Higher education in India is important as well as expensive if one wants to study in a reputed college/university. Be it a minor professional course after graduation or a full-time degree course, the fees for the program are less likely to be under budget. However, one thing can help students or their parents from the harshness of educational expenses – a personal loan. With the help of personal loans, students can not only meet the expenses of education but can also remain tension-free by paying small and affordable installments after a certain period of time.
A personal loan for education can help you in various ways; you can save your hard-cash for any crisis or in case you don’t have enough funds for higher studies. Moreover, being an unsecured loan, you won’t have to pledge anything and the eligibility is also considered on some basic factors, unlike a secured or business loan which requires a lot of hassles in form of criteria.
A personal loan can prove to be of great utility to fund higher education. Source: ETMONEY
Benefits of a personal loan for education
There are various compelling reasons as to why you should opt for a personal loan for higher education instead of an education loan. Well, the answer lies simply in the fact that the eligibility criteria for an educational loan are much strenuous than that of a personal one. Here are the two key benefits of a personal loan over an education loan.
1. Availability of education loan
Your eligibility for an education loan would be considered only if you have already secured your admission by qualifying in the list set by the institute. Also, in case your selected institute is out of the preset list of banks, your chance of getting the loan approved is almost nil.
2. Expenses covered
The education loan may not cover all the expenses you require for your higher studies. This is when the perks of a personal loan sweep in. With the lender’s being almost ready to provide a personal loan, you can enjoy a good amount that would meet both your educational and additional expenses, if any.
It can be said that personal loan has made it easier for students to grab a place in their dream programs like never before. With the help of its easy monthly installment, one can pursue any degree course without any problem. Also, there are no harsh eligibility criteria that would drive one away from getting qualified for a personal loan.
If you want to check the procedure for securing a personal loan, here you go:
The personal loan application process is extremely easy. All you will need is to submit your basic details that include valid identity proof, earning proof, citizenship proof, address, and the likes. You can apply for a loan online.
Discussion with the lender:
Once you have applied for a personal loan, the lender may want to initiate a conversation with you, over the phone or in person. This communication will be held just to understand your need for loan and repayment ability.
Submission of final details:
Once approved, you will be required to submit some necessary details such as bank account number, details of monthly income, etc.
Notably, the approval and sanctioning of a personal loan are the easiest among the others. This is why many people opt for a personal loan for various requirements.
Your eligibility criteria include
Now, besides the basic requirements for a personal loan, there are several things you must check before you apply for the loan since your lender will dig in those details anyhow. This is only to know if you are capable enough of paying the debt to the bank. Since a personal loan does not require collateral, it is just from the side of the lender to check the details of your repayment capabilities. Here are a few things the lender would go through-
CIBIL score matters a lot
If you are seeking a personal loan, your CIBIL score is checked, which plays a vital role in the approval of the loan application. CIBIL score is a credit rating which is basically a numerical expression of financial transaction records of a person at a particular period of time. It ranges from 300 – 900 and the maintenance of the score of 700 and above is considered satisfying. Maintaining a good CIBIL score is very important for any loan.
Your banking history
What type of account holder you are is revealed through your banking habits. The banking habit of a customer reveals his capacity, transaction history, and nature in terms of savings and expenses. The better the savings, the better chances you have for getting the loan approved. Moreover, your bank transaction is one of the key considerations for any loan.
Whether a salaried person or self-employed
This is also related to check your capacity for repayment. In fact, banks and lenders are keen to know how you shall repay the debt, so they take every possible measure to make sure you meet the requirements successfully. For example, the criteria may include INR 35,000 monthly income along with 2 years of employment. Some banks may deem you eligible even if you earn lesser than that, which usually depends on the loan amount.