Education loans are the most popular option when it comes to financing higher education. However, the margin of self-funding under education loans has been a primary drawback for these loan products. Lenders require borrowers to fund 5% of the education cost for domestic studies and 15% for overseas if the loan amount is above Rs.4 lakh.
A personal loan can be a better alternative as they don’t come with any such margin and are open to unrestricted end-use. These loans are also non-collateralised such as education loans and don’t require the borrower to mortgage an asset.
Borrowers must comply with the following to get a student loan online without security –
A personal loan borrower must hold a CIBIL score of 750 or above to be eligible. A good credit score is a must as these loans are unsecured.
Those planning to take a student loan without collateral can improve their CIBIL score by availing of small credits (like a credit card) and managing it responsibly.
Individuals with a low CIBIL score can apply with a co-signer who satisfies all the eligibility criteria for improved chances of approval.
Applicants must earn a minimum net monthly income based on the city they reside in to be eligible for a personal loan for domestic or international studies. For instance, residents of Cochin, Jaipur, Surat, Chandigarh, and Nagpur must have a monthly income of not less than Rs.28,000. Similarly, residents of Kolkata and Ahmedabad must have a minimum monthly income of Rs.30,000.
Documents required for personal loan for students include employee ID card, salary slips (of 2 months), and bank account statements (of 3 months) for salaried individuals.
OVDs for KYC such as Aadhaar, PAN, voter ID, driving license, or passport are mandatory documents that all applicants have to submit.
Pre-approved or existing customers may not have to provide any of the documents mentioned above.
Some lenders also require borrowers to maintain a debt-to-income ratio of 50% or lower.
Complying with these conditions improves quick approval chances of an instant loan for college students.
Step 1. Enter personal, employment, and financial details in the online application form.
Step 2. Provide the loan amount and tenure of loan repayment.
Step 3. Submit the documents to the visiting representative to complete verification.
Following approval, the student loan amount is disbursed to the borrower’s account within 24 hours.
Borrowers must estimate the cumulative expenses of the entire course duration before applying to avail of a sufficient loan amount. It includes not only tuition fees but also food, living expenses, among others.
The loan tenure impacts EMIs. Individuals must, therefore, pick a tenure that keeps the monthly instalments affordable. Utilise a personal loan EMI calculator for the suitable selection.
Also, check the processing fees & rate of interest on personal loan for abroad studies before applying.
Bajaj Finserv offers personal loans for Higher Education within 24 hours* of approval. Applicants can get up to Rs.25 lakh student loan with tenures extending up to 60 months.