• Car Loans for Pensioners

    If you are a retired individual who wishes to purchase and own your own car, there are banks and financial institutions that offer loans that have been specifically designed for pensioners. It is relatively easy to secure these loans and to repay them. The eligibility criteria and terms and conditions associated with each lender are different, thereby making it important for you to carefully read the fine print before drafting your application. Here is an example of a car loan scheme offered to pensioners by a financial institution:

    United Car Loan Scheme for Pensioners

    The purpose of the United Car Loan Scheme for Pensioners is to provide financial assistance to retired individuals who wish to purchase cars that are not older than four years.

    Eligibility Criteria for United Car Loan Scheme for Pensioners

    Here are the eligibility requirements for those who wish to avail the United Car Loan Scheme for Pensioners:

    • Must be a pensioner of the State or Central Government, State or Central Government Undertakings, Defence Services, Public Sector Undertakings, educational institutions such as schools, colleges, institutes and universities, and reputed companies.
    • Must draw a net monthly pension income of at least Rs.20,000.
    • In case the spouse of the pensioner seeking a car loan is still working, the spouse’s net income may be taken into consideration for the calculation of total net income as well as monthly instalments. However, this can only happen if the spouse is the co-borrower of the loan, and the EMIs can be realised from either of their salaries or pensions.
    • A pensioner can avail the United Car Loan Scheme for Pensioners together with his working daughter or son, or spouse.
    • Family pensioners are not eligible for the United Car Loan Scheme for Pensioners.
    • The amount borrowed through a United Car Loan Scheme for Pensioners should be repaid prior to attaining the age of 75 years.

    Key Features of United Car Loan Scheme for Pensioners

    Here are the important features of the United Car Loan Scheme for Pensioners:

    Maximum Loan Amount Rs.10 lakh
    Margin 15% of the value of the on-road price of the vehicle (in case of new cars), and 25% of the value of the vehicle (in case of used cars)
    Processing Charges 0.59% of the amount borrowed subject to at least Rs.600 and no more than Rs.11,800
    Interest Rate 9.15% p.a. for repayment tenures extending up to 72 months, and 9.90% p.a. for repayment tenures extending up to 48 months
    Repayment Tenure Up to 72 months for new cars and 48 months for used cars
    Prepayment Charges Nil
    Penal Interest 1% p.a. on the instalment amount
     

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