The biggest worry that employees on the verge of retirement would be the worry of not being able to spend their retired life in a peaceful house of their own, without having to face the hassles of a rented place. If this is one of your worries, then this article is for you!

As a Government employee or an employee of any reputed company that offers living quarters to their employees, you might not have worried about a place to stay. With constant transfers, you would not have had the inclination or necessity to buy a house unless it was part of your financial plan.

But now on the verge of retirement, you want to settle down in your own house and are looking for loans that help achieve your dream of getting a house. Not to worry, there are schemes for pensioners and those looking to retire soon to get a home loan, read on!

How to use employment details for loan applications?

Banks give loans only to pensioners who have worked and retired or about to retire from Central or State Government posts, PSU, Defense, VRS, educational institutions and other reputed companies. It is advisable to keep your work-related documents, pension papers and payslips in order before seeking loans.

How are eligibility criteria for loans determined?

The eligibility criteria for most banks depends on the age and loan amount and the bank's lending criteria. The maximum loan amount and the repayment period is dependent on the above. Lenders will also look at your credit health and your history of handling credit, if you have any past dues you must act on them as soon as possible. The EMI will be calculated in such a way that the loan is completely paid off before the borrower reaches 75 years old. The EMI also should be less than 40% of your monthly pension amount.

Do banks ask for a purpose while granting home loans?

Banks provide loans to retirees only for constructing/repairing/renovation of new/existing houses, buying the piece of land, purchasing the ready-made house or flat. Most banks only provide loans for a house renovation, expansion or repair for pensioners. Very few give loans for buying a piece of land or buying a new house.

How much should be my monthly income for home loan eligibility?

Your monthly income plays a very important role as the income determines your loan approval as well as loan amount eligibility. Banks have a minimum monthly pension starting from Rs. 5000 per month.

Now that we have discussed the eligibility criteria let me give some tips which can improve your chance of getting better loan amounts at low EMI.

Are joint loans advisable?

Taking loans with your wife or son/daughter is a good way of getting a better loan amount and a lower interest rate. Then your Net Monthly Income(NMI) which will be used to calculate the loan eligibility and EMI will be in the borrower's favour. For example, if the borrower is earning Rs. 40000 per month and his wife is earning Rs.40000 per month then the NMI value is Rs. 80000.  This value will reduce when the borrower starts getting only a pension i.e. if the pension is Rs. 10000 per month then NMI is Rs. 40000. Banks generally calculate EMI for only 60% of NMI.

In the case of a son/daughter, the loan amount and tenure will be high while the interest rate will be less. Some banks in special cases allow spouse and son/daughter to be co-borrowers which gives the borrower a lot of breathing space.

How to easily get a home loan?

The other way a pensioner can get good loans is by providing security to the bank. Pledging any fixed deposits, bonds, and gratuity funds or using the existing property as collaterals to get a good loan.


Whatever the method may be, borrowers need to make sure they explore all their options before signing up for any loan. Some of the premium banks are coming up with new schemes for pensioners alone. As with every borrowing decision, it is advised that you go through your credit report to understand your current state of financial health.

Check out CreditMantri to get the best loans and options that are right for you and which also does not become a burden on your life savings and spend your life in a pensioner's paradise of your dreams.


  1. Can a pensioner get a home loan in India?

Yes, a pensioner in India can get a home loan from various banks and lending institutions. It is important to go through the bank’s specific eligibility criteria before making a loan application.

  1. Is a pensioner eligible for a housing loan?

Yes, a retired person can borrow a home loan from a bank in which he/she has a pension account. The home loan tenure could be up to 15 years or till the applicant reaches 70 years of age, whichever is earlier.

  1. Can a retired person get a home loan?

A retired person can get a home loan, however, apart from the eligibility criteria applicable for non-senior citizen borrowers, banks may have additional requirements for granting such loans to seniors.

  1. How much home loan can a pensioner get?

The maximum amount of home loan that a pensioner can get depends on his/her credit standing, exact age, and also bank’s terms.

  1. What should be my age to avail home loan for a pensioner?

Some banks offer Home Loan to retiring individuals who are below the age of 75, while others have set a limit to a maximum of 70 years.