It is easy to avail of personal loans when you’re a salaried individual. Public as well as private banks will easily fund your requirement, while NBFCs also readily offer personal loans to people between the ages of 18 to 60. However, personal pension loan requests made by pensioners are often ignored by most financial institutions. They consider pensioners a huge risk since their age comes with a lot of health uncertainties.
And so, most banks also have an upper cut-off age limit for personal loan eligibility. That said, there are a few personal loan providers for pensioners in India.
1. PNB personal loan scheme for pensioners
Punjab National Bank (PNB) is among the biggest public lenders in the country. Its personal loan products are available for all citizens, including pensioners. The product is available to senior citizens drawing their pension through their PNB account. The pensioners can use the amount for any reason. The interest rate on the loan is fixed at 11.75%, while there’s no processing fee charged.
That said, the loan amount cannot be lower than ₹25,000. As for as tenure is concerned, the loan must be repaid in a maximum of 60 EMIs. For pensioners above 75 years, the maximum repayment period is 24 months.
2. State Bank of India (SBI) pension loan
Pensioners drawing their pension from SBI can avail of a personal loan at any of SBI’s branches. The loan is available for the retired employees of the state as well as the central government. Although the scheme is valid for pensioners only till the age of 76, the processing fee is nominal for normal customers and nil for defence employees.
The minimum loan amount is ₹25,000 and the maximum amount is equal to 18 times the monthly pension of the pensioner with a limit of ₹14 lakh for age up to 72 years, ₹12 lakh for age between 72 years and 74 years, and ₹5 lakh for age between 74 years and 76 years.
3. Bank of India star pension loan scheme
Pensioners, until the age of 75, can avail of personal loans from the Bank of India. The only catch is that they must be drawing their pension from any of the bank’s branches. The maximum loan amount that can be availed is equal to 18 times the net monthly pension, although the bank will also consider the type of pensioner and the age of the pensioner.
There is no processing fee and the interest rate is fixed at 10.50% per annum. Coming to tenure, it is a maximum of 36 EMIs for unsecured loans and 60 EMIs in case of secured loans.
4. UCO pensioner loan
UCO Bank is another major government-owned bank that offers personal loans for pensioners. They can use it to fund expenses like medical emergencies, marriage, funerals, medical insurance, and so on. The loan limit is up to ₹10 Lakh for borrowers up to 70 years of age, up to ₹5 Lakh for borrowers above 70 years of age, and for family pensioners, pensioners without a family pension, or pensioners without a living spouse, it is up to 10 times of monthly pension.