An education loan is the choice of many when it comes to meeting expenses linked to higher education, as it offers multiple benefits to users.
But, education loans have some limitations and cannot be taken for every kind of course. For instance, it is not usually possible to get an educational loan for online courses in India, which are a popular alternative to expensive full-time degree courses. This includes certification courses, as well as courses from certain private universities.
You may have to depend on your savings and other financial means to get enrolled in the course. But it makes one feel apprehensive to do so, especially during uncertain times when the pressure of building a healthy savings balance is paramount. This is also especially difficult for young professionals who are trying to pursue part-time courses to further their career paths but may have other commitments, which makes the choice of depleting one’s savings for certification (or some other) course that much more difficult.
In such a case, you can apply for a personal loan for higher education. It acts as a savior in the time of need and provides necessary funding to upskill and stay relevant in the job market.
Personal Loan for Higher Education
Personal loans are a quite versatile loan and are easier to obtain compared to any other loan category. It is a great alternative to the education loan and helps to meet your budgetary requirement without risking your assets.
Must Read: How Much Personal Loan Can I Get?
Benefits of Taking a Personal Loan
Let's check out why you should take a personal loan for online courses in India.
- Unsecured Loan Type
Personal loans don't require you to put up any collateral or even a guarantor (unlike educational loans, where usually the student’s parent/guardian is required to provide a guarantee).
- Higher Borrowing Limit
Banks and financial institutions provide a higher borrowing limit on a personal loan that helps you to cover your requirements easily, whereas educational loans only cover specific aspects of your expenses such as tuition/cost of books.
- Attractive Interest Rate
You can get a very attractive interest rate on a personal loan and the rates are also fixed during the loan tenure. It helps you to keep your EMIs affordable and plan the repayments accordingly.
- Flexible Repayment Tenure
A personal loan has a repayment tenor of 12-60 months and you have the flexibility to choose the repayment tenure depending on your financials.
- Quick Disbursal
The personal loan applications are processed within 36-72 hours and money is credited directly to your bank account. This feature makes it an ideal financing option for meeting all your emergency and other planned expenditures.
- Simple Eligibility Criteria
Personal loans have the most simple eligibility criteria among all the loan categories. The loans are disbursed based on your employment status/ financial status, credit score, and the applicant should be between 21 and 65 years of age.
- Minimum Documentation
The documents required to get a personal loan include KYC documents, bank account statements, salary slips, and employee ID cards, income tax returns, etc. Whereas education loans will also require you to submit your academic documents (like mark sheets, etc.), acceptance letter from the university, etc. in addition to the KYC, employment, and income details of the guarantor.
5 Steps to How to Get a Personal Loan in India
Following are the steps to get a personal loan for higher education in India:
- Determine your Requirement
You first need to determine your actual requirement factoring your current financial situation and future scenarios. For example: to fund your enrolment in an online course, you may need Rs 50,000 or Rs 75,000 or full fee of the online course depending on your savings level and future financial commitments. Therefore, it is important to determine the right amount, so that you borrow neither less nor in excess while choosing the loan amount.
- Check Personal Loan Eligibility
Once you know the actual requirement, you should check the personal loan eligibility criteria with your financial institution. How much can you borrow, what will be the expected rate of interest, etc will depend on how you satisfy the lender’s eligibility criteria as well as your monthly income and existing monthly obligations.
You can use the personal loan eligibility calculator online to know your loan amount eligibility and the cost over the period.
- Calculate Your EMIs and Loan Tenure
Using an online personal loan calculator, you can calculate the loan repayments every month and arrive at the loan tenure which you are comfortable with.
It is important to choose the right loan tenure, else it could impact your finances negatively. A shorter tenure will need you to make higher allocation towards repayment and having a long tenure translate in a higher average cost of borrowing.
It would be a good idea to estimate a wide range for the interest rate while using the personal loan EMI calculator. This is because the interest rate that is offered to you will once again depend on your individual profile, how well you satisfy the lender’s criteria, and your credit score.
- Approach the Bank/Financial Institution
Once you have done your homework and necessary research, you can approach your bank or financial institution to apply for a personal loan. These days, you also have the option to apply for a personal loan online, from the comfort of home. You can also compare the interest rates offered by different banks/financial institutions and terms and conditions before selecting one. This is a better idea, as submitting multiple applications on different lenders’ websites could affect your credit score.
- Submit the Documents
Now, check out what documents are required for a successful approval of a personal loan.
Generally, you will need to submit the hard copies of the KYC documents (PAN Card, AADHAR Card), proof-of-address, employment status, salary slips, business turnover report (for self-employed), bank statement and IT returns, in addition to the completed loan application and recent passport size photographs.
Once your personal loan application is approved, and all the documents you submitted have passed the verification checks, the loan amount is directly credited to your bank account.
Must Read: Education Loan in India: 7 Things you need to know
No doubt personal loans are considered a popular financing option. Whether it is about meeting the emergency financial requirements or funding higher studies, it is the savior for many in times of need. It offers both accessibility and flexibility to users.
In a way, personal loan helps you to do better in life and helps to reach your true potential. It also helps young professionals become independent by taking charge of their own finances without having to depend on family/friends.
Therefore, never let lack of funds restrict your growth. Opt for a personal loan to fund your higher studies today, and get yourself enrolled in the course you need to boost your career.