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Personal Loans For Pensioners

IndianMoney.com Research Team | Updated On Friday, July 20,2018, 03:32 PM
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Personal Loans For Pensioners

 

 

There are times in life, when you badly need a personal loan. If you are well-employed and drawing a high salary, you can easily get a personal loan. Now, think about the pensioner. He too needs money in a financial emergency.  He would love to avail a personal loan to meet this emergency. The big question? Will banks give personal loans to pensioners?

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Personal Loans For Pensioners

 

When it comes to a personal loan, banks/NBFCs are very strict with the eligibility criteria.  Many banks do not prefer lending to citizens, who are over 60 years of age. But, pensioners and senior citizens too need money in a financial emergency. So, banks and NBFCs offer specialized personal loans for pensioners in India.

 

1. Pensioners get personal loans

 

Banks offer personal loans to retired Central and State Government employees. Defence pensioners can also avail the personal loan. This money can be used to meet a family obligation or a financial emergency.

Banks may charge a nominal processing fee of around 0.5% of the loan amount. Defence pensioners are exempted from paying the processing fees.

Retired Central/State Government employees can easily get a personal loan from the bank, where they draw the pension. You (pensioner), can easily repay the personal loan, over a tenure ranging from 2 to 5 years.

 

SEE ALSO: Financial Plans For Retirement Benefits

 

2. Eligibility criteria of personal loan for pensioners

 

  • Many banks specify that your age must not exceed 75-76 years.
  • If you draw your pension from the bank, you can easily avail the personal loan. Many banks demand that there should be no returned cheques, because of insufficient funds.
  • The minimum loan amount is around Rs 25,000, while the maximum amount can be 18 times the monthly pension, subject to a ceiling depending on the bank. Defence pensioners may enjoy a maximum amount, which can be 20 times the monthly pension.
  • Your spouse/children can be the guarantor of this loan. Some banks may accept a third-party guarantee.

 

What about collateral on personal loan for pensioners? The personal loan for pensioners is secured against the pension, which is a permanent source of income and banks can easily recover the loan dues. Your (pensioners) spouse is also eligible for the pension, and is called a family pensioner. Banks can easily recover the loan dues from the family pensioner.

 

SEE ALSO: 5 Financial Planning Tips For Housewives To Secure Their Future

 

3. What about the interest rate on pensioners personal loan?

 

Some banks charge an interest of MCLR + (2 - 2.6%). Banks could charge a pensioner around 11-13% a year as interest on pensioners personal loan. There is a GST of 18% on banking services and products. Be Wise, Get Rich.

See Also: Five Personal Mistakes To Avoid

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IndianMoney.com Research Team

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