Individuals who are employed need not worry about financial emergencies as many banks will be ready to provide loan within minutes.
Personal loan can be availed even by retired individual who draws pension. The loan can be availed for any reason such as marriage, holidaying, medical emergencies, etc.
5 Things to Know on personal loan for pensioners
1) The loan is usually offered to both Central and State Government employees who are drawing their pension in the same bank branches.
2. In case of deceased, the family member who is entitled for pension can also apply for personal loan.
3) Pensioners can repay the loan with EMI option. The EMI will be based on the eligibility, loan amount and duration of the personal loan. Personal loan ranges from 24 to 60 months depending on the bank and loan amount.
4) Banks ask for guarantee of spouse eligible for family pension to be obtained OR guarantee of earning children (preferably Govt Employee) OR third party guarantee with net means equal or more than loan amount, acceptable to the Bank.
5. Interest rate will be based on base rate. Some banks may offer lower interest rate on personal loan.
Usually, banks do not charge for loan prepayment and processing fees. Personal loans availed by pensioners can be prepaid any time without any penalty.
Documents required for Pension Loans are
1. Proof of Identity
Passport Copy or Voters ID Card or Driving License etc can be provided
2. Address Proof
Ration card, Telephone or Electricity Bill or Passport Copy etc.
3. Last 6 months Bank Statement or Bank Passbook.
Proof of Retirement, including the Pension Slip.
Pensioners should avail personal loans only if they need it. This is because, personal loans attract a very high rate of interest and it may not be advisable for pensioners.
However, banks do provide these loans, as pension income remains very stable and banks have some assurance. This is unlike a salaries individual who might lose his job and there is no guarantee of salary income.