Apply For A Personal Loan For Higher Education Online

A borrower can use a personal loan to pay for any family member’s education. Read on to know how to apply for a personal loan for higher education Now!

6 Oct,2022 18:09 IST 39 views
Apply For A Personal Loan For Higher Education Online

Many parents are turning to loans in order to pay for their children’s college or university fees as a result of the rising cost of higher education. An education loan can be helpful when a lack of money is the main obstacle. However, if candidates are not qualified for an education loan, financing the expense with a personal loan makes sense.

In India, a majority of banks and non-banking finance companies (NBFCs) provide personal loans for higher education. A borrower can use a personal loan, unlike a traditional student loan or education loan, to pay for any family member’s education.

An education loan has lower interest rates, provides tax advantages, and gives the principal borrower—the student—time to repay the debt. However, the personal loan’s repayment starts from the first month after the money is disbursed. Still, a personal loan is a popular choice thanks to multiple benefits.

Advantages Of Personal Loan To Fund Higher Education

• There are no limitations on how the money can be used. Therefore, the loan can be used to pay for any type of educational expense, including tuition, housing costs, etc.
• Personal loans feature a quick loan approval process and minimum documentation requirements.
• Personal loans can cover the entire cost, unlike student loans where the borrower must contribute a modest portion of the overall expense.
• Personal loans are typically unsecured loans and, so don’t require the borrower to pledge any asset.
• Banks and NBFCs offer personal loans for studies up to Rs 25-30 lakh and a term of 12 to 60 months.

Documentation For Personal Loans

Most lenders require only a handful of documents for personal loan approvals. These include:

• Bank statements for the most recent three to six months.
• Address proof: Telephone or electricity bill; Voter ID card; Aadhaar card; Passport; Driving license.
• Identity proof: Voter ID, Aadhaar card, Passport, Driving license.
• Age proof: Birth certificate or Class 10 education certificate.
• Latest salary slips and/or the latest income-tax return form.

Online Approval Process

All banks and NBFCs examine the applicant’s age, income, employment status, repayment history, and credit score before approving a personal loan. If they are satisfied with the prospective borrower’s credentials, they make a loan offer. After the borrower accepts the terms and conditions of the loan, the money is transferred to the borrower’s account immediately.

While the actual application procedure for personal loans may vary from lender to lender, most lenders these days provide an online process to speed up the entire process from sanction to disbursal.

However, some traditional banks may still want the borrower to visit the physical branch to submit documents, complete the verification process and take disbursal of the loan amount.

Broadly, these are the main steps to apply for a personal loan online:

1. Choose A Lender:

The first step is to choose a bank or an NBFC. Borrowers have scores of lenders to choose from, but not every bank or NBFC may offer a fully digital process. So, it is important for borrowers to choose a lender that provides a completely online process.

2. Application Form:

Selecting a lender maybe the hard part but the next steps are simple. Borrowers need to just visit the website or the mobile app of the lender and fill up the loan application form. They should, however, ensure that they add all details correctly.

3. Upload Documents:

Along with the application form, the borrower must upload a copy of documents such as identity and address proofs as well as bank statements and salary or income proofs.

4. Verification:

After the borrower submits the application form and other documents, an executive of the bank or the NBFC initiates contact and finishes the remaining steps, including document verification.

5. Approval And Disbursal:

After completing the paperwork, the lender approves the loan and transfers the money directly into the bank account of the borrower.

Conclusion

A vast majority of lenders usually have onerous qualifying requirements before approving student loans. A loan application may be turned down due to a low credit score, a lack of supporting documentation, or the higher education course as well as the college that was selected.

A personal loan is the ideal alternative for borrowers who are denied an education loan. Compared to a normal college loan, a personal loan is simpler to apply for and gives more flexibility in terms of usage and repayment.

Borrowers should accurately assess all costs related to travel, hostel, coaching and study materials. If the loan is for a college course outside India, borrowers should take into account the living cost of that country.

IIFL Finance, one of India’s top NBFCs, follows a completely online process to approve personal loans. The application can be completed on its website within minutes. After verification of the loan application form and supporting documents, IIFL Finance transfer the money directly into the borrower’s account within 24 hours.

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