The need for finance can hit us at any time whether we are prepared or not. In case of financial emergencies, personal loans are of great help since there is no specific purpose tied to the loan. Though personal loans are available in abundance in the market, pensioners may find it harder to get an approval. Banks consider older folk a greater risk and are more reluctant to lend to them. But retired folk who draw a pension are still in a more favourable realm. Here are a few top banks that offer personal loans to pensioners with good benefits.
State Bank of India offers personal loans to retired employees of the Central or State Government. The loan is also extended to Defence pensioners. Family pensioners can also apply for this loan.
Purpose: You may avail of the loan to meet any financial need or family obligation.
Processing Fees: There are no processing fees charged for defence pensioners. Nominal fees are charged otherwise. The processing fees amount to 0.50% of the loan amount plus tax, subject to a minimum of Rs.500 plus tax. The loan is processed without any other hidden charges.
Loan Limit: The minimum loan amount sanctioned is Rs.25,000. The upper limit depends on the pension drawn and the age of the applicant. The loan amounts also differ between regular pensioners, defence pensioners and family pensioners. The maximum loan amount sanctioned is Rs.14 lakhs.
Repayment: The loan has to be repaid through standing instructions set to debit the pension account with the EMI amount on the set date.
Margin: There is no margin set for the SBI pension loan.
Guarantor: The spouse who is eligible for the family pension must stand as guarantor. In case the spouse is absent, then any other family member or third party of worth can stand as guarantor.
Interest Rate: The interest rate offered on the SBI Pension Loan is 3.80% above 2-year MCLR. Currently the rate of interest is 13.05% per annum.
Central Bank of India offers personal loans for pensioners to meet any genuine financial need. Emergencies and family obligations can pop up at any time, and a loan can come to the rescue in these times of need. Central Bank of India offers attractive interest rates, concessions to spouses drawing family pension and do not charge processing fees.
Purpose: Central Bank of India sanctions personal loans for pensioners for any genuine financial requirement. The loan is available as a term loan or an overdraft facility.
Processing Fees: There are no processing fees charged.
Loan Limit: Pensioners who are 75 years and below can get a maximum of 18 months’ pension. The highest loan amount available is Rs.5 lakhs. For pensioners above the age of 75 years, a maximum of 12 months’ pension is granted subject to a maximum of Rs.2 lakhs.
Interest Rate: The interest rate is currently at 11.70% per annum. This is calculated as the base rate + 2%. A concession of 50 basis points in the interest rate may be offered to spouses of pensioners who are drawing a family pension.
Punjab National Bank recognises the need for extra finance for pensioners in times of emergencies, medical expenses and personal needs. The bank offers a personal loan at low rates of interest to help pensioners meet these obligations. All pensioners who draw their pension through PNB are eligible to get a personal loan.
Purpose: To help pensioners meet financial needs including personal and medical expenses.
Processing Fees: There are no processing fees charged. There is a fee of Rs.500 plus GST applicable as documentation charges.
Loan Limit: The minimum loan amount sanctioned is Rs.25,000. The upper limit depends on the pension drawn and the age of the applicant.
| Age of Applicant | Maximum Ceiling Limit | Maximum Individual Limit |
| Up to 70 years | Rs.10 lakhs | 18 times net monthly pension 20 times net monthly pension for defence personnel |
| Above 70 years | Rs.7.5 lakhs | 18 times net monthly pension 20 times net monthly pension for defence personnel |
| Above 75 years | Rs.5 lakhs | 12 times net monthly pension |
Repayment: The loan must be repaid in maximum 60 EMIs. For pensioners above the age of 75 years, the maximum tenure granted is 24 EMIs. The repayment will be calculated on the basis of the net monthly pension so that all deductions including the loan EMI does not exceed 50%.
Margin: There is no margin set for the Punjab National Bank personal loan for pensioners.
Guarantor: The spouse who is eligible for the family pension must stand as guarantor. If the pensioner has a child who is earning (preferably employed by the Government), the child can stand as guarantor. Third party of net means enough to cover the loan amount can also stand as guarantor.
Interest Rate: The interest rate offered on the PNB Personal Loan for Pensioners is 2.60% above the MCLR.
All pensioners who are drawing their pension through any Punjab National Bank branch are eligible to apply for a personal loan.
Pensioners can avail of a personal loan from Bank of Baroda at easy terms and conditions. The bank offers low interest rates and no processing fees. All pensioners are eligible but the eligible loan amount will depend on the age and type of applicant.
Purpose: Bank of Baroda offers personal loans to pensioners to meet any financial requirements other than speculation.
Processing Fees: For pensioners and family pensioners of Bank of Baroda, there are no processing charges. For others, Rs.1,000 is applicable.
Loan Limit: Bank of Baroda offers loans up to 18 times the monthly pension. The maximum loan amount available depends on the type of pensioner and the age of the pensioner.
| Type of Pensioner | Age of Applicant | Maximum Loan Amount |
| Regular Pensioner | Up to 70 years | Rs.8 lakhs |
| Above 70 years | Rs.5 lakhs | |
| Family Pensioner | Up to 70 years | Rs.3 lakhs |
| Above 70 years | Rs.1.5 lakhs |
Interest Rate: The interest rate charged on this loan is the base rate + 2.00% per annum. For retired employees of Bank of Baroda and their family pensioners, the loan is granted at base rate.
Repayment: For regular and family pensioners, the repayment period depends on the age. For applicants up to 70 years of age, the maximum tenure granted is 60 months. For those above the age of 70 years, the maximum tenure granted is 36 months.
Purpose: Personal loans in the form of Demand Loan, Term Loan, or Overdraft is granted to pensioners drawing pension through the bank and retired employees of Bank of India.
Processing Fees: There are 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 is applicable. The processing charges are subject to a minimum of Rs.500 and a maximum of Rs.2,000. Stamp paper and loan agreement charges are also applicable.
Loan Limit: Bank of India offers loans up to 18 times the monthly pension. The maximum loan amount available depends on the type of pensioner and the age of the pensioner.
| Age of Applicant | Details | Maximum Loan Amount |
| Up to 75 years | Pension Payment Order held with Bank of India | 15 times net monthly pension subject to a maximum of Rs.5 lakhs |
| Pension from DPDO/Treasury received directly at branch | Depends on net monthly pension subject to a maximum of Rs.3 lakhs for pensioners, and Rs.1.5 lakhs for family pensioners | |
| Above 75 years | Secured Loan | Three times net monthly pension subject to a maximum of Rs.50,000. |
| Unsecured Loan | Three times net monthly pension subject to a maximum of Rs.50,000. |
Interest Rate: The interest rate charged on this loan is 2.00% + BSS (0.30%) over 1 Year MCLR. If the applicant offers liquid security exceeding 25% of the loan amount, an additional interest concession of 1 basis point will be granted.
Repayment: The net take home pension should be at least 40% of the pension amount. All deductibles should not exceed 60%. For unsecured loans, the maximum EMIs granted is 36. In exceptional cases, 60 months may be granted. For secured advances, the maximum EMIs is 60.
| Bank | Interest Rate |
| State Bank of India (SBI) | 13.05% per annum |
| Central Bank of India | 11.70% per annum |
| Punjab National Bank (PNB) | 2.60% + MCLR |
| Bank of Baroda (BOB) | Base Rate + 2% per annum |
| Bank of India (BOI) | 2.00% + BSS (0.30%) over 1 Year MCLR |
Pensioners have a choice from different loans to finance personal needs. The bank through which the individual draws the pension will offer a loan provided the circumstances are favourable. These loans can be used to finance just about anything you need.
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