Personal Loan

Along With Personal Loan, Different Loans Available For Senior Citizens


Many individuals find it challenging to get a loan. Getting a loan is challenging even for professionals who have a good credit history. Also, for those who provide evidence of their capacity to repay the loan. Still, for the unemployed or senior citizens, the burden is double.

Senior citizens are in this latter group. Loans for senior citizens are often not approved due to the lack of a stable source of income. Finally, there’s hope. Banks are starting to relax their policies to benefit senior citizens. In this article, we’ll tell you about all the available loans for senior citizens.

What are the different Loans for Senior Citizens along with Personal Loans?

Personal Loan

Anyone can experience a financial emergency or crisis regardless of age or circumstances. Hence, it’s possible to have money issues even if you’re a senior citizen. Anything can cause this, ranging from an unexpected bill to a health crisis. 

A personal loan for senior citizens can help you climb out of a tight spot. Suppose you are a senior citizen and need urgent money. In that case, you can receive a personal loan and put your pension as collateral.

Individuals over 60 are eligible for personal loans tailored to their needs. A personal loan for senior citizens and a normal personal loan don’t differ much. Interest rates and other criteria are the primary differences between the two loans.

Having a pension is the single most critical necessity for seniors. Most financial institutions will not provide personal loans to senior citizens. That’s because they cannot establish that they get a stable income. Hence, having a steady income stream is crucial for a personal loan for the elderly.

Your monthly income when determining your suitability for a personal loan is crucial. Lenders rarely provide personal loans to anyone over 60. That’s because most elders don’t have a consistent income source. Nonetheless, you can still qualify for the loan if you get a monthly pension.

Pensioners in India can apply for a personal loan. The loan amount for senior citizens can be 12-15 times their monthly pension payment. After the loan approval, the lender will draft your monthly pension to cover the loan’s EMI. Yet, you will need proof of your pension to get this loan.

Home Loans

Getting a home loan is an uphill battle even for youngsters with reliable income streams. In the past, getting a house loan as a senior person was a hassle. But banks have streamlined the process. After all, you can fulfil your dream of homeownership at any age.

Senior citizens can ease the procedure by applying for a joint home loan. They can do this if their prospective co-borrower is still employed. Moreover, you can get extra tax advantages if the co-applicant is a shared landowner with you. Having a female co-applicant also qualifies you for preferential interest rates.

But don’t apply to many banks at the same time. That’s because doing so may lower your credit score. You can use the internet to determine:

  • Whether you qualify for a loan
  • How much you may expect to pay back each month in instalments?
  • Which banks are most likely to lend to seniors?

With a lower loan-to-value (LTV) ratio, you’ll be able to borrow more money and pay off your mortgage faster. LTV indicates the amount of the property’s worth that the lending institution funds. To maximize your financial security, choose a loan-to-value ratio as minimal as possible.

Reverse Mortgage Loans

Reverse mortgage loans came into India in 2007. But they had existed for at least two decades in the US. RML is the reverse of a home loan that lets the customer use collateral other than their house to secure a loan. Plus, the repayments will be like any other loan repayment.

To qualify for RML, a citizen must be at least 60 years old and a legal owner of a primary house. If the borrower wants to apply with someone else, that co-applicant must be at least 55. There is a hard cap on the repayment period, often between 15 and 20 years. 

After this time, if there is still a balance owed on the loan, the borrower can pay it off. Then, he can regain full possession of the property. Yet, if you’re unable to pay back the loan, the bank will confiscate your house and sell it. Compared to traditional loans, RML doesn’t need income verification or stellar credit history.

Access to RML is a great benefit. That’s because it ensures the borrower can afford to cover daily costs and essentials. Lenders thought it would be a huge success in India, but that hasn’t happened. 

Several factors are at play, but one of the most important is a strong personal connection to the home. Many Indian seniors stay in the same home for decades. They do so intending to leave it to their children and grandchildren as an asset. 

Greatest Loan Amount of RML

As another factor, the greatest loan amount varies from Rs 50 lakhs to Rs 1 crore, based on the lender. But the value of a home in a hot housing market can reach 3 crores. Hence, the RML program is not very appealing to those who create their homes there.

Moreover, senior citizens fear not being able to repay the debt after the term and losing their house. Hence, RML has become a less popular choice among senior citizens.

These factors depend on the present and future finances of the individuals concerned. 

Hence, if you’re seeking a helping hand but have some financial stability already, RML could be the way to go.


And there you have it. A complete guide on the different types of available loans for senior citizens.

Many loans are available for senior citizens. They are Personal loans, Reverse Mortgage Loans, and Home Loans.

Make sure you read all the documents and pick a loan you’ll be comfortable paying back.

Are you also in need of a home loan or personal loan? Apply for a home or personal loan with Piramal Finance right now!