7 Best Home Loans for Pensioners

Once you retire from work, you usually want a comfortable life, without too many obligations to meet. However, if you had been living in a home provided by your employer, your retirement might be the time when you ought to start looking for an ideal Home Loan. While this may seem like a daunting task, the fact is, numerous banks across India readily offer Home Loans to senior citizens.

Here’s the List of Top Home Loans available for Pensioners in India

Tip: Best Home Loan for Salaried Person before applying for a loan

Home Loans for pensioners are offered for the following purposes:

• Construction, renovation or repair of an existing house
• Construction, renovation or repair of a new house
• Purchase of a plot of land
• Purchase of a readymade house or flat 

Eligibility

In order to ensure that only deserving candidates benefit from such loans, a vast majority of banks adhere to the below-mentioned guidelines, before approving the Home Loan Application:

The pensioner should have served a reputed company, an education institution, or must have been in service with the central or state government, in a public sector undertaking (PSU), in the defence or a part of Voluntary Retirement Scheme (VRS).

Most banks entertain loan applications only from those pensioners who draw a pension from the same bank. However, some banks do offer the exception of approving loan applications of pensioners with pension accounts in other banks. In such cases, the banks may ask the applicants for post-dated cheques as a measure of ensuring security.

A large number of banks offer loans only to those pensioners who draw sufficient income. For instance, United Bank of India mandates a minimum pension of 5,000. Taking this into consideration, it wouldn’t be wrong to say – the higher your pension, the better are your chances of getting a swift approval. Moreover, your loan amount will heavily depend on your income. In this case, the higher your income, the higher you may expect your loan amount to be.

When it comes to age, some banks offer loans only to the applicants below the age of 75, while others have capped the limit to a maximum of 70 years.

That being said, it is important to understand that not all banks offer loan to pensioners. The reason behind this is simple. The tenure of Home Loans is usually long, and given the age of the pensioners, such a loan becomes a risky proposition. Hence, it is strongly advised that you get in touch with your bank, and understand their program, terms and conditions before filing your application.

Additional Info: Also Check Best Banks for Home Loan in India in 2024

Best Home Loan Provider in India for Pensioners:

State Bank of India – SBI Pension Loan

SBI Pension Loan is a type of personal loan that can be used by pensioners to fulfil any personal needs, including the purchase of a house. To Apply for a Home Loan in SBI, it is essential that you repay the loan amount before you reach the age of 76. You can avail loan amount of anywhere between Rs. 2.50 Lakhs and 14 Lakhs with repayment tenure of up to a maximum of 84 months. Loan amount and tenure depends on the age and pension income of the borrower. The loan comes with a processing fee of 0.50% of the loan amount (minimum Rs. 500 and maximum Rs. 2,500 + GST).

Documents Required

• Loan application form with passport size photographs
• Age proof
• Identity proof
• Pension documents
• Property documents

Eligibility Criteria

For Central & State Government Pensioners

• The applicant should be below the age of 76 years
• Pension payment order or PPO should be maintained with SBI
• The pensioner must furnish an irrevocable undertaking to not to amend their mandate to the Treasury during the loan repayment tenure.
• The Treasury has to give a written consent that it will not accept any request from the pensioner for transfer of their pension payment to any other bank untill an NOC is issued
• Guarantee by the spouse (who is eligible for family pension) or a suitable third party is required.

For Defence Pensioners

• Pensioners of Armed Forces (including Army/ Navy/ Air Force), Paramilitary Forces (including CRPF/ CISF/ BSF/ ITBP), Coast Guards, Rashtriya Rifles, and Assam Rifles are eligible.
• PPO should be maintained with SBI
• No minimum age limit under the scheme
• Maximum age at the time of loan processing should be below 76 years

For Family Pensioners

• Family pensioners, including authorized members of the family for receiving pension after the death of the pensioner, are eligible.
• Family pensioner should be under 76 years of age

Union Bank of India – Home Loan

Any resident Indian having a regular income source can avail this loan. There is no maximum loan limit for Union Bank of India Home Loan. The loan has to be repaid within 30 years or up to the age of 75 years, whichever is earlier. This loan comes at a processing fee of 0.50% of the loan amount (subject to a maximum of Rs. 15,000 + GST). 

