loan for pensioner

Applying For A Loan For Pensioner? You Must Consider These Things


The lending market has seen considerable growth and expansion over the past ten years. Consequently, many new financial products have emerged that cater to different income groups. With this advancement, today, pensioners can also avail advances like a loan for pensioner to meet necessary big-budget expenses and personal financial goals.

As a pensioner, you can avail this loan from leading lending institutions like Bajaj Finserv even as a reverse mortgage loan. Reverse mortgage is a facility that allows pensioners to mortgage their owned property and receive money from the lender as a lump sum or in monthly instalments.

This funding option ensures pensioners do not have to depend on anyone for their financing needs after retirement. With the benefit of easy application procedure from NBFCs like Bajaj Finserv, loan for pensioner are becoming the most preferred financial solutions for senior citizens.

They also bring pre-approved offers that make the process of availing finance easy and save your time. These offers are available on secured credits like home loans, as well as unsecured credits like personal loans and business loans; along with several other financial products. You can check your pre-approved offer by providing a few essential details like your name and contact number.

While a loan for pensioner is an attractive funding option for people in their retirement phase, few factors need consideration before the application is initiated. It will ensure the application receives quick approval and you get a loan that offers the most beneficial terms and conditions. So, check out the factors you must examine before you apply for a pensioner loan.

Factors To Consider Before Applying For A Pensioner’s Loan

  1. Your eligibility

You must check your eligibility to avail the loan, which includes the amount you are eligible for.

Your loan eligibility depends on the residential property you plan to mortgage and its current market value. It is also affected by the LTV policy your lender follows. While your mortgageable property’s market value play a critical role in deciding your eligibility for the applied loan amount, LTV is equally important.

Some of the best lenders offer a high LTV of up to 75% of the property’s value, which helps in maximising the loan amount you can avail.

You can qualify for this loan against property by meeting the eligibility criteria prescribed by your lender.


  1. Your plans to reside in your property

Since the mortgageable property to avail a loan for pensioner should be a residential one, it is essential that you consider your plans to stay in the house. As vacating the house you have mortgaged invites loan settlement from the lender’s end, it is better that you plan to reside there for a longer duration.

In case you plan to shift from the house in the next few years, you may consider availing a loan against property which comes with a fixed repayment tenor.

  1. The impact of a loan for pensioner on your heir

Since reverse mortgage loans for pensioners are settled through property auction after the borrower’s demise, availing a loan that exceeds the property’s value may burden the heir with a liability. Hence, while applying, it is advisable that you opt for a loan that does not exceed the value of the reverse mortgaged property.

  1. The applicable rates of interest

Applicable interest rate and other charges sum up to the total cost of loan. Interest rate bears a significant impact on your finances during the repayment tenor.

Hence, before applying for this loan, you must consider the applicable interest rate and charges, and choose a lender who offers this loan at the lowest rate. This consideration will make the loan repayment more affordable. Also, make sure you do not buy into the myths about loan against property, whereby high interest rate remains a common confusion. So, cross check your knowledge about the same before you proceed with the application. Hence, before applying must choose carefully between fixed vs floating interest rate by observing the repo rate and MCLR before application.

  1. Its financial implications on your spouse

Also, since the demise of a borrower invites loan settlement through property auction and loan recovery, it may leave your spouse with no financial security. To keep your spouse protected from such a crisis, you may opt to make him/her your co-applicant when applying for the loan.

Once you have considered all these factors, you may proceed with the application of a loan for a pensioner. Avail it to enjoy financial security for the rest of your retirement period.

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