Elder care loans hit the market to help 'sandwich generation'
11/17/2010
By Credit.com Staff
Medical expenses, nursing home costs and assisted-living residency costs can be expensive for even the most financially stable Americans. Many adults who are part of the "sandwich generation" find themselves struggling to maintain the costs of raising children, meeting their own financial obligations and supporting an elderly parent. As a result, some are considering a new form of financing to help cover the costs of their parents, most notably elder care loans.
The loan generally comes in two types. The first allows family members to obtain an unsecured line of credit that will help "cover the gap" of the monthly costs of residing in one of the nearly 3,000 independent communities or assisted-living centers in the country, The New York Times reports.
The second type of loan covers the costs of entry fees into continuing-care retirement communities. However, the second loan must be secured by real estate or other collateral.
As with other types of loans, lenders will examine an applicant's credit score, debt-to-income ratio and credit history to determine their interest rate.
