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Pension Loan Explained: How it works, interest rates, eligibility and other key factors


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  A pension loan offers retirees easy access to funds with minimal paperwork and lower interest rates, using their pension as proof of income. It's a practical option for covering expenses like medical bills or home repairs without the hassle of traditional loans.

The article from Moneycontrol discusses the concept of a pension loan, which is a financial product designed for retirees or those nearing retirement who receive a pension. It explains how pension loans work, where individuals can borrow against their future pension payments. Key points include the eligibility criteria, which typically require the borrower to be receiving a pension from a recognized source like government or private sector pensions. Interest rates for these loans are generally lower than unsecured personal loans due to the steady income from pensions, but they can vary based on the lender, the amount borrowed, and the repayment terms. The article also covers the loan amount, which is often a percentage of the annual pension, and the repayment structure, which can be through EMIs or directly deducted from the pension. Additionally, it highlights the importance of understanding the terms and conditions, including any penalties for early repayment, and the potential risks such as the impact on the pensioner's financial stability if the pension income changes. The piece concludes by advising potential borrowers to consider their financial situation carefully before opting for a pension loan.

Read the Full Moneycontrol Article at:
[ https://www.moneycontrol.com/news/business/personal-finance/pension-loan-explained-how-it-works-interest-rates-eligibility-and-other-key-factors-12973634.html ]

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