Are Senior Citizens Eligible for Loan Against Property?

Q: What are the eligibility criteria for senior citizens to apply for a loan against property?

To be eligible for a loan against property for pensioners, an individual should be 21-65 years at the time of loan retirement (It may differ). The individual's proof of income should be over INR 1.8 LPA. Self-employed individuals must have a graduate degree if they work in a private limited company or partnership. They must also have a stable monthly income of over INR 40,000 and have worked for 2-3 years.

Q: What happens if a senior citizen defaults on the loan repayment?

In the case of a senior citizen loan against property, such as housing or vehicle loans, the bank can repossess the asset and settle the loan. However, for unsecured loans, the bank must either relentlessly pursue the borrower or opt for a settlement, as they do not have the option to take possession of any asset.

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09 JUNE, 2021

Senior citizens may often need immediate funds to meet their monetary exigencies. In such a case, they can make use of the Loan Against Property. Be it managing their medical costs, or taking care of the living expenses, education, marriage, the loan amount can be used for a variety of purposes. This can help senior citizens lead a financially independent life post retirement.

Features of Loan Against Property for Senior Citizens

Loan Against Property for senior citizens is a secured loan. The property pledged as collateral can be either commercial, residential, or industrial property
The loan can be availed by pensioners, salaried, or self-employed borrowers
Minimum age should be 21 years while applying for the loan and maximum 65 years at the time of loan maturity
Senior citizens can avail a loan amount ranging from Rs 10 Lakh to Rs 5 Crore
The loan disbursed is around 65% of the market value of the property
Loan Against Property comes for a tenure of up to 15 years.
Minimal documents are required, and the application process is completely hassle-free

The property must be in the name of the borrower, or jointly with the spouse. Take into consideration the advantages of Loan Against Property and get ready to carry out your big ticket funding requirements.

Importance of financial Stability in Retirement

Financial stability plays a crucial role in retirement planning. One of the primary reasons for this is the respect it commands in society. Financially unstable individuals often struggle to gain the respect of others, irrespective of their qualifications or character.
Additionally, financial stability contributes to physical and mental well-being by reducing stress and its associated health problems.
It also plays a critical role in family dynamics, as couples with financial stability tend to have stronger relationships.
Financial stability is essential for old age and retirement, allowing individuals to invest in schemes and plans to ensure a happy and comfortable life after regular income ceases. In contrast, financially unstable individuals may rely on relatives' kindness or charity for basic necessities during their golden years.

Benefits of Loan Against Property for Pensioners

Low-interest rate : As Loan Against Property for senior citizens is a secured loan, the interest rate charged on the loan is lower as compared to unsecured loans such as personal loans, student loans, credit cards.
Multipurpose loan : The loan amount availed against the property can be used for various reasons such as child’s education, medical emergency, travelling, etc.
Less prepayment penalty : The prepayment fee of Loan Against Property is minimal. Thus, senior citizens have the option to reduce the interest burden by prepaying the loan.
Easy to avail : The eligibility criteria for a Loan Against Property are much flexible as compared to a personal loan. If you have a lower CIBIL score, you can still avail the loan. With us at Kotak Mahindra Bank, pensioners can avail a customised Loan Against Property at competitive interest rates.

Senior citizens should check their eligibility for Loan Against Property before proceeding with their loan application. This will reduce the chances of loan rejection. They can easily check their loan eligibility by using an online eligibility calculator. With easy online application, minimal documentation, quick loan approval, efficient customer service, Kotak Mahindra Bank offers a hassle free Loan Against Property for senior citizens.

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Frequently Asked Questions

Can a pensioner get a mortgage loan in India?

Obtaining a mortgage loan can be a tedious task for working individuals due to the numerous approvals and eligibility criteria involved. Loan against property for senior citizens may seem impossible due to the risk lenders face as they lack a steady source of income. However, there are many lenders and NBFCs that help pensioners secure mortgage loans.

Is a CIBIL score required for the loan against property for retired persons?

Senior citizens in such a situation may consider utilising the loan against property for retired persons. If you have a lower CIBIL score, you can still take advantage of a Loan Against Property as it is a secured loan, and the property acts as collateral. Therefore, the loan approval is less dependent on the borrower's credit score.

What are the eligibility criteria for senior citizens to apply for a loan against property?

To be eligible for a loan against property for pensioners, an individual should be 21-65 years at the time of loan retirement (It may differ).
The individual's proof of income should be over INR 1.8 LPA.
Self-employed individuals must have a graduate degree if they work in a private limited company or partnership.
They must also have a stable monthly income of over INR 40,000 and have worked for 2-3 years.

How much loan amount can a senior citizen get against their property?

The loan amount a senior citizen can receive against their property depends on the maximum tenure, which can go up to 15 years. The total loan against property for senior citizens in India typically ranges from 65% to 70% of the property value.

What happens if a senior citizen defaults on the loan repayment?

In the case of a senior citizen loan against property, such as housing or vehicle loans, the bank can repossess the asset and settle the loan. However, for unsecured loans, the bank must either relentlessly pursue the borrower or opt for a settlement, as they do not have the option to take possession of any asset.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

All About Loan Against Property for Senior Citizens & Pensioners : Features, Benefits & Importance