Education loans to study abroad are quite easy to get these days. However, when you need a large amount of loan say above INR 4 lakhs, you need to pledge some kind of collateral. What if you come to know that you can get loans of up to INR 40-50 lakhs for your education without collateral? Here is the scope. Several banks and NBFCs in India offer personal loans for educational purposes to students without any collateral.
This is different from unsecured education loans as the amount in an education loan is limited while a personal loan gives you the flexibility to get a higher amount. Let’s check all the major features, benefits and eligibility of these loans.
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Also Read: Want a quick personal loan for education? Check out all the information on Bajaj Finserv Personal Loan for Higher Education
What is a Personal Loan for Education?
Personal loans for education are unsecured loans that are provided to students who want to pursue higher education abroad or in India. The interest rates are affordable and loans are approved quickly. The bank offers personal loans for educational purposes of up to INR 40 lakhs. Several banks and NBFCs offer more amount depending on your income or the income of the co-applicant or parents. One of the major benefits of a personal loan is that you don’t have to mortgage anything to get the loan.
- Any Indian citizen who wants to pursue higher studies can apply for a personal loan
- Flexible repayment systems are available for personal loans. Some banks and NBFCs allow a repayment period of up to 72 months.
- You can also get a top-up education loan under the same loan account subject to the terms and conditions of the lender.
- Some of the common schemes are Bajaj Finserv Personal Loan for Education, HDFC Personal loan etc.
Features of Personal Loan for Higher Education
Unlike education loans, personal loans for education are collateral-free loans and you can get the loan if you have secured at least 50% marks in the last qualifying examination and at the higher secondary level. The loan covers all major expenses such as tuition fees, accommodation costs, air tickets, insurance, funds required for emergencies etc. You can also get additional funds for debt consolidation if you have any pending loans or credit card bills.
- The interest rate for personal loans starts from as low as 10%. This may vary depending on the lender.
- Some of the top lenders offering personal loans for educational purposes are Bajaj Finserv, IDFC First Bank, HDFC Bank, IndusInd Bank etc.
- You can get up to 100% of your total requirement through a personal loan and no margin money will be required subject to terms and conditions.
Eligibility Criteria for Personal Loan
Eligibility criteria for a personal loan are laid by the financial institution or the banks as per the directions given by the Reserve Bank of India. Before applying for the loan, you must ensure that you are fulfilling all the essential eligibility criteria. Check the details below:
- You must be an Indian citizen
- The monthly income of the applicant or co-applicant/parent must be above INR 25000 or any amount prescribed by the lending institution.
- The debt-to-income ratio must be less than 40% as it will ensure the maximum eligible amount of loan.
- You must have secured admission to a listed or affiliated university abroad.
- The credit score of the applicant must be above 700 or 650 (based on the terms and conditions of the lending institution)
Also Read: HDFC Bank is one of the most preferred choices for personal loans. Check out all the information on HDFC Bank Personal Loan for Education
How to Apply Online?
Most of the banks or lenders have developed online portals for personal loan applications. You just need to visit the bank’s official website and fill out the application form. The bank will initiate the verification and CIBIL check and then approve the loan if found eligible. Check the steps involved in loan application:
- Visit the official website of the lending institution
- Go to the loan section and click on personal loan for education
- Read all the terms and conditions and click on ‘Apply Now’
- Fill in all the details and upload the documents
- Click on submit
- Save the acknowledgement for future reference
- Wait for the bank’s verification
Important Guidelines on Personal Loan
While taking any type of loan, the primary things that are considered by the borrower are interest rates, repayment period, collateral requirements etc. This loan comes with a lot of benefits. However, there are certain terms and conditions that you must understand and consider before applying for a loan. Check the important guidelines below:
- Always compare the interest rates on personal loans for education offered by different banks and financial institutions. Find the offer that is best suited to your requirements.
- The maximum amount in an education loan with collateral is much higher as compared to a personal loan. So, if you require a bigger amount say INR 70-80 lakhs or more, then choose education loan schemes.
- The processing fees for personal loans are usually high. Look for a borrower who charges less processing fee on personal loans.
- If you are taking a personal loan for education, you need to show some sort of monthly income of a specific amount. However, this does not apply to a direct education loan which makes it easy especially for students.
FAQs
A personal loan for education is an unsecured loan offered by many banks and NBFCs to students who want to pursue higher education.
The major difference between personal and education loans is that education loans are secured loans whereas personal loans are unsecured loans. If you need a high loan amount at a low rate of interest then you can consider taking an education loan.
No. You don’t need any kind of collateral to take a personal loan for education.
The interest rate on personal loans varies depending on the bank or the financial institution. As per the currency rates, you can get a personal loan at an interest rate starting from 11% per annum.
You can get a personal loan for education even if you do not have a job. However, you need to show a monthly income of the amount prescribed by your lender.
Personal loans for education are a good option especially when you want to take collateral-free loans. Always check the terms and conditions of the loan before applying for the same.
To know more about the personal loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
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