Majority of banks have been giving various benefits to central and state government employees, including defence personnel. Among major benefits that a government employee gets are monthly pensions, provident funds and arrears among others during their retirement. Hence, to make their retirement even more flexible and cash crunch free, the banks also offer personal loan facilities to pensioners who have their account with them. Personal loan is the most traditional form of lending and helps in time of short term financial aid. Normally, just like every other loans, personal ones are also given by banks in consideration of their credit history. They also come with fixed interest rates and monthly EMIs installments. However, largest state-owned lenders like SBI and PNB are allowing central or state government or defence pensioners to avail personal loan from their branch to meet expenses. One important factor is that, their pension account must be with these banks branches. 

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Here’s how SBI and PNB offer their personal loan to pensioners!

SBI!

Age criterion is that it should not be more than 76 years. Among benefits are - nominal processing fees (Nil Processing Fees for Defence Pensioners), no hidden costs and quick loan processing. Whenever you have some surplus funds, you can credit your loan account, thereby reducing your loan liability and interest burden.

These employees can take loan at minimum Rs 25,000 and  maximum to Rs 14 lakh. The SBI pension loan is also available to family pensioners. If you are a central and state government pensioner, then your EMIs repayment period would be 60 months for them whose age is up to 72 years, while 48 months tenure for between over 72 to 74 years of age and finally 24 months period for more than 74 years of age but up to 76 years of age. 

In case of defence pensioners, the loan’s highest repayment period of 84 months is available for those who are upto 56 years of age, while 60 months tenure is given over 56 years of age up to 72 years of age. Also, 48 months and 24 months repayment tenure is given to pensioners over 72 - 74 years of age and over 74-76 years of age. 

There is a 0.50% processing fee levied for central and state government pensioners of the loan amount. In case of defence pensioners, there are no processing fees. 

Any prepayment of EMIs in full or in part and closure of account before the end of term will attract the prepayment charges of 3% on prepaid amount. No prepayment/ foreclosure charges will be applicable if the account is closed from the proceeds of a new loan account opened under the same scheme

Interest rate for SBI’s pension personal loan varies from 11.95% to 12.45%. 

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PNB!

Minimum and maximum loan amount is Rs. 25000/- and Rs. 3 lakh respectively.

Loan along with interest is to be repaid in maximum 60 equal monthly installments. However, In respect of pensioners above the age of 75 years, repayment period shall be of maximum 24 months.

No upfront fee is required. However, Rs 270 and Rs. 450 (excluding GST) for Loan amount of upto Rs. 2.0 lakh and above is to be paid as documentation charges.

Interest rates on PNB’s personal loan to pensioners is MCLR+ 2.80%. Currently, the bank’s one year MCLR stands at 8.45%. 

Hence, if you are having a pension account with PNB and SBI, then remember the above mentioned benefits on personal loan.