Getting a Personal Loan after you retire is not easy. However, there are banks that offer Personal Loans to pensioners. Here are the details.
Banks typically look at your Credit Score, your other loans and your income details before granting Personal Loans. So, a person who is already in a job is more likely to get a loan when compared to someone who is retired. But there are banks that have exclusive Personal Loan schemes for pensioners. Read on to know more about these loans.
SBI Pension Loan
State Bank of India (SBI) offers Personal Loans to retired employees of the Central or State Government of India. The loan is extended to defence pensioners. Family pensioners can also apply for this loan.
Features of SBI Pension Loan
Eligibility: The criteria are that the pensioner should be drawing a pension from one of the SBI branches and should not be more than 76 years old.
Purpose: The loan can be taken to meet any financial need or family obligation.
Processing Fees: There are no processing fees charged for defence pensioners. Nominal fees are charged for others who apply. The loan is processed without any other hidden charges.
Loan Limits: The minimum loan amount is Rs.25, 000. The maximum loan that govt. pensioners and defence pensioners who are up to 72 years can avail is Rs. 14 lakh. Those who are between 71 years and 74 years can get up to Rs. 12 lakhs and it will be Rs. 7.5 lakhs for those who are aged between 74 and 76 years. For family pensioners, the maximum limit is Rs. 5 lakh. The ceiling will be 18 months pension amount.
Repayment: The loan has to be repaid through standing instructions set to debit the pension account with the Equated Monthly Installment (EMI) amount on the set date.
Additional Reading: Personal Loans That Give You Tax Benefits
Margin: There is no margin for SBI pension loan.
Guarantor: Third party guarantee has to be given by the spouse who is eligible for the family pension. In case the spouse is absent, then any other family member or third party of worth can be a guarantor.
Interest Rate: The interest rate offered on the SBI Pension Loan is 3.35% above 2-year Marginal Cost of Lending Rate (MCLR). Currently, the rate of interest is 11.6% per annum (as on 12th March 2018).
Central Bank of India Pensioner Personal Loan
Central Bank of India offers Personal Loans for pensioners to meet any genuine financial need. All those who draw pension or family pension can apply for this loan.
Features of Central Bank of India Personal Loan
Eligibility: The criterion is that the pensioner should be drawing a pension from one of the Central Bank of India branches. Those who are getting a direct credit of pension from the defence pension disbursing office can also apply.
Purpose: The loan can be taken to meet any financial need or family obligation.
Processing Fees: The processing fee is usually Rs. 500 plus taxes.
Loan Limits: The maximum loan that pensioners up to 75 years can draw is capped at Rs. 5 lakhs or 18 months pension amount. Those who are more than 75 years old can get up to Rs. 2 lakhs or 12 months pension amount.
Repayment: The loan is usually repaid in 48 EMIs.
Margin: There is no margin for Central Bank of India Personal Loan for pensioners.
Guarantor: A guarantor might not be required.
Additional Reading: All About Pre-Approved Personal Loans
Interest Rate: The interest rate offered on Central Bank of India Personal Loan for pensioners is 3% above 12 months MCLR. Currently, the rate of interest is 11.3% per annum (as on 12th March 2018).
BOI Star Pensioner Loan Scheme
All pensioners or family pensioners and retired employees can opt for Bank of India’s (BOI) Star Pensioner Loan.
Features of BOI Star Pensioner Loan
Eligibility: The criterion is that the pensioner should be drawing a pension from one of the BOI branches. Those who are getting a direct credit of pension from the defence pension disbursing office can also apply.
Purpose: The loan can be taken to meet marriage, medical and education expenses of self, children, spouse or relatives. It can also be taken to repair or renovate existing home. If it is secured using an asset, the loan can be taken for repayment of an existing Home Loan or purchase of consumer durables or professional equipment.
Processing Fees: There are no processing fees for senior citizens. Other applicants might have to pay 2% of the loan amount as processing fees. The minimum will be Rs. 500 and the maximum will be Rs. 2,000. Stamp duty charges and loan agreement copy charges might be applicable.
Loan Limits: The maximum loan that pensioners up to 75 years can draw is capped at Rs. 5 lakhs or 15 months pension amount. Those who are more than 75 years old can get up to Rs. 1 lakh.
Repayment: The loan is usually repaid in 36 EMIs if it is an unsecured loan and 60 EMIs if it is a secured loan.
Additional Reading: 9 Paperless Approval Personal Loans Available On BankBazaar
Margin: There is no margin for BOI Star Pensioner Loan.
Guarantor: A guarantor might not be required.
Interest Rate: The interest rate offered on BOI Star Pensioner Loan is 2.5% above 1 year MCLR. Currently, the rate of interest is 10.8% per annum (as on 12th March 2018).
Even though a pensioner’s Credit Score might not be scrutinised keenly, it is best to check your Credit Score to ensure that it’s not very low. Also, your pension account might be debited once you apply for the loan so you might have to keep adequate balance in your account.