Complete Guide on Personal Loans for Pensioners

Unexpected expenses to be met post-retirement? Be it a marriage in the family, medical contingencies or any other financial emergencies personal loans for pensioners is the ideal financial product offered by various banks. These are short-term unsecured loans and can be used for any purpose. They also allow you to plan your dream vacation. The personal loans do not require any collateral but the difference arises in their interest rates in comparison to the other loans.


Features and Benefits of Personal Loans for Pensioners


The personal loans for pensioners offered by various public and private sector banks have various features and benefits.

  1. These types of loans are generally short-term and can be used to meet any financial need.
  2. Like other loans, the applicants are not required to submit any collateral or security of any kind.
  3. The loan is granted on the basis of the repayment capacity of the applicant.
  4. Most of the banks have a very quick and easy documentation process in place. This makes it a hassle-free process for the applicant.
  5. The loan amount that one can apply for can range from Rs50,000 to Rs.30 lakhs.
  6. Banks offer easy repayment options in the form of equated monthly instalments.
  7. The loan tenure can be fixed depending upon the applicant’s repayment capacity and can be anything between 1year to 5 years.


Top 5 Personal Loans for Pensioners in India


Retired people generally find it difficult to apply for a personal loan as the banks consider it a risk. There are many factors that influence the decision like they may not be able to repay with age being a criterion. But many of the retired folks today are drawing good pensions courtesy banks offering the best pension plan for a stable retirement. Today there are various tools like a pension calculator that helps you estimate the expected pension amount. This makes planning to apply for a personal loan easier.


SBI Pension Loan: The bank has some of the best plans to offer personal loan for pensioners. The minimum loan amount that you can apply for Rs 250000 and can go up to a maximum limit of 14 lakhs. The eligibility of the applicant will be determined depending upon the pension scheme they are a part of. Also depending upon if you are a regular pensioner or a family pensioner or a defence pensioner the loan limit may vary accordingly. The repayment could be done by providing instructions to the bank to debit the EMI instalment from the online pension account.


Central Bank Pension Loan: A pensioner can apply for the highest loan amount of 5 lakhs from Central Bank. This is subjected to a pensioner being 75 years of age or below and is entitled to a maximum of 18 months pension. Those who are 75 and above with a maximum of 12 months pension stand to receive a maximum loan amount of two lakhs. Hence one can apply for a personal loan subjected to your pension plan.


PNB Pension Loan: The minimum personal loan that one can apply is Rs25000 while the maximum limit depends upon the age of the applicant. Up to 70 years it is 10 lakhs, above 70 and below 75 years it is 7.5 lakhs while the pensioners who are above 75 years are entitled only for a maximum loan amount of 5 lakhs. Repayment has to be done in the maximum of 60 EMI’s but if the applicant is 75 and above it comes down to 24 EMI’s.


Bank of Baroda Pension Loan: Regular pensioners can get a maximum loan amount ranging from 8 lakhs to 5 lakhs. While family pensioners are eligible for a maximum loan ranging between 1.5 lakhs to 3 lakhs. The eligibility and repayment criteria will depend upon the age of the pensioner and also the pension scheme.


BOI Star Pensioner Loan Scheme: The maximum loan limit offered by the Bank of India is up to 18 times the monthly pension. But the exact amount is decided to depend upon the type and age of the pensioner. One can visit the bank’s website for more details. Another important criteria followed by the bank is that the applicant has to have a net take home of at least 40%. With some of the best pension plan available to choose from this could be easily achievable.


Documents Required for Pensioner Personal Loan


  1. Photo identity proof like a passport, PAN card or Voter ID.
  2. Address proof which can include any of the above documents or latest utility bills.
  3. One passport size photograph and age proof document.
  4. Income proof which can be a statement of the online pension
  5. Some banks would require the applicant to submit the life certificate form for pensioners as well. A life certificate form for pensioners is nothing but a document stating that the applicant was alive during the creation of the certificate.

Top 5 Personal Loans for Pensioners Interest Rates

Bank Interest Rate
State Bank of India (SBI) 13.05% per annum
Central Bank of India 11.70% per annum
Punjab National Bank (PNB) 2.60% + MCLR
Bank of Baroda (BOB) Base Rate + 2% per annum
Bank of India (BOI) 2.00% + BSS (0.30%) over 1 Year MCLR




Fees and Charges for Applying for Personal Loans

  1. SBI charges a nominal processing fee that amounts to 0.50% of the loan amount plus tax. The fee is waived off for defence pensioners.
  2. There is no processing fee charged for personal loans applied from Central Bank of India.
  3. PNB charges an amount of 500 plus GST as documentation charges and there are no separate processing charges.
  4. Pensioners are family pensioners of Bank of Baroda are not required to pay any processing charges. While for other pensioners a fee of Rs1000 is applicable.
  5. Bank of India charges a processing fee amounting to 2% of the loan amount. There are an extra stamp paper and loan agreement charges as well. Pensioners 60 years and above are exempted from this.


Personal loans are great financial tools to meet unexpected financial crisis or plan a holiday post-retirement. Depending upon your pension plan you may apply for a personal loan from various banks. This is subjected to the fulfilment of eligibility criteria.