All You Need To Know About Getting A Loan If You Are On Pension


Life doesn’t always go as planned. Financial emergencies come up occasionally, often at the most unexpected times. Having access to a personal loan can often provide some much-needed financial relief at these times.  

For individuals who are on pension, this is often more challenging as they have a harder time getting access to such loans. 

The reality is that as a pensioner, lenders are reluctant to provide finance, because of the higher risk associated with advanced age. Affordability is essential for South African banking institutions.  

Financial institutions must lend to these individuals responsibly and ethically.  

What options do you have for getting a loan if you are on pension? 

Capitec Bank has an offer that is tailored for pensioners and their financial needs. These loans are unsecured, so there is no collateral required. Proof of income is required however. These loans also have a higher interest rate because of the associated risk of loaning a pensioner.  

Reasons often cited by financial institutions for not wanting to provide finance to pensioners generally include low income levels and that pensioners are often not particularly financially stable. 

This offers a flexible solution for getting a loan if you are on pension. The loan terms available depend on each person’s credit profile and eligibility. 

When you are awaiting funds following resignation, retrenchment or retirement, it may take a while before you receive your funds. A bridging loan can help to ease the strain on the costs of your daily living expenses and can help you pay off some of your outstanding debts. Once you receive your pension funds, you can repay the loan. 

South African banks also allow clients to use their pension fund as security for a home loan. 

As a pensioner, it’s important that you do the necessary research before you apply for a personal loan.


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