A retired person getting regular pension may sometime need lump sum money to fund his/her child’s marriage, medical aid/expenses, build a house or even for a trip. Such persons having guaranteed pension – like retired Defence personnel or retired government employees who joined their services before January 1, 2004 – may get pension from the respective bank, in which they have their pension account in a simple and hassle-free way.

Loans to pensioners generally have features like low or no processing fees without hidden costs, quick loan processing with minimal documentation and easy EMIs.

State Bank of India (SBI)

SBI provides easy pension loan to pensioners like central and state government pensioners, armed forces pensioners and family pensioners up to the age of 76 years.

The rate of interest on Pension Loan varies from 2.40-6.65 per cent spread over 2 year MCLR, which is 8.10 per cent now. So, the rate of interest for SBI Pension Loan at present varies from 10.50 per cent to 14.90 per cent depending of type of pensioner, his/her age and type of Pension Loan applied for.

Depending on category of pensioner and his/her age, the maximum loan amount varies from Rs 2.5 lakh to Rs 14 lakh and the repayment period varies from 2.5 months to 84 months.

Bank of India (BoI)

Bank of India (BoI) provides Pension Loan to regular pensioners or family pensioners drawing regular monthly pension through any of its branches in the form of Demand Loan/Term Loan/Overdraft (reducible as per repayment schedule)/ Overdraft.

Regular / family pensioners, whose age will not exceed 75 years at the end of repayment period, would get loan up to 15 times his/her monthly pension or Rs 5 lakh, whichever is less. Older pensioners would get loan up to 3 times his/her monthly pension or Rs 50,000 whichever is less.

The rate of interest will be 2.50 per cent over RBLR, which, at current RBLR of 8.00 per cent would be around 10.5 per cent.

Punjab National Bank (PNB)

PNB provides pension loan to all types of pensioners drawing pension through its branches to meet personal needs including medical expenses.

The minimum and maximum loan amount would be Rs 25,000 and Rs 3 lakh respectively, depending on type of pensioner and his/her age.

The loan, including interest, has to be repaid in maximum 60 months by pensioners up to 70 years of age and the maximum repayment period for older pensioners will be 24 months.

The rate of interest will be 2.95 per cent above RLLR, which would be around 10.75 per cent at the current RLLR of 7.8 per cent.

Central Bank of India

Central Bank provides personal loan to pensioners / family pensioners drawing pension through any of its branches, to meet any genuine personal credit requirement.

Pensioners up to 75 years of age would get loan up to 18 months pension or Rs 5 lakh, whichever is less, while older pensioners would get loan up to 12 months pension or Rs 2 lakh, whichever is less.

The rate of interest would be 3 per cent above the MCLR and the EMI period would be 48 months. Currently, the 1 year MCLR of Central Bank is 8.1 per cent, so the interest rate on Pension Loan would be around 11.1 per cent.