What Are The Personal Loan Features For Pensioners? Things To Know

Personal loans can be a valuable tool during a financial emergency, mainly because they have a quicker approval process than other mortgages, subject to bank rules and eligibility. For pensioners, however, it may still be challenging compared to salaried people or those in active work who can readily show proof of income. For seniors, the scrutiny may be higher, such as related to health and the applicant's age, in addition to showing proof of income.

Since pensioners may not have another income source other than their monthly pensions and could earn relatively less than a person in an active work life, banks may have restrictions on the maximum loan amount for them. However, it may be waived based on the annual income from one or more sources or financial and property assets held. Fortunately, many top banks, like the State Bank of India (SBI) and the Central Bank of India, consider personal loans for seniors based on their monthly pensions or other income sources, loan duration, and creditworthiness.

However, some lenders may offer competitive interest rates, flexible repayment options, and minimal documentation to process loan applications for senior citizens and retirees.

Here are some features of a personal loan offered by SBI and the Central Bank of India:

SBI Loans For Seniors

SBI offers a pension loan or personal loan for senior citizens who have retired from their active work to meet their financial needs during an emergency. The processing fee is waived for retired defence personnel; however, others will be required to pay a nominal fee. The maximum loan amount is Rs 14 lakh, and the minimum is Rs 25,000, depending on the applicant's pension and age. The loan must be repaid according to the instructions and is debited from the pension account through the Equated Monthly Instalment (EMI) mode on the set date. There is no margin money for the SBI pension loan, but the spouse must be a guarantor. The interest rate offered on the loan is at the bank's discretion, depending on the loan amount and repayment tenure.

Eligibility

The loan is available only for retired central and state government employees until the age of 76. The age criteria also, applies to retired personnel from the army, navy, air force, paramilitary forces, Rashtriya Rifles, Assam Rifles, and coast guards. The pension must be disbursed by government treasuries and drawn from any SBI branch.

Central Bank Of India Loans For Pensioners

The Central Bank of India provides personal loans to pensioners to meet their financial needs, including emergencies and family obligations. These loans are available as term loans or overdrafts with no processing fees. The maximum loan amount is Rs 5 lakh for pensioners aged 75 and below, while for those over 75, it is Rs 2 lakh. The interest rate offered is at the bank's discretion and depends on factors such as loan amount and repayment tenure. Concessions are available for spouses drawing family pensions, and no processing fees are charged. The loan is available as a term loan or overdraft facility.

Eligibility

The bank offers loans to pensioners who receive pension through any of its bank branches, treasury or Defence Pension Disbursing Office and directly credited to their savings account held at any Central Bank of India branch.