Are Personal Loans A Safe Option For Retired Individuals?

Retirement is the time when you can relax and enjoy your time doing what you like. However, retirement is also a time when your income stream is limited, and if you face a financial emergency, you might not have sufficient funds at your disposal.

In such cases, a personal loan can come in handy. An unsecured loan that is offered with simple eligibility parameters, a personal loan can give you the funds that you need. But how safe is the loan for retirees?

The truth of the matter is that personal loans are an easy and safe source of finance for retirees. Here are some reasons why –

• Multipurpose loans

Personal loans are multipurpose loans. You can use the funds for any type of personal or commercial need that you have. This gives flexibility to the loan and helps you avail of a single debt to finance multiple needs.

• Simple eligibility parameters

The eligibility parameters of availing of a personal loan are quite simple and flexible. You just need to have a source of income, and the loan is sanctioned easily. Even after retirement, if you have a pension income or if you have income-generating assets to your name, you can avail of a personal loan.

• Optimal funding

Personal loans are available up to optimal amounts so that your financial obligations can be easily met. Depending on your income and other eligibility parameters, there are lenders offering loans up to Rs.25 lakhs.  

• Collateral-free loans

The best part about personal loans is that they are unsecured. This means that you don’t have to pledge or mortgage any collateral security to avail of the loan. So, for retirees who do not have an asset to their name, a personal loan can prove to be an ideal way for arranging funds.

• Ease of repayment

With personal loans, you can get repayment tenures up to 5 or 6 years. This allows you to pay off the loan affordably without straining the limited income that you have. A personal loan EMI calculator will help you find the best combination of loan amount and repayment tenure, which gives you the most affordable EMI.

• Easy availability 

The icing on the cake is that personal loans are quite easily available. Lenders have simplified the loan application process by digitising it. You can simply apply for a personal loan online and get the loan sanctioned at the earliest. The loan funds are credited to your bank account without hassles allowing you to use the funds for any obligation that you have.

So, personal loans can be a suitable and safe choice for retired individuals in need of funds. However, there are some aspects which you should keep in mind –

• A source of income is essential to avail of the loan. So, try to have a regular source of income, even after retirement, to be eligible for the loan.

• Different lenders charge different interest rates on loans. So, before you apply, compare the personal loan interest rates across different lenders. Choose a lender with the lowest rates to reduce the interest cost, a factor that becomes imperative after retirement. 

• Maintain a good credit score for availing the loan on favourable terms.

• If you have existing loans, even a credit card debt, get rid of such loans to improve your borrowing eligibility.

• Lenders might also have a maximum age criterion up to which you can apply for the loan. Check this criterion too when comparing the loan offers across lenders.

That’s it! Some simple tips and tricks to follow, and you can get a personal loan quite easily. 

Do, don’t worry about the safety of personal loans. Retirees and senior citizens can avail of this multipurpose loan and take care of their financial responsibilities.