Today, getting a loan is easier than ever. This is especially true for instant personal loans for students, as lenders have simplified the application and approval process.
Unlike a student loan, usually sanctioned to fund tuition fees and study materials, a personal loan for education is without end-use restriction.
Personal Loans get quick approval as they are collateral-free and require basic documentation, including your identity, address and income proof.
Steps to avail of a Personal loan for students
Here is how you can get a personal loan for students in India:
- Estimate your expenses: Education is expensive. And especially if your child wants to study abroad. When calculating costs, consider travel expenses, tuition fees, the cost of study materials, any special training you may need, and the cost of accommodation and meals, which are not covered by conventional education or student loans. Talk to friends and family who live in the country to understand the cost of living. Once you have an accurate estimate of your costs, you will get an idea of how much personal loan amount you need.
- Check your eligibility: Check if you qualify for the amount you need using the personal loan eligibility calculator. Lenders use various parameters to check your loan eligibility, such as credit history, credit score, age, monthly income, employment status and existing loans. The credit score plays a crucial role in calculating your ability to repay. Since personal loans are unsecured, lenders would like to offer you a loan only if you have a high credit score and a good credit history.
- Decide on tenure and repayment: Take a personal loan for students from a lending institution or NBFC offering a flexible repayment term, as the monthly repayment amount will depend on the loan tenure. Use a Personal Loan EMI Calculator to choose an EMI amount and tenure suitable to your monthly budget.
- Make a request: A personal loan requires minimal documentation – proof of identity, proof of address, and proof of income. Check with your lending institution and gather all documents in a folder. If you are an existing customer, the documentation process may become easier.
- Choose the right lender: Many options are available, as almost all NBFCs and financial institutions offer personal loans. You can research different loan providers on various parameters to get the maximum benefits. These include interest rates, processing fees, late payment fees, pre-closing fees, the convenience of loan application and repayment, and customer reviews before choosing the right lender.
How to apply for a personal loan online?
Applying online is the most convenient and fastest way to get a personal loan quick approval. To apply for a personal loan online, follow these steps:
- Go to your loan provider’s website and select a personal loan.
- Click ‘Apply Now’.
- Enter your personal data and submit the form.
- The lender will assess your details, and you will receive a call or SMS accordingly.
- You will need to upload the necessary documents required by the lender.
- After approval, the lender will disburse the loan amount to your account.
How to apply for a personal loan for students offline?
You need to follow these steps to get a personal loan for students offline:
- Visit your nearest financial institution branch.
- The representative will guide you through the entire process.
- You will need to submit a duly completed and signed personal loan application and the necessary documents as required by the lender. The process can be hectic as manual processes back everything, so approval and disbursal may take a few days.
- After the loan is approved, the money will get credited to your registered bank account.
Pros and Cons of Getting a Personal Loan for Students
While a personal loan can be a great option for financing your education, there are a few things to consider before taking the plunge.
No end-use restriction: Unlike a student loan, which is strictly used for educational purposes, a personal loan for education has no end-use restriction. This means that you can use the loan amount to cover any expenses related to your education, including travel expenses, tuition fees, study materials, accommodation and meals.
Quick approval: Personal loans are usually approved quickly as they are collateral-free and require minimal documentation, including proof of identity, address and income.
Flexible repayment options: Personal loans for education usually come with flexible repayment options, allowing you to choose a repayment tenure and EMI amount that suits your monthly budget.
High interest rates: Personal loans usually come with high-interest rates compared to other types of loans, which can make them an expensive option for financing your education.
Credit score requirements: Since personal loans are unsecured, lenders usually require a high credit score and good credit history to approve the loan.
Repayment starts immediately: Unlike a student loan, which usually offers a grace period before repayment starts, personal loans for education require immediate repayment, which can be a burden for some borrowers.
A personal loan for students can be a great option for financing your education, especially if you need funds quickly and have a good credit score. However, before applying for a personal loan, it’s important to consider the pros and cons and choose a lender that offers competitive interest rates and flexible repayment options.
An education loan is a convenient option to finance your child’s education as it does not require a steady income and can be availed at an attractive interest rate. On the other hand, a personal loan for education is the most preferred option to finance your child’s education as the repayment starts immediately and can be for up to 5 years. Also, you may require extensive documentation for an education loan compared to a Personal Loan for education that can be easily applied for and approved online with new-age lenders like Fullerton India.