Can we take personal loan for pensioners? A question that haunts many, given that life can throw a curveball at you regardless of your age. Handling a crisis is partly psychological but mostly financial. Unfulfilled bucket lists, increasing costs of lifestyle & medical expenses, or unforeseen circumstances, usually knock on the door of a senior’s bank account. That is when they look at alternative sources of funds to cope with challenging situations.
A senior citizen loan as a concept is slowly growing in India. Financial institutions and lenders realise the importance of immediate cash for golden-agers. Still, most of them view lending to elders as a risk because of unstable incomes.
Additional Read: – How to Check if You Are Eligible for a Personal Loan?
However, pensioners, with a source of stable revenue or assets, can avail financial assistance. This power is often unrecognised due to lack of knowledge of such amenities, or terms that follow.
Important points to be kept in mind if you are considering taking personal finance
If an individual receives a pension from the Central, State, or any government recognised body, he/she may apply for the loan. Income in the form of payments by a previously employed private company or withdrawal of amount from a deceased spouse or family member also counts.
Remember that personal loan interest rates are lesser compared to other sources of finance, such as credit cards. So, if you have a stable pension, it is better to avail of this loan rather than accumulating credit card debt.
Personal loans don’t require you to pledge collaterals, meaning you don’t need to guarantee your house or a piece of land at the time of application. This is a huge benefit as nobody in their golden years wants to keep their property as collateral.
The time taken to repay the principal and interest amount of such a loan resembles that of a regular loan, which could be 12 to 60 months. However, the actual repayment period varies from a lender’s guidelines and schemes.
Adequate equity and credit history of the applicant also plays a significant role in determining the period of repayment. You can accurately calculate your EMI along with your tenure using an online personal loan EMI calculator.
Rates of interest
Interest rates for personal loans for senior citizens are not fixed. They are determined by the applicant’s age, scores, policies applicable by the lending institution.
Additional Read: – How to Choose the Best Personal Loan for Needs?
The bottom line
Easier application processes, minimum documentation, and relaxed personal loan eligibility criteria are some of the benefits of obtaining personal loan for pensioners in India. Choices of tenure, principal, and security are often at the disposal of the applicant.
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