Is it Possible for a Student to Obtain a Personal Loan?

Oct 23rd 2023
Loan
Know How to Take Personal Loan for Students

Is it possible for a Student to Obtain a Personal Loan? Over time, the price of a college education has gone up dramatically. Due to this, the majority of students throughout the globe are dependent on outside financing sources like personal loans. Loans of this kind enable you to pay for the many costs related to your education, such as tuition or the purchase of books and supplies. This post will answer your questions if you're wondering if a student may obtain a personal loan.

Can I Take a Personal Loan as a Student?

Yes, students are eligible to obtain personal loans, is the response to the query. You can apply for a personal loan for students and use the proceeds to cover your educational expenses. These loans are usually the best option if you need money for short-term courses with low tuition, such as certificates, diplomas, or vocational training. Yes, you may finance your specialty courses in India and overseas and your further education by taking out a personal loan for students. Now let's examine the characteristics and advantages of these loans. Let's investigate further.

Salient Features of A Personal Loan For Students

  • Maximum loan amount: 15 lakh Indian rupees
  • The loan payback period is adjustable, with options ranging from one to five years.
  • Students might use personal loans to fulfil their aspirations of pursuing higher education.
  • It is a perfect substitute for other forms of credit.
  • For loans up to INR 5 lakh, you are not required to furnish any collateral.
  • Section 80E of the Income Tax Act allows you to deduct interest paid on your loan.
  • These loans are perfect for vocational and short-term courses.

Eligibility Criteria

  • You must be between the ages of 21 and 63.
  • A minimum of one year's work experience is required.
  • A credit score of at least 750 is ideal.
  • If you work for yourself, you must submit your tax returns as evidence of income.
  • If you work, you must present your bank statements and salary slips.
  • Should meet the lender's minimal wage requirements.

Required Documentation

The following paperwork is required when applying for a personal loan:

  • Documents proving age, identity, and residence, such as PAN, Aadhaar, passports, driver's licences, voter ID cards, employee ID cards, etc.
  • Salary slips for candidates that are employed
  • Three-month bank account statements
  • A pair of current passport-sized photos
  • For self-employed candidates, certified business registration and audited financial statements are required.

Things To Consider While Applying for a Personal Loan

A few considerations should be made before submitting an application for a personal loan. Here are some things to keep in mind.

1. Determine the appropriate sum.

The cost of education can be high, and you might have to pay for other expenses in addition to tuition. Remember to submit this when applying for a loan for educational purposes. Think about the price of your studies, your travels, etc. It will enable you to determine the appropriate amount and help you organise your spending more effectively. Either an under or an overestimation could not be helpful.

Also Read: Choose a Personal Loan Today to Manage Your Big Expenditures Easily

2. Select the appropriate payback period

While you are free to select the payback period, you should try to maintain it between a reasonable length and too short. A short period may result in a sizable monthly outflow, while a lengthy term may result in a high interest expense and raise the total cost of borrowing.

3. Verify the interest rate

It is crucial to review the interest rate as well as any additional borrowing expenses, such as processing fees or prepayment penalties. You might benefit from reduced interest rates if your credit score is high.

Can I use a personal loan amount to pay off a student loan?

It's possible that you might use a personal loan to pay off a student debt, but this would rely on the lender and their restrictions. A lot of personal loan providers have limitations on the kind of educational expenditures you can pay with your loan. Certain lenders let you to use a personal loan to settle your college debt. Though their payback durations are usually shorter, personal loan interest rates are frequently greater than student loans. Consequently, taking this path may wind up costing you more in the long term.

Also Read: What Are the Benefits of a Personal Loan?

FAQs

Is a personal loan more affordable than an education loan?

For students in India, education loans usually carry interest rates that are lower than those of personal loans. However, personal loans offer financial help for a range of education-related costs beyond tuition and can cover books, housing, transportation, and other educational demands. Education loans, on the other hand, are specifically designed to pay educational expenses.

Which loan terms are available for personal loans?

The loan can be paid back over a twelve- to sixty-month period.

For my further education, is it preferable to obtain a personal loan or a student loan?

You have to pay back a portion of your college costs using a student loan. It is also only intended to cover your course-related expenditures. A personal loan, on the other hand, is more adaptable and typically does not require collateral. Based on these variables, you are free to choose.

The Conclusion

You can apply for a personal loan as a student now that you know the answer to the question. The application process for a personal loan is simple to complete and requires little paperwork. The bank promptly deposits the loan money into your bank account upon approval of your loan. You may pay back the loan in manageable installments over the duration of your choice and benefit from tax advantages on interest payments.

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