Personal Loan for Higher Education: Everything You Need to Know

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Financial crunches often subdue the aspirations for quality education. As the cost of tuition increases rapidly every year, students often experience a shortage of funds to achieve their goals. Educational loans provided by many prominent lenders converges these factors of needs and goals with the required financial assistance.

Below is a comprehensive guide on educational loans intended to assist every aspiring student.

What Are Personal Loan for Higher Education?

Personal Loan for Higher Education are instant loans for students on a fixed repayment timeline.

Applicants to courses with the capability of employment or business ventures are generally granted these loans.

However, applicants should note that the maximum loan amount varies for study abroad and domestic loans.

Type of courses aided by education loans

Any full time, part-time, vocational, graduation or post-graduation of the sectors of engineering, medical, hotel management courses, etc

Eligibility criteria

  1. Nationality: The applicant must be a citizen of India
  2. Age criteria: 18-year old (minimum age) applicant or parents of the student can avail the loan. The loan is not sanctioned if the applicant is older than 35 years.
  3. Course admission: The applicant should have college or university admission, which is affiliated with the appropriate authority (UGC, AICTE, etc.).
  4. Qualifying exam percentage: The applicant should have scored at least 60% in the previous qualifying exams.

Documentation required

The below-listed documents are applicable for higher education in India.

Parameter Documents
Proof of identity & Age of the applicant –          Voter ID card

–          Aadhar card

–          Any government-issued cards

 

Proof of Address –          Voter ID

–          Utility bills

–          Aadhar card

Proof of Income –          The income tax returns of the guarantor or parent for the past six months

–          Financial statements for the past six months

Educational proof  Marksheets from 10th standard to last completed academic course.

Other documents required:

Study Abroad –          Completed Loan application

–          Passport, visa copy and details

–          Passport size photo of the applicant

Higher education in India –          Completed loan application

–          Passport size photo

Interest rates

The interest rates for loans are determined by the Marginal Cost of Lending Rate and an additional spread. The current loan interest rates range from 8% to 14% * which varies from financial platform in India.

Application process: A Glance

Although the nthingstoknow process is variable from lender to lender, listed below are the fundamental steps involved

  1. Submission of the completed loan application and supporting documents.
  2. Applicants are invited for a discussion with the employee where the academic goals, course, the institution will be discussed.
  3. Submission of any further document required, admission letter for example
  4. Approval or rejection of the loan application: After thorough scrutiny of the application and documents submitted, the lender sanctions or denies the loan.
  5. Loan disbursal: Final stage of the loan process, where the lender directly pays the applicant’s college or university fee.

Final thoughts

Education loans are personal loans for students, tailor-made to synchronize with their aspirations. It not only mitigates the financial needs but also helps create a good credit score for the applicant if loans are repaid on time.

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