Personal Loans For Pensioners
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Personal Loans For Pensioners
Financial needs can arise anytime whether you are prepared or not. In such situations, personal loans can be of great help as they are mostly unsecured and are not tied down to a specific purpose.
Although personal loans are easy to get for income-earning individuals, older adults and retirees may find it difficult to get them approved. That’s because personal loan lenders consider pensioners as high-risk individuals as they lack a steady source of income. But, the good news is that several Indian lenders have realized the financial need of senior citizens and therefore have come forward to offer pensioners with a wide array of loan options. We have compiled a list of the top 5 personal loans for pensioners in India.
Top Personal Loans for Pensioners
- State Bank of India Pension Loan
SBI offers personal loans for pensioners to help meet their personal needs. With minimal documentation, SBI pension loans are easy to get through a hassle-free process.
Features of SBI Pension Loan
Eligibility Criteria: For Retired Central and State Government Employees
- Should not be over the age of 76 years
- Should be drawing pension through any SBI branch
- Pensions should be disbursed by Government Treasuries
For Family Pensioners
- Spouse authorized to receive the pension after the death of the pensioner
- The family pensioner should not be more than 76 years of age
For Defence Pensioners
- Eligible pensioners are from the armed forces, Navy, Army, Paramilitary, Air Force, Assam Rifles and Rashtriya Rifles, and Coast Guards.
- The pension should be drawn from the SBI account
- The maximum age is 76 years
- No processing fees for defense pensioners
- 0.50% of the loan amount plus tax, minimum of ₹500 plus tax for other pensioners
Repayment: Repayment is through standing instructions that debit the EMI on the scheduled date from the pension account.
Loan Limit: Minimum amount is ₹25,000 up to ₹14 Lakh. The upper limit depends on the pension drawn, the age of the applicant, and also the type of pensioners – regular pensioners, defense pensioners, or family pensioners.
Interest Rate: Depends on various factors such as loan amount, repayment tenure, etc., and is at the discretion of the bank.
- Spouse eligible for family pension
- An eligible family member or third party
- PNB Personal Loan Scheme for Pensioners
PNB offers personal loans to senior citizens drawing their pensions through their PNB accounts. The pensioners can use this loan amount for any financial requirements they may have.
Features of PNB Personal Loan for Pensioners
Eligibility Criteria: Pensioners need to draw their pension via a PNB account.
- Spouse eligible for family pension
- Earning child
- Third-party net means enough to cover the loan amount
Processing Fees: No processing fee is charged, however, there is a document charge of ₹500 plus GST.
Interest Rate: 11.75% per annum
Loan Limit: Minimum loan amount sanctioned is ₹25,000. The upper limit depends on the age of the applicant and the amount of pension drawn.
- Up to 70 years, up to 18 times of net monthly pension and 20 times of net monthly pension for defense personnel, up to ₹ 10 Lakh
- Above 70 years, up to 18 times of net monthly pension and 20 times of net monthly pension for defense personnel, up to ₹7.5 Lakh
- Above 75 years, 12 times of net monthly pension, up to ₹5 Lakh
Repayment: Typically, the loan has to be repaid in a maximum of 60 EMIs. However, for pensioners above 75 years, the maximum repayment period is 24 months.
- Central Bank of India
Central Bank of India is available both as a term loan and an overdraft facility. Central Bank of India offers do not charge processing fees, attractive interest rates, and concessions to spouses drawing a family pension.
Features of Central Bank of India Personal Loan for Pensioners
- Should draw pension through any Central Bank of India branch
- Should receive a pension from Treasury or the Defence Pension Disbursing Office
Processing Fees: NIL
- For pensioners below 75 years, the maximum loan amount is 18 months of pension up to ₹5 Lakh
- For pensioners above the age of 75 years, the maximum loan amount is 12 months of pension up ₹2 Lakh
Interest rate is at the discretion of the bank, and depends on factors such as loan amount, repayment tenure, etc.
- UCO Pensioner Loan
UCO offers pension loans to pensioners to help them meet their financial requirements, such as paying for medical emergencies, marriage expenses, funeral expenses, medical insurance payments, etc.
Features of UCO Pensioner Loan
Should be drawing pension through any UCO Bank branch
For pensioners with a living spouse and family pension facility available
- Up to ₹10 Lakh for borrowers up to 70 years of age
- Up to ₹5 Lakh for borrowers above 70 years of age
For family pensioners, pensioners without a family pension,s or pensioners without a living spouse
- Up to 10 times monthly pension, maximum of ₹3 Lakh
Rate of Interest
- For regular pensioners – UCO Float Rate + 3.30%
- For UCO Bank staff pensioners – UCO Float Rate + 2.30%
The loan needs to be repaid within 48 installments and before the pensioner reaches age 75.
- Bank of India Star Pensioner Loan
Bank of India offers the Star Pensioner Loan scheme to pensioners withdrawing a monthly pension through any of Bank of India’s branches. Retired employees of private firms who receive a pension through a BOI account are also eligible. Individuals who have been dismissed from their job or given compulsory retirement are not eligible.
Features of Bank of India Star Pensioner Loan
- Should be drawing monthly pension through a Bank of India branch
- Family pensioners should be drawing a monthly pension through a Bank of India branch
- Retired employees of Bank of India (not including the terminated or compulsorily retired employees).
The limit is up to 18 times the monthly pension. The maximum loan amount available depends on the type of pensioner and the age of the pensioner.
Up to 75 years
- Pension Payment Order held with Bank of India- 15 times of net monthly pension up to ₹5 Lakh
- Pension from DPDO/Treasury received directly at branch- Loan amount depends on net monthly pension of up to ₹3 Lakh for pensioners, and ₹1.5 Lakh for family pensioners
Above 75 years
- For a secured loan, it is 3 times of net monthly pension up to a maximum of ₹50,000
- For an unsecured loan, it is 3 times of net monthly pension up to a maximum of ₹50,000
10.50% per annum. If liquid security exceeding 25% of the loan amount is offered, then an additional interest concession of 1 basis point is granted
- No processing charges for pensioners who are 60 years and above
- For all others, a one-time processing fee of 2% of the loan amount, a minimum of ₹500, and a maximum of ₹2,000 is applicable. Stamp paper and loan agreement charges are also applicable
- For unsecured loans, the maximum is 36 EMIs. In exceptional cases, 60 months EMIs may be granted
- For secured loans, the maximum is 60 EMIs
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