Canara Bank Canara Pension Loan Scheme for Ex-Employees

Canara Ex-Employees Pension Loan

This scheme helps Canara Bank pensioners and family pensioners (i.e. Canara Bank ex-employees or their families) get a loan for their personal needs and* to pay their Mediclaim premium. While this secured loan can be used to meet expenses for overseas travel, medical emergencies and so on, it can also be used to pay off or consolidate high-interest debts. This loan cannot be availed for speculative purposes.

*We look at why we have made the ‘and‘ bold and italicised in the detailed sections below.

Canara Bank also offers a Pension Loan for the General Public. You can read more details of this loan by clicking -> Go to Canara Bank Pension Loan for the General Public. 

Features of Canara Pension (Canara Ex-Employees) Loan Scheme

Why this Loan?

• The Canara Bank (Canara Ex-Employees) Loan Scheme is designed to help retired employees of Canara Bank and family pensioners of retired employees of Canara Bank who want to avail financial assistance for personal needs. Borrowers can also avail of this scheme to pay off their high-interest credit card debts and loans, thereby consolidating their debts
• More specifically, the bank mentions two major reasons why it may offer this loan:
  1. General Use (Component 1): For pensioners or family pensioners to meet the cost of medical expenses and other genuine personal needs such as paying for marriages or paying off high-cost loans
  2. Mediclaim Premium (Component 2): To pay the premium of the IBA Group Mediclaim Insurance Policy for Retired Employees of the bank and for family pensioners of retired employees of the Bank who have opted for and are covered under the scheme. This is in addition to Component 1

Loan Amount

General Use (Component 1)

The maximum loan amount sanctioned by the bank under this loan is up to 20 times the monthly pension of the borrower or Rs. 10 lakh, whichever is less

Condition: The bank will give you the Canara Ex-Employees Pension Loan only up to the amount that ensures you have at least 25% of the Gross Net Take Home left over after the proposed EMI is deducted.

Condition Example: If an ex-employee has a Gross Net Take Home of Rs. 100, then the bank will check whether after EMI is deducted, the ex-employee will have at least Rs. 25 left with her/him. If the EMI reduces the amount below Rs. 25, the bank will only give a loan that ensures this does not happen and the individual has at least Rs. 25 left over.

Mediclaim Premium (Component 2)

The maximum eligible loan amount to pay the Annual Premium of the IBA Group Mediclaim Insurance Policy (as a Second Loan) shall be the least of the below three amounts:

1. The Annual Premium amount payable for the year for the IBA Mediclaim
2. The maximum eligible loan amount as per the Canara Pension Loan Scheme (the lesser of up to 20 times monthly pension or Rs. 10 lakh)
3. Rs. 90,000

Condition: This is again subject to the condition that the maximum loan amount under both Component 1 and 2 will be the lesser of Rs. 10 lakh or up to 20 times the monthly pension of the borrower

Interest

General Use (Component 1)

The interest for the General Use Component is 11.25%

Mediclaim Premium (Component 2)

The interest for the Mediclaim Component is 9.75%

Repayment

General Use (Component 1)

• Pensioner’s Age Below 65 years at Time of Sanction: The loan must be repaid within 6 years in 72 EMIs
• Pensioner’s Age Above 65 years at Time of Sanction: The loan must be repaid within 5 years in 60 EMIs

Mediclaim Premium (Component 2)

The Canara Ex-Employees Pension Loan has to be repaid in 10 EMIs irrespective of the age of the Pensioner. The first instalment should commence from the subsequent month after disbursement (E.g. if the loan is sanctioned in March, EMI will start from April).

Prepayment

• There is no prepayment penalty on the loan

Eligibility

• Regular and family pensioners of Canara Bank (ex-employees other than dismissed staff or compulsorily retired employees) drawing regular monthly pension through the bank

Security Needed

• Loan to Pensioners: The bank asks its pensioner to provide co-obligation of the spouse or any other person/pensioner (including earning children) to secure the loan
• Loan to Family Pensioners: The bank asks the family pensioner of its ex-employee to provide co-obligation or a third-party guarantee to secure this loan

Margin Money (Borrowers Contribution to Total Cost)

• The bank does not charge any margin money from its ex-employees or family members receiving family pension (usually the spouse and dependent children)

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank covers the rest. So, if the total amount needed is Rs. 20 lakh, a margin of 20% means you will have to contribute Rs. 4 lakh (20% of Rs 20 lakh = 0.2 x 20 lakh = Rs. 4 lakh). The bank provides the balance of Rs. 16 lakh.

Processing Charges

• There are no processing charges for this Canara Bank Pension Loan Scheme for Canara Bank Ex-Employees

Documents Needed for Canara Ex-Employees Pension Loan

• Loan Application Form duly filled and signed by the applicant and co-applicant, if any
• Two Passport Size Photographs of the applicant and co-applicant
• PAN Card or PAN Card Issuing Letter (Mandatory)
• Personal ID Proof (Any One):
  • Aadhaar Card
  • Passport
  • Driving License
• Residential Address Proof (Any One):
  • Aadhaar Card
  • Driving License
  • Electricity Bill
  • Post-paid Phone Bill
  • Valid Rent Agreement
• Signature Proof (Any One):
  • PAN Card
  • Banker’s Verification
  • Driving License
  • Passport
• Documents related to the Canara Bank Pension account
• Letters should be addressed to the Pension Disbursing Authority and the particulars of the loans granted should be noted invariably in the Pension Register/PPO maintained with the pensioner and SB master