Education costs have gone through the roof due to consistently high inflation. Everyone might not be able to pay for a good college. Because of this, many college students have to take out loans to pay for their costs. But a few things could make them ineligible for a student loan or require a big down payment that they might not have. Personal loans might be better for students than borrowing from well-meaning but potentially risky family members or friends.
Can a Student Get a Personal Loan?
The reply to “Can students get a personal loan?” is “Yes, they can.” Students can get a personal loan and pay for their education with the money. This kind of loan is the best choice if students need money to pay for short-term courses like diplomas, certificates, or vocational courses.
Personal Loans for Students: Features and Benefits
- The highest loan amount is 15 million INR.
- The time to pay back the loan is flexible, ranging from 1 year to 5 years.
- Getting a student personal loan might make going to college a reality.
- It’s a great alternative to other ways to get credit.
- Students can borrow up to INR 5 lakh without putting anything of value up as collateral.
- The interest student pay on loans is tax deductible under Section 80E of the Income Tax Act.
- Short-term and vocational programmes benefit greatly from this kind of financing.
Documents Required to Get a Personal Loan for Students
To approve a personal loan for students, lenders need some paperwork.
|Identity/Age Proof (Any one)
|Ration cardPAN cardPassportAadhar cardDriving licenceVoter ID cardBirth certificate
|Address Proof (Anyone)
|Aadhaar cardPassportRation cardUtility billsDriving licence
|Last 3 months’ bank statementsBank passbook
|Passport size photographs
Conditions for Getting a Personal Loan for Students
Personal loans for students have easy and precise requirements, such as:
- Those who want to apply must have a monthly income of Rs. 13,500.
- There must be a direct deposit into the applicant’s bank account.
- Score of 650 or higher on Experian or CIBIL.
- Applicants must be between the ages of 21 and 57.
Things to Remember before Applying for Student Personal Loan
1. Determine Need
Students should know their needs before getting a personal loan. Personal loans are one-time loans, so they should know how much they need for tuition and other school costs. This will help students avoid borrowing too much and save money on interest.
2. Lender Choice
Most banks and NBFCs will give out personal loans. To get the most out of the benefits, lenders should be compared based on the interest rate, processing fee, pre-closure fees, how easy it is to apply, customer reviews, etc. Then choose the right one based on the comparison.
3. EMI Calculator
Online calculators can estimate monthly payments based on the loan amount, how long it will last, and the interest rate. The payments on a personal loan start right away. Calculating EMI helps students to check their loan affordability and monthly payments.
4. Approach Lender
Students can apply for a personal loan after choosing a lender and an amount. Anyone can do this online or at a lender’s branch. Before applying for one, find out everything about a personal loan, including the terms and limits. Also, get all the important papers and information ready.
What Should One Consider When Getting a Student Personal Loan?
1. Interest Rate
Personal loans have the highest interest rates, anywhere from 12 to 28 % per year (p.a.). On the other hand, the APR for a student loan is between 6% and 13% per year. If the applicants have a good credit history, they should use this when negotiating with the bank for a lower interest rate.
Most importantly, students don’t have to put up any assets as security for a personal loan like a Loan against property.
3. Fee to process
Students must pay a fee when applying for a loan at a bank or other financial institution. This fee can be anywhere from 1% to 3% of the total loan amount, just like the processing fee on a student loan.
4. Pre-payment Charges
Remember that most banks and financial institutions will charge a fee if anyone wants to pay off their personal loan in full or in part. The fees range from 2% to 5%, which can add up to a lot.
How to Get a Personal Loan for Students?
The easiest and fastest way to get a personal loan for students is to do it online. To get a personal loan online, do the following:
- Go to the lender’s official website
- Choose a Personal Loan from the list of loans.
- Select “Apply Now”
- Fill in the information and send the form.
- The lender will look over the information, and the applicant will get a call or text message.
- Applicants will have to upload the documents the lender needs or ask for them to be picked up.
- Once the approval is granted, the lender will immediately put the money into the bank account.
- Existing customers may apply using online banking, making the procedure quicker and simpler.
A student personal loan is the best way to pay for college because students don’t have to have a steady income, and the interest rates are reasonable. Parents or legal guardians must be the primary applicant if anyone is under 18 and doesn’t work. They can get a loan depending on their credit history and income. Personal loans are an alternative to educational loans if anyone needs money for the required school loan contribution or can’t get an educational loan.
Visit Piramal Finance to learn more about various types of loans and explore different products and services.