You must have noticed that banks have an age criterion for loan applicants. Most financial institutions offer loans to borrowers who are in the age range of 21 to 60 years. This makes it hard for the older population to avail of a loan easily. However, many institutions provide personal loans for pensioners and one can easily obtain funds through this. Financial adversities can come at any stage in life and the older population is more prone to diseases. Medical bills can be very expensive and can drain us financially. In these cases, a personal loan can be your best financial aid as it doesn’t require any security. Let’s dig deeper to find out more about personal loans for pensioners.
What does a Personal Loan for Pensioners Entail?
During the last couple of years, financial institutions have made their products more inclusive by catering to the older population as well. Traditionally, financial institutions have been seen to consider the older generation as a high-risk audience. This is because older people are more prone to terminal diseases. Also, they are not in their primary employment years so they don’t have a consistent income source. However, many people have a pension income source and they can demonstrate their repayment abilities through the same.
This is similar to the income proof needed from other borrowers, including self-employed, business owners, and salaried professionals. The only difference is the income proof, which in the case of pensioners is their pension income. Business owners can show financial documents, bank statements, income tax returns, etc. as proof of income. Similarly, salaried employees can show their salary proof or bank statement as income proof. In most cases, pensioners don’t need a guarantor or a co-applicant for loan approval. However, in some cases, they might need one. The requirements can vary depending on the policies of the lending party and the profile of the applicant.
Essential Requirements for Pensioner Loans
Just like other loan applicants, there are some essential requirements for approving a personal loan for pensioners. It is important to note that this might vary depending on the financial institution in question. A personal loan eligibility check is crucial. Some of the most essential requirements include the following.
- Proof of income
Proof of income is one of the primary requirements for granting loans to retirees or pensioners. In this case, pensioners have to show their pension account through which they receive their income monthly. A bank account summary of the account and pension-related documents can act as proof of income. It is easier for the lending institutions to verify a pension account and approve the loan. A pension amount of at least INR 20,000 per month is required to process the loan for elderly applicants.
- Identity and address documents
The last thing a lender wants is to get stuck in fraudulent processing. Identity proof is an essential document for the loan processing of pensioners. This is similar to any other loan processing. Irrelevant of the applicant’s age, financial institutions will ask for identity-related documents to evaluate the legitimacy of the borrower. Besides the identity proof, address proof is also needed. The applicant must be a resident of the city where he is applying for a loan. In most cases, the same document acts as both the address and ID proof.
- Credit history
Another essential requirement for loan applications from pensioners is their credit history. No matter what your age is, the lending party will always assess your credit history before granting you a loan. It allows them to filter bad borrowers. Applicants with a good credit history are more likely to get a higher loan amount while applying. If the lender is sceptical about your creditworthiness, the application will be rejected.
How can Pensioners Apply for a Personal Loan?
Applying for a personal loan is easier than ever. There are many banking and non-banking financial institutions like Fullerton India that are offering loans to pensioners. One can easily apply for a loan by visiting the website and filling in the loan application online. A digital copy of important documents such as address proof, income proof, PAN card, pension account summary, etc. is needed to process the loan. The processing and disbursal process is quick if you have the required documents.
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