Higher education has become increasingly expensive over time. This is why the majority of students around the world now rely on personal loans for finance.
A personal loan is not the same as a student loan. A personal loan can be used for various things, including your education or a family member’s education. A personal loan with no security is a good alternative because it is easier to repay, especially if you are still in school.
On the other hand, a student loan can only be used for the purpose it was obtained. Furthermore, a student loan has strict qualifying requirements, and you must cover 15% of the costs.
In this article, we discuss everything about personal loans for students and how to avail of one.
Features and benefits of Personal Loans for Students
- INR 15 lakh is the maximum loan amount.
- The loan repayment period is adjustable, ranging from one to five years.
- A student personal loan can assist you in pursuing your higher education goals.
- It’s an excellent substitute for other sorts of credit.
- For loans up to INR 5 lakh, you do not need to furnish any collateral.
- Interest paid on loan is a deductible expense under Section 80E of the Income Tax Act.
This type of financing is appropriate for short-term or vocational training.
- You must be between the ages of 21 and 63.
- You must have a minimum of one year of work experience.
- It would help if you had a credit score of at least 750.
- If you’re self-employed, you’ll need to show proof of income in tax returns.
- You must present your pay slips and bank statements if you have a job.
- Must fulfill the lender’s minimal salary requirements
You must submit the following documents when applying for a personal loan:
- PAN, Aadhaar, Driver’s License, Passport, Voter’s ID, Employee ID card, and other age, ID, and address proof papers
- In the case of employed applicants, pay salary slips
- Proof of income for a co-applicant (parent, guardian, or spouse).
- Three months’ worth of bank statements
- Two passport-sized photos taken recently
- A copy of the college or university’s admittance letter.
- For self-employed applicants, business registration certification and audited financial statements are required.
Points to bear in mind before taking a personal loan for students in India:
1. Calculate the appropriate amount of loan required.
Education is a costly affair, and you may have to pay other expenses in addition to the tuition fee. Don’t forget to include it in your loan application for educational purposes. Consider the cost of travel, study materials, and other expenses. It will assist you in better planning your costs and estimating the correct amount. It’s highly possible that overestimation or underestimating will be ineffective.
2. Examine the interest rate.
Check the interest rate and other borrowing costs such as processing fees and prepayment penalties. If you have a good credit score, you can take advantage of low interest personal loans.
3. Calculate your costs.
Education is costly. Especially when it comes to studying abroad, consider travel expenditures, tuition fees, the cost of study materials, any specific coaching you may require, and the cost of lodging and boarding that is not covered by an education loan when determining expenses. To get a sense of the cost of living, talk to friends and family who live in the nation. You’ll be able to decide how much Personal Loan you’ll need once you have an exact estimate of your costs.
4. Decide on the length of the loan and how much you’ll have to pay
Take up a student personal loan from a bank that offers flexible repayment terms, as the term will determine the size of your monthly payments. Remember that your earnings as a student may be lower than your earnings as a professional. Therefore, your most pressing need is for EMIs that are affordable. To arrive at an appropriate monthly outgo, balance the amount and tenure. Banks offer loans ranging from 12 to 60 months and EMIs beginning at Rs. 2,149 per lac.
5. Make sure you’re eligible
To discover if you qualify for the loan amount you need, use the personal loan Eligibility Calculator.
6. Make an application
A Personal Loan requires minimal documentation, such as identification, proof of address, and evidence of income. So first, check with your bank and ensure you have all the necessary documentation. You might not even need the paperwork if you’re an established customer. Then, discover how to apply for the loan. You can apply for a loan online personal loan or in person at a branch.
Consult your bank about processing times – Personal Loans are usually processed promptly. For example, you can receive an instant personal loan in just 10 seconds if you are a pre-approved Bank customer, and it takes less than 4 hours for others.
Is it possible for a student to receive a personal loan?
The answer to whether students can receive a personal loan is yes. If you need money to study for diplomas, certificates, or vocational courses with low tuition, a loan like this is usually the best option. So yes, you can use a personal loan to pay for your further education or specialized courses in India or overseas.
A personal loan can assist you in pursuing your educational ambitions and pursuing the most excellent professional chances.
How to get an instant personal loan in India for Students?
- Check your eligibility
- Select your loan amount and repayment term
- Provide required documents
And Voila! Get instant loan disbursal.