We all need money. Sometimes, as our expenses increase, we need it more than we would have otherwise. Unfortunately, expenses come unannounced and doesn’t bother to ask our age. Thus, it is very disheartening to see lenders not lend capital to pensioners or aged people.

While there are number of lenders offering personal loans, its true that pensioners may find it difficult to get a loan for themselves. This is because banks or non-banking financial companies (NBFCs) consider older folks a greater risk (vis-à-vis younger individuals who are still in the workforce) and are more reluctant to lend to them.

Despite this, retired individuals, who receive a pension are relatively favoured over aged people with no pension.

Before we go any further, we must first understand the concept of family pension as they, too, enjoy good eligibility for personal loans. Family pension is defined as a regular monthly amount payable by an employer to a person belonging to the family of an employee in the event of the employee’s death. Pension and family pension are qualitatively different. The former is paid during the lifetime of the employee while the latter is paid on his/her death to surviving family members.

Here are a few banks that offer personal loans to pensioners with good benefits:

1. SBI pension loan

Processing fees: This loan doesn’t charge any processing fees for defence pensioners. Nominal fees are charged otherwise. The processing fees amount to 0.50% of the loan amount plus tax, subject to a minimum of Rs. 500 plus tax. The loan is processed without any other hidden charges.

Loan limit: Minimum loan amount sanctioned is Rs. 25,000 and the upper limit depends on the applicant’s age and pension drawn. Do note that the loan amounts varies between regular pensioners, defence pensioners and family pensioners. The maximum loan amount sanctioned, however, is Rs. 14 lakh.

Repayment: You can repay the loan via standing instructions to debit the EMI amount from the pension account on the payment date.

Margin: There is no margin set for the SBI pension loan.

Guarantor: A spouse who is eligible for the family pension must stand as guarantor for this loan. In case the spouse is absent, then any other family member or third party of worth can stand as guarantor.

Interest rate: The interest rate offered on the SBI Pension Loan is 3.80% above 2-year MCLR. The current rate of interest is 13.05% per annum.

Eligibility for SBI pension loan:

For retired central and state government employees:

- Pensioners should not be over the age of 76 years - Pensioners should be drawing their pension through any SBI branch - Pensions should be disbursed by Government Treasuries

For defence pensioners:

- Pensioners of the armed forces, Army, Navy, Air Force, Paramilitary, Rashtriya Rifles and Assam Rifles and Coast Guards are eligible - The pension payment order should be with SBI - There is no minimum age limit, but the maximum age is 76 years

For family pensioners:

- Spouse who is authorized to receive the pension after the death of the pensioner - The family pensioner should not be over 76 years of age

2. Central Bank of India pension loan

Processing fees: No processing fees charged.

Loan limit: Pensioners who are 75 years and below, can get a maximum of 18 months’ pension. The highest loan amount available is Rs. 5 lakh. For pensioners above the age of 75 years, a maximum of 12 months’ pension is granted, subject to a maximum of Rs. 2 lakh.

Interest rate: The interest rate is currently at 11.70% per annum. This is calculated as the base rate + 2%. A concession of 50 basis points in the interest rate may be offered to spouses of pensioners who are drawing a family pension.

Eligibility of CBI personal loan for pensioners:

- Pensioners or family pensioners who draw their pension through any Central Bank of India branch

- Pensioners who receive their pension from Treasury or the Defence Pension Disbursing Office as a direct credit to their savings account held at any branch of Central Bank of India

- Pensioners or family pensioners receiving pension from Central Bank of India

3. PNB personal loan scheme for pensioners

Processing fees: There are no processing fees charged. There is a fee of Rs. 500 + GST applicable as documentation charges.

Loan limit: The minimum loan amount sanctioned is Rs.25,000. The upper limit depends on the applicant’s age and pension drawn.

Repayment: The loan must be repaid in maximum 60 EMIs. For pensioners above the age of 75 years, the maximum tenure granted is 24 EMIs. The repayment will be calculated on the basis of the net monthly pension so that all deductions including the loan EMI does not exceed 50%.

Margin: There is no margin set for the Punjab National Bank personal loan for pensioners.

Guarantor: The spouse who is eligible for the family pension must stand as guarantor. If the pensioner has a child who is earning (preferably employed by the Government), the child can stand as guarantor. Third party of net means enough to cover the loan amount can also stand as guarantor.

Interest rate: The interest rate offered on PNB personal loan for pensioners is 2.60% above the MCLR.

Eligibility criteria for PNB personal loan for pensioners:

- All pensioners who are drawing their pension through any Punjab National Bank branch are eligible to apply for a personal loan.

4. Bank of Baroda loan to pensioners

Processing fees: For pensioners and family pensioners of Bank of Baroda, there are no processing charges. For others, Rs. 1,000 is applicable as processing fees.

Loan limit: Bank of Baroda offers loans up to 18 times the monthly pension. The maximum loan amount available depends on the type of pensioner and the age of the pensioner.

Interest rate: The interest rate charged on this loan is the base rate + 2% per annum. For retired employees of Bank of Baroda and their family pensioners, the loan is granted at base rate.

Repayment: For regular and family pensioners, the repayment period depends on the applicant’s age. For an applicant up to 70 years of age, the maximum tenure granted is 60 months and for those above the age of 70 years, the maximum tenure granted is 36 months.

Eligibility criteria for BOB loan to pensioners:

- Pensioners or family pensioners who draw their pension through any Bank of Baroda branch

- Pensioners who receive their pension from Treasury or the Defence Pension Disbursing Office as a direct credit to their savings account held at any branch of Bank of Baroda

- Pensioners or family pensioners of Bank of Baroda

- Pensioners should not be more than 75 years of age

- Pensioner should be drawing the pension from a Bank of Baroda branch for at least 3 months with satisfactory conduct. There should be no returned cheques due to insufficient funds.

5. BOI star pensioner loan

Processing fees: There are no processing fees for pensioners who are 60 years and above. For all others, a one-time processing fee of 2% of the loan amount is applicable. The processing charges are subject to a minimum of Rs. 500 and a maximum of Rs. 2,000. Stamp paper and loan agreement charges are also applicable.

Loan limit: Bank of India offers loans up to 18 times the monthly pension. The maximum loan amount available depends on the type of pensioner and the age of the pensioner.

Interest rate: The interest rate charged on this loan is 2.5% + one-year MCLR. If the applicant offers liquid security, that is money in cash, exceeding 25% of the loan amount, an additional interest concession of 1 basis point (0.01%) will be granted.

Repayment: For unsecured loans, the maximum EMIs granted is 36. In exceptional cases, 60 months may be granted. For secured advances, the maximum EMIs is 60.

Eligibility criteria for BOI star pensioner loan

- Regular pensioners drawing their monthly pension through a Bank of India branch.

- Family pensioners drawing their monthly pension through a Bank of India branch.

- Retired employees of Bank of India not including dismissed or compulsorily retired employees.