A personal loan for pensioner is a customised loan for those who are above 60 years of age and get a regular pension. This multipurpose loan can be used for fulfilling a variety of financial requirements. The best part about personal loan for pensioners is that you don’t have to keep anything as collateral for this loan as they are backed by monthly pension withdrawals. However, such a loan might require a third-party guarantee for approval.
What are the Features of a Pensioner Loan?
Below are a few of the distinctive features of the pensioner loan:
- This loan is intended for those who are actively getting a pension amount every month.
- Both non-banking financial institutions and banks offer such a type of loan.
- The documentation process is easy and hassle-free.
- The loan is processed quickly and can also be availed online.
Who is Eligible for a Personal Loan as a Pension Holder?
If you wish to apply for a personal loan as a pensioner, you must fulfil the following eligibility criteria:
- You must be an Indian resident.
- Your age can be up to 65 years at the time of your loan maturity.
- Your per-month income must not be less than 20,000 INR. However, if you are a resident of Delhi or Mumbai, your monthly income or pension must not be less than 25,000 INR.
- If you apply for a loan for a retired person above the age of 75 years, the maximum tenure granted is 24 EMIs.
Documents Needed to Apply for a Personal Loan for Pensioners in India
While applying for a personal loan for a retired person, you need to fill in an application form and submit it with the required documents to the lender for loan approval. Here are the documents that you will need:
- Pension proof: This includes your bank statement for the past six months showcasing the pension being credited to the account of the beneficiary.
- Residence proof: This includes a copy of your property documents, rental agreement (if applicable), Aadhaar card, driving licence, etc.
- Identity proof: This includes a copy of your PAN card, passport, driving licence, and Aadhaar card.
- Other documents: Borrower’s recent photograph, a PAN card, and an Aadhar card.
Personal Loan for Pensioners: Application Process
To apply for personal loan for pensioners, you can visit the official website of the bank where you receive your pension and apply for personal loan. You can also choose trusted, private lenders to apply for a loan.
On the other hand, some may provide offline loans for which you need to go to the provider’s branch and apply for the same. Once you’ve applied for the loan, the provider will process your loan application. If the application is verified, your loan will be approved.
What Benefits can Pension Holders Enjoy with a Personal Loan?
There are multiple benefits to applying for personal loan for pensioners in India; some of which are listed below:
- Senior citizens can benefit from the flexible repayment period. This implies that you’ll have less stress and will be able to manage your payments.
- The processing fee on a pensioner loan is comparatively low
- Since there is the backing of a co-applicant or guarantor, there are higher chances for the personal loan for pensioners to get sanctioned.
- The rate of interest depends on the age of the pensioner, varying among applicants who are younger or older than 70 years. Generally, the rate of interest is not too high.
What to Know when Applying for a Personal Loan for Retired Person?
Here are the prerequisites to applying for a personal loan for pensioners:
- The loans are always approved in exchange for a guarantee or security.
- Some loan providers might also take a retired borrower’s health status into consideration.
- Banks levy 18% GST on all expenses and services related to pension loans.
- Pension receivers must show documentation of their pension every month.
When applying for a personal loan against a pension, you can apply for loans for pensioners online and offline, whatever medium is convenient for you. While applying for this loan, keep all the essential documents handy to have your loan sanctioned in no time. The application process for the pensioners’ loan may differ based on the loan provider you choose. Since it is a multipurpose loan, one can apply for this for personal use or during an emergency and repay it in affordable instalments.