Best Personal Loan Providers for Pensioners in India

A Personal Loan is essentially a multipurpose credit that one can avail to meet one or more financial obligations. In a vast majority of cases, Personal Loans are unsecured, implying that as a borrower, you need not offer any collateral to the lender, in exchange of the loan amount. Not only does this aspect help you revel in the pleasure of being the sole owner of your assets, but also fastens the loan application and disbursal process.

However, you must understand that the absence of this collateral increases the risk proposition for the lender. In this situation, to be assured of your willingness and ability to repay the loan, most lenders rely on your credit score, the source of employment as well as current income.

Of course, when you get retired and are living off of pension, you virtually have no source of employment and the influx of money also becomes limited. So, what should you do, if you still need a loan to say sponsor your child’s higher education, or pay for some urgent medical expenses, or even remodel your home to suit your changing needs? Well, you can now opt for some of the most reliable Personal Loans for Pensioners.

Don’t know where to look for these? Well, we have got your back. Here is a list of the best 8 Personal Loan for Pension Holder providers in India!

Table of Contents: Best Personal Loan Providers for Pensioners

• Top 8 Personal Loan Providers for Pensioners in India
• Details of Top 8 Personal Loan Providers for Pensioners in India
• Fees and Charges of Senior Citizen Personal Loan
• Pension Loan Schemes
• Quick and Easy Loans for Pensioners
• Benefits of Personal Loan for Pensioners
• Personal Loan for Pensioner FAQs

Top 8 Personal Loan Providers for Pensioners in India

Details of Top 8 Personal Loan Providers for Pensioners in India

1. SBI Pension Loan - State Bank of India

When it comes to offering loans to retired employees of the government or that of the defence department, SBI personal loan for pensioners does the job just right. Here are some aspects that you need to know in the context of this much sought after loan:

Loan Amount: Ranges from Rs. 25,000 to Rs. 14 Lakhs for SBI Pension Loan, primarily depending on your pension as well as your age.

SBI Pension Loan Interest Rate

SBI Pension Loan interest rates start from as low as 9.75% and go up to a maximum of 10.25% per annum, depending on the loan amount and borrower’s repayment capacity.

Repayment Tenure: Up to 84 months, depending on the loan amount and age of the applicant.

Processing Fees: 1% of the loan amount (minimum Rs. 1,000 and maximum Rs. 10,000) + GST. The bank does not levy any processing charges for SBI Defence Pension Loan.

Documents Required:

• Identity proof
• Age proof
• Pension payment order maintained with SBI
• An irrevocable undertaking to not to amend the applicant’s mandate to the Treasury during the loan tenure.
• Written consent by Treasury that it will not accept any request of the pensioner to transfer their pension payment to any other bank until a NOC is issued.

SBI Pension Loan Eligibility:

 To be eligible for SBI pension loan, you have to be aged below 76 years. Below are the detailed eligibility criteria:

• In order to avail this loan, the applicant who was a state or central government employee before retirement, must be less than 76 years of age, and must be drawing a pension from an SBI branch, which is being disbursed by the concerned government treasury.For ex-defence personnel to avail this loan, they should be drawing a pension from the Army, Navy, or the Air Force. Pensioners of Rashtriya Rifles, Assam Rifles, and Paramilitary are also eligible for this loan, along with those who worked as coast guards. Again, the pension payment order of the personnel should come from SBI, for them to qualify for this loan.
• In case of the spouse or children of an eligible pensioner wanting the loan, they must be authorised to receive the pension, and should not be more than 76 years of age, while applying for the loan.
• EMI/NMP ratio should not exceed 33% for Family Pensioners and 50% in all other types of Pensioners.

Eligibility for Central and State Govt Pensioners

Eligibility for Defence Pensioners

Eligibility for Family Pensioners

2. Cent Pensioners - Central Bank of India

As is the case with SBI Pension Loans, even Central Bank of India Personal Loans for Pensioners are only offered to those pensioners who get their pension through the bank. Even in this case, the authorised family member of the pensioners is also deemed eligible for the loan.

Some of the aspects of Cent Pensioners loan that you must be aware of, are:

Loan Amount: Up to 18 times the monthly pension, subject to a maximum of Rs. 10 Lakhs.

