Understanding How Personal Loan is the Best Bet for Education
Usually, every student in India aspires to study at the world’s top universities. But in most cases, their dreams are not fulfilled even after qualifying for entrance tests and interviews—the reason: non-availability of funds or insufficient savings. The same reason is also valid for professionals looking to upgrade their qualifications for better avenues.
A personal loan for education, also called an education loan, offered by top NBFCs and lending institutions in India, is the most preferred funding option to overcome such situations.
In this article, we will discuss Personal Loans for education in detail and understand their benefits.
What is Personal Loan for Education?
A personal loan for education is an unsecured loan provided by lending institutions and NBFCs for education-related purposes. This covers tuition fees, accommodation (rent), student supplies, and other expenses, such as food and travel.
The best part about a personal loan for education is that it does not require collateral to secure the loan, making it risk-free for the borrower.
These loans are offered with competitive interest rates and flexible repayment tenures to salaried professionals with minimum documentation.
Many conventional financial institutions also offer Student Loans; however, these loans differ from Personal Loans for education due to various conditions.
Personal Loan for Education vs Student Loan
A few factors that can help differentiate the two types of loans are below:
Whenever the loan amount is thought of, the financial condition of the loan bearer needs a thorough look. A personal loan for education is often the right option as even the travel and living expenses are covered besides the tuition fees. On the other hand, student loan is solely for tuition fee expenses.
A student loan requires the bearer to be of sound academic background with the best choice of institute and course. Also, the stringent criteria of the financial institution should be met to get the loan.
On the other hand, Personal Loans for education require the applicant to be a salaried professional. The applicant should fulfil the minimum eligibility criteria of the NBFC, which generally include:
- Minimum monthly salary of Rs. 20000
- Work experience of at least 12 months with six months in the current company
- Age between 21-58 years
- A credit score of 630 or above
In the case of a Personal Loan for education, the first month marks the beginning of loan repayment. The borrower can choose from a tenure of 12-48 months.
In contrast, the repayment period of a student loan starts six months after the course completion, which comes as a financial commitment for the applicant, who is obligated to pay even before they start earning.
The interest rates for Personal Loan for education are competitive and depend on the applicant’s eligibility, including age, salary, and credit score. The shorter the tenure, the lesser the payable interest, while the longer the tenure, the more the interest payable by the borrower.
In comparison, a student loan may have low-interest rates, but its eligibility criteria and purpose are strict.
The Loan Process
Getting a Personal Loan for education is much easier and quicker than getting student loans. New-age lending institutions like Clix Capital provide Education Loans up to Rs 10 lakhs online with minimum documentation and competitive interest rates. While the student loans offered by conventional financial institutions require detailed documentation, multiple visits to their offices, and require parent or guardian as guarantor.
Documentation Required for an Education Loan
You can get a Personal Loan for education with the basic documents required to validate your identity, residential address and income.
Here are the required documents for the Education Loan:
- Identity proof – Aadhar card or Voter ID
- Address proof – Aadhar card or Voter ID
- Income proof – Last three months’ salary slips or current year’s Form 16
How to Apply for an Instant Education Loan?
Applying for a Personal Loan for education online is quite simple and easy. Follow the below steps to apply on the lending institution’s website and get instant approval.
Step 1: Visit the lending institution’s website and click on Personal Loan – Education.
Step 2: Register with your mobile number and fill out the application form with basic details.
Step 3: Wait for instant verification and approval.
Step 4: Once approved, you will receive the loan offer.
Step 5: Accept the loan offer and get funds disbursed to your account instantly.
Now that you know the advantages of a Personal Loan for education, it’s time to make a decision. Undoubtedly, a Personal Loan is a smart investment in education, be it for personal qualification upgradation or building the future of your child. Choose a reliable lending institution like Clix Capital to avail the Education Loan and get instant approval and quick disbursal online.
About the Author
Amaira sharma is finance expert and former business growth strategist who has more than 8+ years experience in the industry, now she helps others to get better financial stability and standards. She loves to write useful tips on personal finance and businesses.