How To Get Personal Loans For Students In India?

Higher education has become increasingly expensive over time. As a result, most students worldwide have to rely on loans to fund their academic dreams. These loans cover various expenses, such as books, supplies, and tuition.

This article highlights how to get personal loans for students in India.

Requirements To Get A Personal Loan For Students

Follow these steps to qualify for a personal loan for students in India:

1. Maintain A Good Credit Score

CIBIL scores of 750 or higher are necessary to get a personal loan approved quickly. Apply with a co-applicant or guarantor if you do not have a good credit score. You can also apply for the loan after you have improved your score to the mandatory number.

2. Meet The Eligibility Terms

The lender’s eligibility terms vary. Before applying for a loan with a specific financial institution, you must check the eligibility criteria to ensure you qualify. The requirements may include age criteria, income requirements based on your city of residence, and other criteria.

3. Get The Documents In Order

You must submit all the paperwork required for a personal loan, including KYC documents, employee identifications, last two months' pay slips, and last three months' bank statements. Banks may not require all of the above documents from pre-approved or existing customers.

How To Apply For A Personal Loan For Students?

IIFL Finance makes it easy to get a personal loan. Follow the steps below:

Step 1: Click the 'Apply Now' button on the personal loan page.
Step 2: Enter the required information and verify your mobile number with the OTP.
Step 3: Determine whether you qualify for a loan based on your credit score.
Step 4: Set up a mandate and receive the funds within 8 hours.

Points To Remember Before Applying

Before you apply for a personal loan, you must keep the following few things in mind.

1. Estimate Your Expenses

The cost of education abroad is high. When calculating expenses, you must account for travel expenses, tuition fees, study material costs, any coaching you need, and lodgings and boarding, which are not covered by an education loan. Determine the cost of living in the country by talking to family and friends who are residents there. By estimating your costs accurately, you can determine the amount you need.

2. Decide Tenure And Repayment

Look for a bank that offers a flexible repayment period if you plan to acquire a personal loan for students. While you are a student, you may not earn as much as when you were a working professional. Therefore, affordable EMIs are vital to ensure a lesser financial burden. Achieve an optimal monthly outlay by balancing amount and tenure.

3. Check The Rate Of Interest

The interest rate and other borrowing costs, like processing fees, are a part of the personal loan. Therefore, you must check such amounts before applying for a loan. The higher the interest rate and charges, the more you have to repay.

4. Pre-Payment Charges

You should part-pay or foreclose your loans when you start working or have adequate funds to save on future interest payments. Part-paying or foreclosing your personal loan will typically result in prepayment fees from most banks and financial institutions.

A small charge can make a big difference, especially if the dues are high. Lenders charge between 2% and 5%, depending on their size. Hence, make sure to also check the prepayment penalty before taking a loan.

Apply For A Personal Loan With IIFL Finance

Fulfill your higher education dreams with a personal loan from IIFL Finance. You can apply for a personal loan without much hassle, requiring minimal documentation. Following approval, the bank deposits the loan amount directly into your account. The interest you pay on a loan can be tax-deductible, and you can repay the loan over a convenient timeframe with low EMIs.

Frequently Asked Questions:

Q1. Can you use a personal loan for education?
Ans. Personal Loans are available for many purposes, including education, whether for yourself or a family member.

Q2. Why would you choose a personal loan over an education loan for higher education?
Ans. An education loan is one of the most popular ways to finance higher education. However, it is vital to note that most of these loans require a substantial margin of self-funding. Depending on the loan amount, lenders may require you to cover a large portion of the tuition fees. As a result, you may be better off taking out a personal loan rather than an education loan.