How to get a personal loan for students in India in 2024?
In India, personal loans for students have become an essential financial resource to support education-related expenses.
Whether its tuition fees, books, accommodation, or other educational needs, personal loans can provide the necessary financial assistance.
This article will discuss the steps & considerations for obtaining a personal loan for students in India.
Eligibility Criteria
Before applying for a personal loan as a student, it’s crucial to understand the eligibility criteria set by lenders.
Typically, lenders require applicants to be at least 18 years old and Indian citizens. Some lenders may have additional age and income requirements.
Creditworthiness
Students often need a credit history, making qualifying for a personal loan challenging. Building a credit history can be beneficial in the long run, but in the short term, consider seeking a co-applicant or guarantor with a good credit score to increase your chances of loan approval.
Choose the Right Lender
Different lenders have varying policies and interest rates for personal loans. Research and compare offers from banks, credit unions, and online lenders/bankers to find the one that best suits your needs.
Some lenders offer specific education loans designed for students, which may have more favorable terms.
Type of Personal Loan
In India, students can apply for two types of personal loans:
- Secured Personal Loan: This type of loan requires collateral, such as a fixed deposit, to secure the loan. Secured loans generally have a lower interest rates and more favorable terms.
- Unsecured Personal Loan: Unsecured loans do not require collateral but may have bit higher interest rates than secured loans.
Documents Required
Prepare the necessary required documents for your loan application. Commonly required documents include:
- Identity proof (Aadhar card, passport, or voter ID).
- Address proof (utility bill or rental agreement).
- Proof of income (co-applicant or guarantor’s salary slips or bank statements).
- Academic records or admission letter.
Loan Amount and Tenure
Determine the loan amount you need and the repayment tenure. It’s essential to borrow only what you need to avoid unnecessary debt. Longer tenures may result in smaller EMIs and accrue more interest over time.
Interest Rates and Fees
Carefully review the interest rates, processing fees, and other charges associated with the loan. Compare offers from various lenders to find the most affordable option.
Application Process
Most lenders offer online loan applications. Fill out the application form accurately by providing all required information and documentation.
Ensure that your co-applicant or guarantor’s details are correctly mentioned if applicable.
Loan Approval and Disbursement
After the lender reviews your application, they will inform you of the approval status. Upon approval, the desired loan amount will be disbursed directly to your bank account or the educational institution, depending on the lender’s policies.
Repayment Plan
Develop a solid repayment plan to meet your monthly EMIs on time. Late or missed payments can adversely affect your credit score.
Conclusion
Securing a personal loan for students in India is a viable option to finance your education.
By understanding eligibility criteria, building creditworthiness, choosing the right lender, and carefully evaluating the terms and conditions, you can successfully obtain a personal loan that supports your educational goals.
Remember to borrow responsibly and maintain financial discipline throughout your loan tenure.
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