How To Get Personal Loan For Students In India?

Quality education is often the foundation of a successful career. However, rising tuition, accommodation, and other educational expenses can pose a significant challenge.

Fortunately, there is a solution: personal loans for students. These loans are specifically designed to support students in covering their educational costs, giving them the financial freedom to focus on their studies without worrying about money.

In this blog, we will explore what personal loans for students are, the requirements to get one, the benefits of using them for education, and the steps to apply for one in India. Let's dive into the details!

What is a Personal Loan for Students?

A personal loan for students is an unsecured loan offered to help students meet the expenses related to their education. This could cover tuition fees, hostel or accommodation costs, transportation, textbooks, laptops, and other academic necessities. Unlike traditional student loans, which are secured loans (often requiring a guarantor or collateral), personal loans for students do not require any asset to be pledged, making them more accessible.

The key benefit of personal loans for students is the flexibility they provide. The loan amount can be used for various purposes related to education, without being tied to a specific institution or program. Additionally, the loan can help students manage their financial obligations without having to depend entirely on parents or guardians.

Can a Student Get a Personal Loan?

Yes, a student can get a personal loan. However, it's important to note that personal loan for students in India often has some specific eligibility criteria. Since most students are not earning a regular income, lenders may require a co-applicant or guarantor (often a parent or guardian) to ensure the loan repayment. Additionally, some lenders may approve personal loans for students with a part-time job or other sources of income.

Requirements to Get Personal Loans for Students

Here are the basic requirements for students to get a personal loan in India:

Good CIBIL Score

Having a good credit score is one of the most important requirements. A CIBIL score above 700 is usually considered optimal for students getting personal loans. A higher score increases your chances of approval and helps you secure better loan terms.

Eligibility Criteria

Each lender has its own set of eligibility criteria that must be met. These may include factors such as citizenship, age (usually 18 and above), and, in some cases, a minimum income requirement for the student or their guarantor.

Check Personal Loan Eligibility using Personal loan eligibility calculator online

Proper Documentation

Proper documentation is essential to smoothly complete the loan application process. These generally include:

• KYC documents
• Address proof
• Bank statements
• Income proof (if applicable)
• Educational documents

Perks of Using Personal Loans for Education

Using a personal loan to fund your education can be an excellent option, especially when compared to other financial alternatives. Here are these:

• Personal loans are unsecured loans. That means you need not pledge any collateral. This gives students peace of mind, as they don't have to risk their or their family's assets.
• Personal loans for students are processed faster than traditional educational loans. Once approved, the funds can be disbursed within days, helping students meet urgent financial needs such as admission fees or book purchases.
• Personal loans have relatively simple requirements. This makes them accessible to a broader group of students compared to other types of loans.
• Most personal loans offer flexible repayment tenures. Students can choose a tenure that suits their future financial situation, ensuring that the EMIs are manageable.
• The interest rates on personal loans for students can be quite competitive. This allows students to borrow at affordable rates and focus on their education without being overwhelmed by financial stress.

How to Get a Personal Loan for Students?

If you're considering applying for a personal loan to fund your education, follow these steps to ensure a smooth process:

Start by researching and comparing various lenders. Different lenders offer different interest rates, loan terms, and eligibility criteria. Look for lenders offering favourable student terms, such as lower interest rates or flexible repayment options.

Recommended Read: How to Find Good Personal Loan Providers?

Calculate how much money you will need for your education, including tuition fees, accommodation, study materials, and living expenses.

The tenure of your personal loan will determine the amount of your monthly EMI. A shorter tenure means higher EMIs but lower interest payments, while a longer tenure reduces your monthly EMI but increases the total interest paid.

Once you have selected your lender and determined the loan amount and tenure, start gathering the necessary documents.

After gathering all the necessary documents, fill out the personal loan application form provided by the lender. Submit the form along with the required documents for verification.

Things to Remember When Applying for Personal Loans for Students

• Don't rush into accepting the first loan offer you receive. Always compare different lenders, loan terms, and interest rates to get the best deal.
• Before deciding on the loan amount and tenure, use a personal loan EMI calculator to estimate your monthly payments. This will help you choose an amount and tenure you can comfortably repay.
• Review the loan terms carefully to identify any hidden fees, such as processing fees, prepayment charges, or late payment penalties.
• Before signing the loan agreement, ensure you fully understand the repayment schedule and terms.

Also Read: 4-Stage Personal Loan Verification Process You Must Know

Conclusion

A personal loan for students in India is a great way to finance your education and meet related expenses. They allow students to pursue their dreams without financial worries with flexible terms, affordable rates, and simple eligibility criteria.