Documents Required

• PAN card
• Loan application form
• 3 passport-sized photographs
• Identity proof: PAN card/ passport/ employee ID card/ any other valid document
• Address proof: Telephone bill/ electricity bill/ aadhaar card/ any other valid document
• Pension proof documents
• Property documents
• Last 12 months bank statements

Eligibility Criteria

• The applicant can be Indian citizen or NRI with regular source of income
• Minimum entry age is 18 years and maximum exit age is up to 75 years
• Applicant can apply singly or jointly with other co-applicants

South Indian Bank - Home Loan for Senior Citizens

If you wish for a higher loan amount, South Indian Bank Home Loan for Senior Citizens can prove to be a great alternative, as it offers loans of up to 25 Lakhs. Moreover, the repayment options offered by the banks are rather flexible. You can choose to repay the amount over a span of 15 years, provided that you do so before you reach the age of 75 Years. The processing fee for the loan is 0.25% of the loan amount.

Documents Required

• Loan application form
• passport-sized photographs
• Identity proof
• Address proof
• Pension proof documents
• Property documents

Eligibility Criteria

• Applicants must be drawing pension from state or central government banks/ insurance companies or through other reputed companies and must have completed the age of 55 years.
• Maximum quantum of loan permitted is up to Rs. 25 Lakhs or 50 times of monthly pension drawn at loan application, whichever is less. The EMI should not exceed 50% of the monthly pension drawn.
• Minimum margin required is 30% (in case of purchase of old house or renovation of an existing house) and 25% (in case of construction of a new house, purchase of land & construction of new house, purchase of a ready built house or flat).
• If spouse is alive they should join the documents as guarantor

LIC HFL - Home Loan for Pensioners

LIC Housing Finance Limited is one of the trusted names in the industry. There are different home loan products for the seniors (before retirement) and the pensioners (after the retirement). The Home Loan for pensioners can be borrowed for the amount as per eligibility and pension income. The amount can be used for purchase, construction, or extension of House / Flat. The loan can be borrowed for up till 70 years of age. You will require a guarantor to avail of the LIC HFL Home Loan.

Additional Info: Also check How to Apply for Pradhan Mantri Awas Yojana

Documents Required

• Loan application form
• passport-sized photographs
• Identity proof
• Address proof
• Pension proof documents
• Property documents

Eligibility Criteria

• Loan amount can be used for purchase/ construction/ extension of House/Flat
• Pensioners with a stable income from pension may apply for this loan
• Commutation of Pension/ any portion thereof is not permitted under this scheme
• A Guarantor (who is acceptable to the Company) is required
• The loan must be repaid before the applicant turns 70 years of age

Bank of Maharashtra – Maha Super Housing Loan Scheme

Bank of Maharashtra offers housing loan scheme for pensioners for the purchase of a plot and construction thereon, construction/ acquiring of a new or existing house/flat and extension of an existing house/flat, and for repairs/ renovation/ alteration to an existing house/flat. Maximum repayment tenure allowed is up to 30 years or borrower reaching the age of 75 years, whichever is earlier (depending on the purpose of acquiring the loan). The loan comes at a processing fee of 0.25% of the loan amount (maximum Rs. 25,000) and documentation charges of 0.10% of the loan amount (maximum Rs. 10,000).

Documents Required

• Loan application form
• passport-sized photographs
• Identity proof
• Address proof
• Pension proof documents
• Property documents

Eligibility Criteria

• Pensioners should have pension account with the Bank of Maharashtra with sufficient disposable income.
• Minimum entry age is 21 years and maximum exit age is 75 years

Indian Bank – IB Home Loan and IB Home Advantage

Pensioners having adequate income to repay the loan can Apply for Indian Bank’s IB Home Loan and IB Home Advantage. The repayment tenure of both the loans is up to 30 years or up to the age of 70 years, whichever is earlier. The processing fee is communication at the time of loan application.

Documents Required

• Completed loan application form
• 3 passport size photographs
• Proof of identity: PAN Card/ Aadhar card/ Voter’s ID/ Passport/ Driving License
• Proof of residence: Telephone Bill/ Electricity Bill/ Passport/ Property Tax Receipt/ Aadhar card/ Voter ID.
• Proof of pension
• Proof of other income like rent, interest on investment, etc. (if any)
• Agreement of Sale or Sale Deed
• Approved Building Plan
• Proof of title in the Revenue Records
• Title Deed Documents for 13 years or 30 years (as the case may be)
• Property Tax receipts (wherever applicable)

Eligibility Criteria

• Pensioners with adequate income source to service the loan can apply
• Minimum entry age is 18 years and maximum exit age is 70 years
• Any 2 of the 4 (CIBIL/ EXPERIAN /CRIF HIGHMARK/ EQUIFAX) reports to be obtained & verified to ascertain applicant’s past credit history.
• Property in concern should be insured at borrower`s cost with the bank clause against fire, flood, earthquake, riot & other risks.

