The end of your working life often means the end of your eligibility for a loan. The maximum leeway allowed is maybe two years after your retirement. Beyond that, no bank is ready to provide loans.

But there is some good news for pensioners. Public sector banks have come up with some tailor-made loans for people who maintain pension accounts with them.

These loans will be offered to individuals to meet any personal, medical or contingency requirements. In certain cases, the loan can also be taken without specifying any reason. However, the loan will be provided by the branch, which has the pension account of the applicant.

State Bank of India (SBI), Allahabad Bank, Bank of Maharashtra, Canara Bank and Oriental Bank of Commerce (OBC) provide loans to pensioners of central, state or public sector units. Punjab National Bank (PNB), Central Bank of India and Bank of Baroda (BoB) offer loans to any pensioner.

However, the age limit varies across banks. For OBC the limit is 65 years, for Bank of Maharashtra it is 67 and for SBI, Allahabad Bank, Central Bank of India and BoB it is 70 years.

The loans are generally granted on the basis of pension drawn by individuals in that bank. However, depending on the credit profile, the bank may require a collateral security in the form of a guarantee or pledge of some securities.

The quantum of the loan is mostly in terms of number of months worth of pension, subject to a maximum limit as may be prescribed by respective banks.

Most of the banks offer a loan amount equivalent to 10 months pension, although the maximum limit varies. Allahabad Bank offers a maximum loan of Rs 75,000 and a minimum of Rs 15,000. For OBC, Canara Bank and Punjab National Bank, the maximum loan limits are Rs 50,000, Rs 75,000 and Rs 60,000, respectively.

For SBI, the quantum is a maximum of six months pension with a ceiling of Rs 40,000. BoB offers a loan amount equal to eight months of pension, subject to a maximum of Rs 50,000, while Bank of Maharashtra offers a loan equivalent to 12 months? pension subject to a maximum of Rs 75,000. Central Bank of India calculates the loan based on two age brackets ? up to 65 years the loan is eight months? pension, while between 65 and 70 years the quantum is four months? pension. However, for both the categories, the maximum limit is Rs 50,000.

The interest rates on such loans differ across banks and are normally linked to the prime-lending rate.

While Bank of Maharashtra, Canara Bank, Punjab National Bank and BoB do not charge any processing fees, Allahabad Bank charges 0.5 per cent of the loan amount subject to a minimum of Rs 200.

The repayment is made in equated monthly instalments, which again varies across banks. While SBI, OBC and PNB allow a period of 24 months, Allahabad Bank, Canara Bank and BoB allow repayment in 36 months and Bank of Maharashtra allows 60 months. For Central Bank of India, the repayment period is 36 months for pensioners up to 65 years and 24 months for those between 65 and 70 years.

Allahabad Bank also offers a group personal accident insurance policy of Rs 75,000 covering accidental death for the pensioners opting for this loan.