What Documents Do Elderly People Need To Get Loans?

Loans are invariably tied to your earning capacity. So, how do you get a loan when you are no longer working and have no professional source of income?

Amit Sethi
September 12, 2023
Documents required for taking loans

Documents required for taking loans

Yes, it is possible to get a loan in old age! You can get a loan after retirement, provided you fulfil the criteria laid out by banks. You can get a home loan, personal loan, vehicle loan or any other type like a home improvement loan. Let us discuss the criteria and the documents you need to secure a loan from the banks.


Identity Proof

You need identity proof for all types of loans. Banks need to know whom they are lending to. The identity proof requirement is usually an Aadhaar card, but banks may also accept other proofs. You can check with banks, as they may accept multiple documents as identity proof.

Address Proof

The next document required is address proof or proof of residence. This will act as the communication address. The proof can be a gas connection bill, a power bill, or your Aadhaar card. If you have changed the address, you can update the new address on your Aadhaar card and use the same for address proof. Before lending, the bank may physically verify your address as mentioned in the provided document.

Pension Details

Your pension detail is the most important document for banks because it gives them an idea about your loan repayment capacity. If you have other sources of income, that can also be included so that banks are assured about the timely repayment. Banks can fetch these details automatically if you are taking a loan from the bank where your pension is routed.

ITR Returns

Usually, banks ask for the last three years’ ITR documents. Income tax returns give banks a clear idea about the total earnings and expenses you claim. Depending on your ITR, the bank may decide your loan amount, the repayment tenure and the applicable interest rate.

Getting A Home, Personal or Secured Loan After Retirement

Home loans are often big-sized borrowing, so banks are a little more careful and scrutinizing before they disburse the loan amount to retired borrowers. If you are looking for a home loan, you need to submit a bank statement, ITR, income or pension proof, and the lender may additionally ask you to include a co-borrower in the loan.

In the case of personal loans, the criteria are not very strict. If you have an account in the bank where you have been receiving your salary and are now receiving a pension, a personal loan is easy to get. The amount of your personal loan will depend on your earning capacity and credit score.

Secured loans are the easiest way to get one, especially for retirees. You can pledge assets such as mutual funds or shares, traditional life insurance policies, gold jewellery, etc., to get a loan from the bank. Banks usually allow around 50 to 80 per cent of the pledged asset value as a loan. Interest on secured loans is generally lower than on unsecured loans. As you pay the amount back, banks release the assets back to you.

Apart from documents, you also need to keep a healthy credit score to get a bank loan. Unless essential or into a financial emergency, retirees should avoid loans as they may increase their financial commitments, which is often not desirable after quitting their work life.


The author is an independent financial journalist

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