Central Bank of India Pension Loan Interest Rate: 8.45% per annum

Repayment Tenure: Up to 5 years

Documents Required:

• Loan application form – duly filled & signed
• Proof of pension being credited regularly
• Age proof
• Identity proof

Eligibility Criteria:

• Pensioners or Family Pensioners who are drawing pension through any of Central Bank of India’s branches, including Central Bank of India’s ex-staff.
• Pensioners whose pensions are getting disbursed through Treasury or DPDO (Defence Pension Disbursing Office) directly to their savings accounts with Central Bank of India branches are also eligible.

3. Personal Loan Scheme for Pensioners - Punjab National Bank (PNB)

To qualify for this PNB Pension Loan, it is essential that you are drawing your income from one of the numerous branches of Punjab National Bank (PNB). The loan comes with zero processing fees. Here are some aspects about this highly sought after loan-

Loan Amount: A minimum of Rs. 25,000 and a maximum of up to Rs. 10 Lakhs for PNB personal loan for pensioners and defence personnel below the age of 70 years. The maximum loan amount for eligible pensioners in the age range of 70 to 75 years is Rs. 7.50 Lakhs, while that for the pensioners above the age of 75 is up to Rs. 5 Lakhs. The maximum loan amount is completely dependent on the pension being drawn by the applicant.

PNB Pension Loan Interest Rate: PNB Personal Loan Scheme for Pensioners come at very affordable interest rates starting at just 9.30% p.a. for Term Loan as well as Overdraft Facility.

Repayment Tenure: Maximum 60 EMIs (24 EMIs for pensioners aged above 75 years).

Documents Required:

• Age proof
• Address proof
• Agreement of guarantee
• Pensioner`s Portion of PPO in original
• Letter of authority (duplicate) in case of DPDO Pensioners
• Letter of request cum sanction letter for personal loan advance for pensioners
• Letter of Authority
• Promissory Note

Eligibility Criteria:

• All types of pensioners who are drawing their pension through PNB branches
• The guarantee is to be obtained of the spouse who is eligible for family pension OR earning children (preferably government employee) OR third party guarantee with income equal or more than the loan amount.

4. BOI Star Pensioner Loan Scheme - Bank of India (BOI)

This personal loan for senior citizens is available for pensioners and their authorised family members, who are drawing their pension from one of the Bank of India branches across India. If you want a Bank of India pension loan apply online. 

Loan Amount: Pensioners can get up to Rs. 10 Lakhs as loan amount under Pension Loan Bank of India, depending on their age and pension income.

BOI Pension Loan Rate of Interest: 9.35% per annum

Repayment Tenure: Up to 60 months

Processing Fees: 2% of the loan amount, minimum Rs. 500 and maximum Rs.2,000. Nil for senior citizens (60 years & above).

Documents Required:

• Age proof
• Address proof
• Pension proof
• Other documents as required by the bank

Eligibility Criteria:

• Regular pensioners/ family pensioners who are drawing regular monthly pension through Bank of India branch.
• Retired employees (except dismissed/compulsorily retired)
• The net take home pension of the pensioner should be minimum 40% of the pension amount after deduction of loan instalment .
• The loan can be availed in the form of Term Loan/ Demand Loan/ Overdraft/ Overdraft (reducible as per repayment schedule).
• Applicant must meet the net take home pension criteria of the bank

5. Indian Bank Pension Loan

Indian Bank offers personal loan for pensioners to help them meet any expenses, including medical, education, family and domestic functions, marriage, and so on. The loan is offered to regular pensioners as well as family pensioners at attractive terms. Below are some important characteristics of Indian Bank Pension Loan offered by Indian Bank:  

Loan Amount:

• For Regular Pensioners: Up to pension of 15 months, with no minimum and maximum limit on the loan amount.
• For Family Pensioners: Up to pension of 12 months, maximum Rs. 2 Lakhs and no minimum loan limit.

Indian Bank pension loan interest rate: 10.60% to 11.75% per annum

Repayment Tenure: 

• For Regular Pensioner: Up to 10 years or maximum exit age of 78 years, whichever is earlier
• For family Pensioner: Up to 10 years or maximum exit age of 73 years, whichever is earlier

Processing Fees: Nil for loan amount up to Rs. 25,000 and Rs. 250 + GST for loan amount above Rs. 25,000.

