Personal Loan For Pensioners - Personal Loan Blog - Tata Capital

Personal Loan For Pensioners

Feb 28, 2017

People think that with old age, managing finances become tough. This might be true to an extent as when a person crosses the age of 60, the only fixed source of income that remains is pension (unless the person has a huge corpus of financial assets generating robust interest income or dividend stream).

So with lower income post retirement, it's possible that the pension a person gets might not be sufficient for meeting out sudden and unexpected expenses. This is where pensioners can consider taking personal loans for pensioners.

Many lenders have launched personal loan schemes especially for senior citizens who are getting regular pensions. Under these schemes, all pensioners of Central and State Governments, Central and State Governments' Undertakings, Defense Services, reputed Companies, Educational Institutions, etc. are eligible for getting loans against pension. The end use of the money is also not restricted by the lenders.

It is worth noting that pensioners generally get personal loans at rates lower than what younger borrowers have to pay. But then, personal loans are only available upto amounts equal to 12-18 times of the monthly pension. Since personal loans are generally collateral free and in case of pensioners, the income source is also small, lenders may seek collateral security depending on individual case to case basis.

Repayment is fixed such that the loan tenure gets over before the borrower cross the age of 75. Generally, the loan tenure is 12 to 60 months, within the restriction of borrower crossing 75 years of age. EMI is linked to the pension account and monthly debits are made from the same.

As it is clear from above, it is not that lenders are not willing to give personal loans to pensioners. Ofcourse the amount available and tenure might be lesser than regular personal loans. But that should not be a deterrent in case pensioner's money needs are not large.