Is It a Good Approach to Apply for a Personal Loan for Education?

Education is a crucial component of an individual’s life that frequently incurs substantial expenses. Regardless of whether one intends to pursue advanced academic degrees or vocational training, the associated costs may impose a significant financial burden.

While numerous financing options are available to fund your education, seeking a personal loan is a viable alternative. However, it begs the question: Is applying for a personal loan for education the right approach?

This blog aims to assess the advantages and disadvantages of obtaining a personal loan for educational purposes to help you make an informed decision.

 

Advantages Of Taking a Personal Loan for Education

Here are some reasons you should apply for a personal loan for education.

Minimal Documentation: Lenders typically aim to simplify the personal loan application process by requesting only essential documents, such as proof of identity, income, employment, and address. New age lenders like IndusInd Bank offer complete digital process with no physical documentation required.

No Need for Collateral: No collateral is required when applying for a personal loan. In other words, if you can’t repay the loan on time, you won’t have to worry about losing your possessions or property.

High-value Loan: A personal loan can give you up to Rs. 5 lakhs to pay for quality education in India and meet additional expenses beyond tuition fees. Since you can get a big amount, you can choose the exact amount you need and not have to apply for many smaller loans to cover all expenses.

Flexible Tenures: You can pick the loan term that best suits your needs when you apply for a loan. This allows you to decide whether to pay lower monthly instalments or less interest overall, based on your financial situation.

Quick Disbursal: You can easily complete and submit the application form through online loan application process. Upon approval, the funds will be transferred to your authorised bank account within a few hours for quick access.

Use for Any Purpose: If you take out an education loan, the money will go straight to your college’s bank account and can only be spent on college-related expenses. But if you choose to get a personal loan, the money will go to your bank account, and you can use it for living expenses, rent, and other costs.

Disadvantages Of Taking a Personal Loan for Education

Below are some of the disadvantages of obtaining a personal loan for educational purposes:

Higher Interest Rates: Interest rates on personal loans are usually higher than education loan rates. This implies that your overall loan repayment will end up being higher.

No Grace Period: Unlike education loans that typically provide a grace period, personal loans generally do not offer this option, requiring borrowers to begin repayment immediately after receiving the funds.

Steps For Obtaining the Right Personal Loan for Education

1. Choose a reliable bank based on loan terms, repayment terms, and fund usage restrictions.
2. Estimate the cost of education, including tuition, accommodation, travel expenses, food, and books. This will help you determine the loan amount.
3. Check the eligibility requirements and terms for personal loans at the chosen bank.
4. Decide on the loan term that suits you best, considering the impact on monthly payments.
5. Apply for the loan online
6. Upon approval, the loan amount is transferred within a few hours.

Conclusion

Personal loans can be a good way for some people to pay for their education, but they might not be the best choice for everyone.

Therefore, you must carefully assess your financial situation and future goals before deciding. Moreover, responsible borrowing is crucial, which means taking only the required amount and repaying it promptly to prevent any unwarranted debt.

–Need instant funds to fuel your education.

Apply for a Personal Loan today.