Documents Required:

• Authorization to recover monthly loan instalment from Savings Bank Account where the pension is being credited.
• Guarantee of the spouse who is eligible for family pension. In case the spouse is not available, a suitable guarantee from a legal heir/ family member/ third party guarantee is required.
• Pensioner’s portion of PPO
• Intimation to PPA
• Pensioner’s portion of PPO has to be retained with documents if the branch is receiving credit of pension only. The pensioner should provide an irrevocable undertaking that they will not shift their pension credited account to any other bank during the pension loan tenure.
• A copy of pensioner’s half to be kept with documents if the branch is disbursing & crediting pension.

Eligibility Criteria:

• Central and State Government Pensioners, Re-employed Pensioners, Family Pensioners, and Indian Bank Retirees (both under VRS and superannuation) whose Pension Savings Bank accounts are maintained at Indian Bank’s branch.
• EPF Pensioners and CRS retirees are not eligible
• The maximum entry level age is 75 years for regular pensioners and 70 years for family pensioners.
• The maximum exit level age is 78 years for regular pensioners and 73 years for family pensioners.

6. Canara Bank Pension Loan

Canara Bank personal loan for pensioners come under two schemes, i.e., Canara Pension – General Public and Canara Pension (Canara Bank – Ex Employees). These loans are targeted to the financial needs of general pensioners and ex employees of Canara Bank. Following are the details of both the schemes:    

Loan Amount:  Up to 20 months’ pension, maximum Rs. 4 Lakhs for retired employees of Canara Bank and family pensioners of retired employees of Canara Bank. Up to 15 months’ pension, maximum Personal Loan upto Rs. 3 Lakhs for others.

Canara Bank Pensioners Loan Interest Rate 

Pension Loan Canara Bank interest rates are linked to Repo Rate Lending Rate (RLLR) and start from as low as 10.20% p.a.

Repayment Tenure: Up to 72 EMIs for Canara Bank ex-employees/retirees, up to 60 months for general public pensioners, and up to 84 months for defence pensioners.

Processing Fees: Nil

Documents Required:

• Loan application along with 2 passport size photographs
• Irrevocable Mandate
• Delivery letter to DPN
• Letter addressed to Pension Disbursing Authority.
• Co-obligation (unless waived)

Canara Bank Pensioners Loan Eligibility 

The eligibility criteria for Canara Bank pension loans depend on the type of borrower, income, relationship with Canara Bank. Below are the detailed eligibility criteria:  

• Pensioners and Family Pensioners of Canara Bank.
• All State Government Pensioners.
• All Central Government Pensioners (including Central, Civil, Defence, Railways, Defence Civilians, Armed Forces, Freedom Fighters, etc.)
• Pensioners of all Public Sector Undertakings/Corporate Pensioners.
• Pensioners of all Government Department Undertakings.
• Family Pensioners of all the categories mentioned above.

7. IDBI Bank Personal Loan for Pensioners

Personal Loan offered by IDBI Bank caters to the needs of all, including Salaried Individuals, Self-employed Professionals, and Pensioners. The loan helps them to meet their financial needs. Below are the details of IDBI Bank Personal Loan to Pensioners:

Loan Amount:  Minimum Rs. 25,000 and maximum up to Rs. 3 Lakhs

Interest Rate: 8.30% – 11.75%

• Pension Account with overdraft facility (For retired IDBI Staff): 8.30% per annum
• Pension Account with overdraft facility (For others): 11.05% per annum
• Pension accounts with IDBI Bank: 9.50% - 11.75% per annum

Repayment Tenure: 12 to 60 months

Processing Fees: Nil

Documents Required:

• Loan application along with 2 passport size photographs
• Delivery letter to DPN
• Co-obligation (unless waived)

Eligibility Criteria:

• All pensioner customers having pension account with IDBI Bank.
• Maximum age of pensioners must not be above 75 years (at the date of loan maturity).
• The third-party guarantee is required for Personal Loan to Pensioners.
• Overdraft facility for IDBI Bank Ltd Pensioners would be valid for 1 year and renewable every year.

