The cost of education has been steadily rising over the past many years. At times, you might face a situation where your current savings are insufficient to meet higher education costs. If you’re a parent and want to ensure an education for your child, then opting for a Personal Loan may be a good option. In this guide, you will learn eight reasons why you should opt for a Personal Loan for your child’s education. Read on!
Here are eight reasons why you should consider a Personal Loan to meet educational expenses.
You don’t need a very high credit score to qualify for a Personal Loan. A credit score is accorded to each individual by CIBIL according to their creditworthiness. The higher your credit score, the easier it will be for you to receive a loan. Lenders always check your credit score before approving a loan. The credit score for a Personal Loan just needs to be above 750.
You can use a Personal Loan to meet any type of expenditure including living expenses, accommodation costs, and so on. In contrast, an education loan can only be used to meet your school or college fees. This is the main benefit of a Personal Loan compared to an education loan, even though there are education loan tax benefits.
Personal Loans do not require the borrower to provide collateral such as property or jewellery. Since these loans are completely unsecured, the borrower does not need to worry about losing their belongings or property in case they fail to repay the loan on time. This type of loan provides relief to individuals who do not want to risk their assets if they do not have the ability to pay the loan.
The loan amount of a Personal Loan can be as high as Rs. 30 Lakh (might vary from lender to lender). It’s clear that such a loan amount will be enough to pay for a good education within India. You may have enough funds to meet other expenses apart from your college or school fees. This high loan amount without providing any collateral makes Personal Loan a highly attractive option for students.
Depending on the lender, a Personal Loan can be repaid in nearly 60 months (or 5 years). You can choose the tenure of the loan while making your loan application. This flexible loan tenure means you can prioritise lower interest payments or monthly payments, depending on your needs. A longer tenure will mean that the overall interest that you need to pay will be higher. In contrast, a shorter tenure will mean that the monthly payments will be higher.
College and school admissions do not wait for anyone. You need to deposit the relevant fees for the year within a short period of getting accepted. This is where the quick disbursal of a Personal Loan can help. The entire loan application process can be completed online. After submitting the application form, the officials will verify your details and you will receive the funds within 24 hours.
A Personal Loan for education can be availed not just to fulfil institutional expenses like tuition fees and study material but to cover other costs as well, especially if you are studying abroad. As a multipurpose loan, a Personal Loan for education can cover expenses like:
Lenders understand that the loan application process must be as hassle-free for the borrower as possible. This is why they only ask for the necessary documents so that it is easier for the borrower to arrange the required documents. Since a Personal Loan is an unsecured credit, the documentation required is straightforward.
Usually, only the following documents will be required:
Here are the features and benefits of a Personal Loan for education:
The following table provides the difference between a Personal Loan and an education loan:
Can be used for various financial needs.
Covers academic costs such as tuition fees, accommodation, and study materials like books, laptops, etc.
Since these loans are usually unsecured, they have a higher interest rate.
Since these loans come in both secured and unsecured forms, they have lower interest rates.
No tax benefits are available.
Individuals can avail tax benefits.
There are penalty charges
No penalty charges
Shorter loan tenure
Longer loan tenure
Follow the steps mentioned below to apply for a Personal Loan for educational purposes:
Upon successful verification, the required loan amount will be deposited into your account.
Before applying for a Personal Loan for educational purposes, you must keep in mind the following points:
A Personal Loan for education can be the best option when you consider how to fund your child’s education. You can apply for such loans through Poonawalla Fincorp, whose loans are tailor-made to be hassle-free and convenient. Since this type of loan is collateral-free, the borrower is stress-free. Even though you don’t receive the education loan tax benefit, there are several other benefits of taking a Personal Loan when compared to an education loan.
You need to submit the following documents to opt for a Personal Loan for higher education:
1. KYC documents
2. Address proof
3. Income proof
4. Employment proof
5. Financial documents
You can avail of Rs. 30 Lakh as a Personal Loan amount through Poonawalla Fincorp for your higher education.
You must be an Indian citizen between 24 to 57 years old to avail a Personal Loan for education from Poonawalla Fincorp.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply
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