely that banks and other lenders have told you they’re not interested in lending.

You might even have considered equity release but been put off by the idea.

Happily there’s a new product on the market that is aimed specifically at those over 55 and under 70 who need to borrow between £15k-150k


What is this loan and what are the rates?

What is the Free2 loan?

The loan is offered by a company called free2.

It’s an unsecured loan (that’s very important) that is based on your ability to pay it back from your guaranteed pension income from an annuity or a final salary pension. You must be able to demonstrate that you can pay the loan off from unused income that you get from your guaranteed pension, which also includes a state pension. . If your accounts show that you’re just about managing each month then you’re unlikely to get the loan. But if you clearly have money left over – or your clearly spending on stuff you don’t need – then you’re likely to be offered the loan.

how much can you borrow and at what rate?

You can borrow between £15,000-150,000 over terms from 5 to 20 years.

The typical rate for these loans is between 6-7%. The interest rate is fixed at just over 6% and goes up to 7.9% for non-smokers. Smokers’ APRs will be a bit higher..once an application has been accepted.

Nick Baker from Free2 says: “The rates quoted will not go up. Unlike other lenders we don’t use the headline rate hook and then on application, underwrite them and charge a significantly higher rate in certain circumstances.”

If you use their loan calculator for any given age and put in the loan amount you need, you will see the options which are available for any applicant.

Here is a comparison of their loan rates against similar lending from other outlets*:


Provider User profile Max Loan  Max term Example rate* Max APR** Comments Max Lending Age
First Direct *60 year old

Non smoker

£25k-£30k 7 yrs 3.30% 21.90% Existing Customers only No max age, based on affordability
£50,000 7 yrs 6.70% 21.90%
Halifax £35,000 5 yrs 5.80% 29.90% Existing Customers only No max age, based on affordability
New customers max is £25,000
Virgin Money £35,000 7 yrs 6.90% 29.90% Same for new & existing customers No age limit, based on credit file/affordability
free2 £150,000



20 yrs (55 yr old)

8 yrs

8 yrs







APR is age dependent not on term or loan size. Loan written off if borrower dies before the end of the term 70 with loan repayable by 75th birthday
Sainsbury’s Bank £30,000 5 years 6.20% 24.90% Nectar members only [min 6 months] Subject to individual application
NatWest £40,000 8 yrs 6.90% 29.90% NatWest customers only [min 3yrs] & need online banking to apply No age limit, based on credit file/affordability
RBS £40,000 8 yrs 6.90% 29.90% RBS customers only [min 3yrs] No age limit, based on credit file/affordability
Tesco £35,000 7 yrs 7.90% 25.50% If you have a Tesco Clubcard it may positively impact your application Aged between 18 and 74. You must be aged under 75 at the end of your loan term
HSBC £25,000 8 yrs 6.70% 21.90%  No age limit, based on credit file/affordability
Cahoot £20,000 5 yrs 2.80% 24.90% Retired is an option for income on application No age limit, based on credit file/affordability
TSB £40,000 5 yrs 6.90% 39.90% Based on TSB Customer, max £25,000 for non TSB Customers No age limit, based on credit file/affordability
John Lewis £25,000 5 yrs 5.00% 20.90% Pension income is allowed No age limit, based on credit file/affordability
AA £25,000 7 yrs 3.00% 29.90% Regular income required and no older than 70 when the loan ends Over 21 and no older than 70 when the loan term end
Post Office £25,000 7 yrs 3.00% 29.90% Retired is an option for income on application Over 21 and no older than 70 when the loan term end
1 plus 1 Loans £10,000 5 yrs 47.80% 49.00% Guarantor Loan No older than 80 when the loan completes if you are not a home owner you must be at least 21 years old.

*sources: lenders’ websites.

**The max APR any borrower may get is not the same number as the typical APR


How do you qualify for the loan? What’s the catch?

The prime element that free2 are looking for is a borrower who has a guaranteed pension income that they don’t completely spend each month (or wouldn’t need to if pushed). They need to have either a guaranteed annuity or a final salary pension. With both of those products you are guaranteed a certain income until you pass away.

The other ‘catch’ is that you have to be a homeowner (with or without a mortgage. They say that your home is not at risk, it is not used as collateral for the debt and the loan is not secured on it. However, they want to know that you are a homeowner.

Nick Baker adds “As part of our affordability and credit risk profiling we do ask that people are homeowners with or without a mortgage. Our research shows that just over 70% of our target market are homeowners. Having equity in their home gives them a cushion for later life and improves their financial stability..”

Also, of course, you must be between 55-70 years of age to qualify for this particular type of loan.

N.B. be aware that a fee of £299 is added to your loan on completion of your application.

getting and paying back the loan

A really good aspect of this loan is that it is flexible – you can choose a repayment period from 5 to 20 years – and there are no early repayment penalties. We are big fans of flexible loans here so this is good news as far as we are concerned.

You apply for the loan online and there’s no ‘advice’ aspect to it. It’s just up to you how much you ask for and how long you have the loan for.

If you are accepted for the loan you usually get the money within two working days.

free2 is actually a credit broker – essentially a middle man – and designed the product working as an Appointed Representative for RS Consumer Finance Limited.

What could you use the money for?

A loan from Free2 can be used for anything except setting up a business or investing

Frankly you could use that money for anything you like: a big holiday, doing the house up, helping your kids with a deposit on the house or paying for care for your elderly parents.

What you can’t use it for is to set up a business. That’s an absolute ‘no’ for free2. They also advise against borrowing that money in order to invest it (so no spending it on Bitcoin or GameStop shares!)


What happens if you die before the loan is paid off?

If you die before the loan is paid off the full amount is written off.

Your children or other inheritors will not be liable for the loan, which is a big plus for this offer.

If you’re aged 55 to 70 and need a loan for a cash injection, visit free2.com to find out more.

*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.

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10 months ago

I would hope to be debt free at this age.

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