As the cost-of-living rises, so does the cost of attending school both in India and abroad. It's possible that not everyone can afford a good college. As a result, many college students rely on student loans to cover the costs of their education.
However, there are several factors that could affect whether you qualify for a student loan or necessitate a large out-of-pocket payment that you may not be able to manage. Under these circumstances, it is always advised to opt for a personal loan for students rather than borrow money from family or friends.
It's important to know the ins and outs of a personal loan and how it differs from a student loan before deciding to use one to pay for school.
What is an educational loan?
Educational or student loans can only be utilized for the course you specified when applying. It covers all course-related expenses. Admission, tuition, library, laptop, book, travel (if studying abroad), etc. Students and parents are co-applicants.
What are personal loans?
Personal loans are unsecured and need minimal documentation. They have no end-use restrictions, unlike school loans. It's easy to borrow funds for personal and financial purposes and can be reimbursed according to the lender's terms.
Since many Indian lenders don't lend to students, it's best to check the personal loan disbursement process and eligibility beforehand.
Easy Steps to Follow While Availing a Personal Loan for Students
1. Determine the precise need through calculation
Know your needs before applying for a personal loan for students to finance your education. You should budget carefully for tuition and other school-related costs before taking out a personal loan because, unlike a student loan, it is not renewable. As a result, you'll be able to borrow just the right amount of money to cover all your education-related costs without incurring any unnecessary interest charges.
2. Verify That You Are Qualified
It's possible that the sum you're asked to borrow in the form of a personal loan may exceed the sum for which you qualify. Therefore, after determining your needs, it is essential to investigate your loan qualification options. Lenders will evaluate factors including your credit score, credit history, age, work status, monthly income, previous debts, and more to determine if you qualify for a loan. Repayment capability is heavily influenced by your credit score. Online calculators are available on a variety of websites to help you determine how much of a loan you might be qualified for.
3. Locate the Best Lender
Almost any financial institution, from large banks to small NBFCs, can provide a personal loan. However, to reap the most benefits, it is important to shop around for the best possible terms by carefully considering factors like interest rate, processing cost, late payment charges, pre-closure fees, how easy it is to apply for and repay the loan, customer reviews, etc.
4. Determine Your Monthly Instalment Amount
The online calculator will provide you with a monthly payment based on the loan amount, the loan term, and the lender's interest rate. The monthly payment on a personal loan, in contrast to student loans, will begin right away. Be sure that you or your guardian can afford the monthly payments on the loan amount you're considering.
5. Approach the Lender
Having settled on a desired loan amount and lender, you can now apply for a personal loan. Both online and in-person applications are accepted, so it doesn't matter where you are. Before asking for a personal loan, it's a good idea to gather all the specifics, such as the terms and circumstances, and verify that there are no unexpected fees or charges. Have all the paperwork and information you'll need handy, too.
If you can't get an educational loan or need money for the necessary contribution, you can always get a personal loan for students. To avoid surprises, read the terms and conditions and loan agreement before taking out a personal loan.
