Top 7 Things To Know About Pension Loans For Senior Citizens

Outlook Money

What is a pension Loan?

A pension loan is a loan against a pension and requires no other assets as collateral. It is a personal loan for pensioners instead of salaried individuals.

Age Limit

Banks offer this loan up to the age of 75 years; however, a few banks don’t have any upper age limit. For example, the Indian Overseas Bank (IOB) has no maximum age bar for pension loan applicants.

Documents Required

As a personal loan for pensioners, it doesn’t require extensive documentation. The only documents needed to avail of a pension loan are proof of identity, proof of address, and pension payment order (PPO) number.

How Much Can One Borrow?

Different banks have different conditions regarding the loan amount. The maximum amount is typically Rs 10 lakh. Few banks also have age criteria to determine the loan amount.

Interest Rate:

The interest rate differs from one bank to another. However, these are typically between 10 to 13 per cent.

Loan Tenure:

Typically, banks offer this loan for a maximum five-year (60-month) repayment period starting from the next month of availing the loan.

Processing Fee:

It varies in different banks, ranging from zero to Rs 1,000.

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