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 loan to pensioners with good benefits.
| Bank | Interest Rate |
|---|---|
| State Bank of India (SBI) | At the discretion of the bank |
| Central Bank of India | At the discretion of the bank |
| Punjab National Bank (PNB) | 11.75% per annum onwards |
| United Bank of India | MCLR (One Year) + 4.65% which is 12.65% |
| Bank of India (BOI) | 10.50% onwards |
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 at the discretion of the bank and will depend on factors such as the loan amount availed by you, repayment tenure, etc.
For retired Central and State Government employees
For defence pensioners
Family Pensioners
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 offered will be at the discretion of the bank and will depend on factors such as loan amount availed by you, the repayment tenure, etc.
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 11.75% per annum.
All pensioners who are drawing their pension through any Punjab National Bank branch are eligible to apply for a personal loan.
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 10.50% per annum. 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.
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.
The process to apply for a personal loan for pensioners in India is very simple. You can visit the official website of the bank which offers this personal loan scheme and apply. You will have to provide the relevant details such as your name, age, pension you are receiving, etc. and upload the relevant documents. The bank will then review the application form and the documents, and if they are found to be correct, they will disburse the loan amount to your bank account.
You can also visit your bank’s nearest branch along with the relevant documents in order to apply for a personal loan for pensioners scheme. A representative from the bank will get in touch with you and will help you with the application process.
You can avail a personal loan for pensioners to meet various requirements such as planning your child’s marriage, buying your dream home, planning a vacation, for medical purposes, etc.
In case you are a pensioner who has availed a personal loan who get disposed or sick or in a situation where you will not be able to repay the loan on time, then your guarantor will have to pay the remaining loan amount to the bank. Personal Loan for Pensioners is a secured loan and a guarantor is required before the bank agrees to allow you to avail the loan.
You can log in to your bank’s customer portal using your user ID and password to pay your EMIs. There is a range of payment modes that you can choose to pay your EMIs. You can use credit card, debit card, net banking, e-wallets, or UPIs to pay your EMIs.
You can also visit the nearest branch of the bank from whom you availed the personal loan and pay your EMIs by credit card, debit card, challan, cheque, or by issuing a demand draft in the name of the bank. You can also pay by cash to repay your EMI.
The repayment tenure offered may range from lender to lender and also depends on your age and the loan amount availed by you. However, the repayment tenure offered may range between 2 years and 5 years.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
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