What are your future goals? The first step for completing your goals is pursuing “higher education”. The cost of a college education can often be an obstacle whether you want to study in India or abroad, college education fees are increasing daily.
That’s where personal loans come in. It includes tuition fees, books, and other educational expenses. In this blog, we’ll understand the personal loan for higher education, Eligibility Criteria, How to Apply, Benefits, Tips to Secure the Best Personal Loan etc.
Understanding Personal Loans for Higher Education
Understanding personal loans is quite simple, it is a type of unsecured loan that you can use for your individual needs it can do anything for weddings, shopping, start-ups etc. Also, it includes Education loans.
Unlike education loans, which often come with specific terms and requirements, personal loans offer more flexibility in using the funds. This flexibility makes them an attractive option for covering not only tuition fees but also other essential college-related costs such as textbooks, accommodation, and living expenses.
Students should choose personal loans over other types of loans because they offer great flexibility and easy access. Whether you need to pay for tuition, buy textbooks, cover rent, or handle daily expenses, a personal loan can meet all these needs without the limitations that come with other specific loans.
Eligibility Criteria for Personal Education Loans in India
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Eligibility Criteria |
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| Age | Typically it should be between 18 to 35 years old |
| Income | There should be a stable source of income, either through part-time work, parental income, or a co-signer’s income. |
| Credit score | A good credit score is above 650, maintain this for Favourable terms |
How to Apply for a Personal Loan for Higher Education
- Do the Research and Compare Loan Options:
- You can check for lenders who offer personal loans only for education purposes. Then compare the interest rate, repayment terms, and any additional charges.
- Check Eligibility Criteria:
- Make sure the accuracy of income, age and credit score requirements sent which is set by the lender.
- Requirement of Necessary Documents:
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- Proof of identity (Aadhaar card, passport, etc.)
- Proof of address (utility bill, rental agreement, etc.)
- Proof of admission to an educational institution (admission letter or fee receipt)
- Academic records (transcripts, certificates)
- Income proof (salary slips, bank statements)
- Employment details (if required)
- Fill Out the Application Form:
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- Fill out the online or paper application with accurate information and check the form twice.
- Submit the Application:
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- Submit the application form along with the needed documents.
- Await Approval:
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- Wait for the lender’s approval. They may ask for more information and verifications.
- Disbursement of Amount:
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- The loan amount will be disbursed to your account or directly to the education institution after signing the agreement.
PayMe makes it easy to get a personal loan for higher education in just a few minutes. With PayMe’s personal loan, you can enjoy instant approval with minimal paperwork and no hidden fees. Simply log in to PayMe’s official website/PayMe loan app, register with your mobile number, apply for the loan, and have the funds deposited directly into your account!
Benefits of Personal Loans for Students
Flexibility in Usage
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- Can be used for various expenses such as tuition, living expenses, books, and supplies.
Quick Disbursement and Minimal Paperwork
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- The fast approval process with minimal documentation requirements, makes it convenient for students.
No Collateral is Required (in Many Cases)
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- Often available without the need for collateral, reducing the burden on students and their families.
Tips to Secure the Best Personal Loan for Education
- Compare Interest Rates and Loan Terms from Different Lenders
- Research and compare offers from various lenders to find the most competitive rates and favourable terms.
- Maintain a good Credit Score Before Applying
- Check your credit report and work on improving your credit score by paying off existing debts and managing your finances well.
- Consider Potential Co-signers
- A co-signer with a strong credit history can increase your chances of loan approval and might help you get better terms.
- Understand fees
- Be aware of any additional fees such as origination fees, late fees, or prepayment penalties that could affect the overall cost of the loan.
Top Banks and Financial Institutions Offering Personal Loans for Education
| Factors | State Bank of India | HDFC Bank | ICICI Bank | Axis Bank |
PNB for study abroad |
| Maximum Loan | ₹20 lakhs | ₹20 lakhs | ₹50 lakh for courses in India and Rs 1 crore for those abroad | ₹40 lakh | Need-based finance based on repayment capacity |
| Tenure of loan | 15 yrs excluding a moratorium of 1 yr | Up to 15 yrs excluding moratorium of 1 yr | 5yrs for loans without collateral and 7yrs with collateral | 15 years | 15 years |
| Margin requirement | For loans up to ₹4 lakh -Nil Above 4 lakh- 5% for studies in India or 15% for studies abroad | For loans up to ₹4 lakh -Nil Above 4 lakh- 5% for studies in India or 15% for studies abroad | No margin for loans upto ₹ 20 lakh. | Up to ₹4L | No margin for loans up to Rs 4 lakh. 15% for those above ₹4 lakh |
| Rate of interest | 10.05% fixed | 9.55 -13.25% | Starts from 11.75% | 15.2% | Floating Rate based on Repo Rate Up to ₹7.5L-9.05% Above 7.5L -9.75% |
| Processing Fees charged | Nil for loans up to ₹20L | ₹1000 or 1% of the loan, whichever is higher | 1% of the loan amount plus taxes | Nil up to ₹10 lakh, Rs 15000+GST for amounts up to ₹20 L, 0.75% of differential loan amount above ₹20 lacs + GST | 1% of the loan with a minimum of ₹10000 |
FAQs
For educational loans what are the Eligibility criteria?
Education loans are specifically designed to cover educational expenses and often come with lower interest rates and longer repayment terms. Personal loans, on the other hand, can be used for any purpose, and may have higher interest rates and shorter repayment periods.
What are the Eligibility Criteria for a Personal Loan for Education?
Eligibility criteria typically include a good credit score, stable income, and in some cases, a co-signer. Specific criteria vary by lender.
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