Personal Loan for Pensioners


All the banks and financial institution offers only secured personal loans to pensioners.

Just because you don't any income source other than your pension, it doesn't mean you should be struggling with the financial crisis in your life. Personal Loans can be good escape in this case to manage your urgent financial needs such as big medical expenses, wedding in the family or paying off an existing debt.

All the banks and financial institution offers only secured personal loans to pensioners. The amount offered to a pensioner is usually lower than what is being offered to a non-pensioner. Though, the repayment period can be as long as 60 months. Applying for a personal loan for pensioner is easy and can be done with minimal documentation from the peace of your home.

Personal Loan Options for Pensioners

- Personal Loans against Pension Funds

Almost all the banks and financial institution offers unsecured loans to pensioners against their pension funds. In this kind of loan, applicant has to offer the documents of their pension funds as a mortgage to the bank/financial institution.

In case you are drawing your pension through pension account in bank/FI, then you can either apply in the same bank which makes it easy and quick to avail funds because of existing relationship with the bank, or you can apply in any other bank who is offering you the best interest rate. In this case, you have to provide an authorization to the bank to remit the personal loan EMIs directly from your pension account.

Other Finance Options for Pensioners

- Personal Loan against Deposits

In case you are a pensioner but don't want to put your pension plan at risk and have already invested in a fixed deposit scheme, then you can also consider availing a secured personal loan against the deposit amount. You can either apply in the same bank in which you have opened your deposit account to get quick processing or you can apply in any other bank. In case you apply in any other bank, then you need to put the documents of your fixed deposit account as a lien to the bank. However, in any case you have to give bank an authority to liquidize the deposit amount as per the non-repaid loan amount. There is a minimum deposit amount criteria which varies according to the bank in which you are apply. However, a minimum deposit amount for personal loan against Deposit should be at least Rs. 20,000.

- Personal Loan against Insurance Policies

Personal Loan can also be availed against life insurance policies. It is similar to Personal Loan against deposit except that you put your life insurance policy asa lien to the bank.

- Personal Loan against Gold

Another option to avail funds for a pensioner is against gold. We all have some of the gold secured in the family as jewellery or asset, which you can utilize to handle your urgent finance crisis. Personal Loan against gold is rather easy since bank and financial institution are always ready to offer this kind of loan. However, when using your gold jewellery or asset as a security for your personal loan, you must ensure that the bank/fi correctly calculate the worth of it. Also, make sure you take only the amount as per the requirement, but more than that, so you can easily pay it off and regain your gold back after full repayment as quick as possible.

Personal Loan Offers

Bank/FI Interest Rate Processing Charges Loan Amount Tenure
SBI Pensioner Loan 11.70% per annum 1% of loan amount Up to Rs. 14 Lacs 12-60 Months
Andhra Bank Pensioner Loan 11.95% per annum 2.75% of loan amount Up to Rs. 5 Lacs 12-60 Months
Bank of India Pensioner Loan 11.05% per annum 2% of loan amount Zero for Senior Citizens Up to Rs. 5 Lacs 12-36 Months
Canara Bank Pensioner Loan 11.80% per annum Zero Up to Rs. 5 Lacs 12-72 Months
PNB Pensioner Loan 11.25% per annum Zero Up to Rs. 10 Lacs 12-60 Months
UBI Pensioner Loan 12.90% per annum .10% of loan amount Up to Rs. 3 Lacs 12-60 Months
Indian Bank Pensioner Loan 12.20% - 12.95% per annum Zero to Rs. 255 Up to Rs. 6 Lacs 12-60 Months

Eligibility Criteria

  • Co-applicant is must to have, either earning/non-earning.
  • The co-applicant must be an resident indian citizen and should be presented in India at the time of loan application.
  • NRI Applicant should have a regular source of income.
  • Must have a foreign account (NRE/NRO) account for remittance for the loan EMIs.
  • NRI must have located overseas for more than 24 months in continuity.

Things to Consider before Applying for Personal Loan for Pensioner

- Age

Age is one of the most crucial factor that have a direct impact on personal loans for pensioners. Financial institutions determines the maximum repayment period of the loan depending upon the age of the borrower at the time of loan application. The minimum age considered by most of the banks is 58 years at the time of loan application. However, few banks consider 60 years for the minimum age criteria.

- Income

Income is the second most important aspect of availing a personal loans in case of pensioner. Bank / Financial institution only consider the regular income sources to determine the eligibility criteria. These regular income sources for pensioners can be pension funds, and rental income etc.

- Credit History

Approval on a personal loan that you have applied for, depends mostly on your credit history. Credit history represents the ability to repay debts about a consumer. It includes some basic spending and borrowing elements which banks and financial institution checks to determine the actual worth of the borrower. These elements are as follows:

  • Number of credit accounts you have had so far and their types.
  • Total time you have maintained each of those account.
  • Total amount you borrowed so far.
  • Total amount you have utilized from the available credit limit.
  • Are you paying the bills on time or have made defaults.
  • How many inquiries you have made in the recent time for credit from any lender.

- Loan Amount

The loan amount you are applying for, is also a considerable factor on which banks/FI have a look. You should only apply for the loan amount that you need and not borrow any additional funds above that. Bank/Financial institution will check your repayment capability and match it up with the loan amount you have requested to borrow. The final sanctioned loan amount will be based on the calculation done by the bank/fI.

What you needs to be eligible for Pensioner Loan?

  • Applicant can be a retired employee of central or state government organizations and PSUs or a family pensioner who has been nominated in the pension account as the nominee.
  • Applicant must be above the age of 58 years at the time of loan application. The maximum age of the applicant should not be more than 75 years at the time of loan maturity. However, different financial institutions have different criteria for maximum age.


  • KYC Details
  • Original Copy of Pension Payment Order
  • Document for any other source of income.
  • Documents for co-obligation
  • Authority letter in case of DPDO (Defence Pension Disbursing Office) Pensioners