8. PSB Personal Loan for Pensioners - Punjab & Sind Bank

Punjab & Sind Bank (PSB) offers Personal Loan to meet any genuine personal needs of salaried individuals as well as pensioners. Below are the details of PSB Bank Personal Loan to Pensioners:

Loan Amount: 

• For pensioners up to 65 years of age: Up to 15 times monthly net pension or Rs. 3 Lakhs, whichever is less.
• For pensioners above 65 years and up to 70 years of age: Up to 10 times monthly net pension or Rs. 1 Lakh, whichever is less.

Interest Rate: 9.50% - 10.50% per annum

Repayment Tenure: Up to 60 months

Processing Fees: 0.50% of the loan amount + GST

Documents Required:

• Loan application form
• Age proof
• Proof of pension details

Eligibility Criteria:

• Pensioners who are having their pension account with PSB branch
• Maximum exit age is up to 70 years
• Third-party guarantee/ mutual guarantee/ guarantee of spouse or major son is required

Fees and Charges of Senior Citizen Personal Loan

There are various fees and charges associated with the senior citizen personal loan or pension loan, including:

• Processing fee: The processing fee may vary between 0.50% and 2% of the loan amount.
• Interest rates: Interest rates for these loans start from as low as 8.30% p.a.
• Prepayment charges: The charges for prepayment of loan can be up to 3% of the amount prepaid.

These charges may vary from lender to lender and depend upon the type of scheme.

Pension Loan Schemes

There are various pension loan schemes available in the market that are offered by banks. These pension loans help borrowers, who are retired and earning regular pensions, to pay for their medical bills and other expenses. The most popular pension loan schemes available in India are:

• SBI Pension Loan
• Cent Pensioners
• PNB Personal Loan Scheme for Pensioners
• Bank of India or BOI Star Pensioner Loan Scheme
• Indian Bank or IB Pension Loan
• Canara Pension - General Public
• Canara Pension (Canara Bank Ex-Employees)
• IDBI Bank Personal Loan for Pensioners
• PSB Personal Loan for Pensioners

Quick and Easy Loans for Pensioners

Nowadays most banks are using advanced technology and online ways to reach their customers and offer quick & easy loans for pensioners. If you are a pensioner and looking for an instant personal loan, you can apply online through the lending bank’s website, mobile app or through online lending marketplaces. These online platforms make the whole application and disbursal process a lot more easier and faster.

Benefits of Personal Loan for Pensioners

Following are some benefits of a personal loan to pensioners:

• No need of collateral: The loan is offered against the pension income of the pensioner. Therefore, no additional collateral is required by the bank to offer the loan.
• Low rate of interest: Most lending institutions offer personal loans at low interest rates to pensioners, making the loan more affordable for them.
• Multipurpose loan: Personal loans can be used for multiple purposes by pensioners, including medical expenses, marriage of kids, vacation, house renovation, and so on.
• Quick documentation & approval: Since most lenders offer personal loans to those pensioners who have their pension account with them, these loans do not require much documentation like other loans. For this same reason, the approval is much faster as the account belongs to the same bank.

Personal Loan for Pensioner FAQs

✅ What is a pension loan?

Pension loan is basically a personal loan offered to the pensioners.

✅ What is the rate of interest for Canara Pension Loan?

The Canara Pension loan comes at an interest rate of 10.20% per annum.

✅ Does SBI charge any processing for SBI Pension Loan?

Yes. The bank charges a processing fee of 1% of the loan amount (minimum Rs. 1,000 and maximum Rs. 10,000) + GST for SBI Pension Loan. However, there is no processing fee for defence pensioners.

✅ What is the repayment tenure for PSB Personal Loan to Pensioners?

PSB Personal Loan to Pensioners can be repaid within a maximum repayment tenure of up to 60 months.

✅ What is the rate of interest charged for IB Pension Loan?

The IB Pension Loan comes at an interest rate of 10.60% to 11.75% per annum.

✅ How much loan amount can I avail under Central Bank of India Personal Loan for Pensioners?

You can avail a loan amount of maximum up to 18 times the monthly pension, subject to a maximum of Rs. 10 Lakhs under Cent Pensioners.

✅ How much loan amount can I avail under Bank of India Star Pensioner Loan Scheme?

You can get up to Rs. 10 Lakhs as loan amount under BOI Star Pensioner Loan, depending on their age and pension income.