United Bank of India – United Housing Loan for Pensioners

United Bank of India offers housing loan for pensioners to fulfil their housing related needs.  The loan amount cn be utilised for renovation, extension, repair, furnishing of self-occupied house/ flat, or purchase/construction of a new house/ flat. Maximum loan amount offered is Rs. 10 Lakhs.

Additional Info: Also Check DDA Housing Scheme

Documents Required

• Loan application form
• Passport size photographs
• Proof of identity
• Proof of residence
• Proof of pension
• Property documents

Eligibility Criteria

• All pensioners of Central/ State Governments, Central/ State Governments’ Undertakings, Defense Services, Educational Institutions (Universities, Institutes, Schools, Colleges), Reputed Companies, including pensioners (VR & VRS) of United Bank of India can apply.
• Monthly Net Pension of the applicant should be minimum Rs. 5,000
• Maximum age of the applicantat the time of availing loan should be 70 years
• Maximum loan amount available is Rs. 10 Lakhs, provided total the deduction including EMI of the new loan must not exceed 40% of applicant’s net monthly pension.
• If applicant’s spouse joins as co-borrower and if they are also pensioner drawing pension from United Bank of India branch, pensions of both will be considered for determining the quantum of loan.
• Entire loan amount must be repaid before the borrower attains 75 years of age

Benefits of Home Loan for Pensioners

• Sense of achievement on purchasing your own house
• Security for your kid’s future
• Low rate of interest, processing fee, and other charges
• Tax benefits of Home Loan
• Acquiring an asset is always useful
• Owned property can be rented out for additional income during old age
• Property can be mortgaged to obtain reverse mortgage loan to live your rest of the life peacefully.

Additional Info: Check 30 Lakh Home Loan EMI Apply Online.

FAQs - Home Loan for Pensioners

✅ Can a pensioner get a loan?

Yes, you can apply for the Personal Loan & Loan Approval depends on your Eligibility Criteria. Most banks consider loan applications only from the self banks Pension account. However, some banks & NBFC offer Home Loan to all pensioners for minimum loan tenure.

✅ What Is a prepayment fee?

If you repay the home loan before the completion of the tenure, you have to pay a certain fee applicable to your lender which is known as a prepayment fee. The prepayment fee usually varies from 2-3% depending on the lender which you have chosen.

✅ What Is a processing fee?

A processing fee is a charge which you have to pay to your lender once your home loan application gets approved. It is a one-time fee that you have to pay to your lender.

✅ What are the documents required to apply for a home loan for Pensioner?

Pensioners are required to submit the following documents for availing home loan:

• 1 – 3 passport size coloured photograph
• Photo Identity Proof: Driving License/Passport/PAN/Voter ID/Aadhaar Card
• Residence Address Proof:  Registered Rent Agreement /License/ Utility Bill/ Aadhaar Card
• Age Proof: Passport/ Aadhaar Card/ PAN Card
• Income Proof:  Receipt of pension returns/ Pension Certificate/ Bank Statement showing the proof of pension getting credited.

✅ Do I require a guarantor to get a home loan for pensioner?

No, you don’t need any guarantor for availing a pensioner home loan.

✅ What should be my age to avail home loan for pensioner?

Some banks offer Home Loan to Pensioners below the age of 75, while others have fixed the limit to a maximum of 70 years. However, with the Bank of Baroda, you can conveniently repay the loan amount till you reach the age of 77-78 years.

✅ How much loan amount can I get under home loan to pensioners scheme?

You can get a maximum loan amount of up to Rs. 25 Lakhs (at South Indian Bank) under the scheme, depending on your repayment capacity.

✅ What is the maximum repayment tenure available for home loan to pensioners?

You can get maximum repayment tenure of up to 25 years for the Pensioners Home Loan scheme, depending on your age, repayment capacity, and other factors.

Additional Info: Also check SBI Home Loan EMI Calculator

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