Personal loan for students has presented a credit avenue to bridge the financial gap created by the traditional educational loans. Traditional loans only allow students to pay for their tuition fees. However, students have other expenses to meet, such as food expenses, travelling expenditures, especially if they’re studying away from home. An education loan does not cover them.
In such a situation, a personal loan can be a great support. It helps individuals meet their expenditures outside of their school or college tuition fee without any worry.
Top 5 benefits of a personal loan for students
Here are the benefits of a personal loan for students that make it a popular financial product –
Flexibility of usage
One of the top benefits of this financial product is its restriction-free usage. Owing to this feature, it helps students meet an array of personal and educational expenses. Whereas, with a standard education loan, one does not have this benefit.
2. Requires no collateral
Since it is an unsecured mode of credit, one can avail this loan without submitting any collateral. Hence, getting access to the required funds becomes more convenient.
3. Repayment options
Another notable advantage of this financing method is its repayment flexibility. Here, borrowers have the option to select a tenor based on their capacity. They can also select an EMI they are comfortable in paying. Moreover, leading financial institutions allow borrowers to part-prepay and foreclose their loans, according to their convenience.
Applicants can take the assistance of a personal loan calculator to plan their repayments.
4. Provide income tax benefits
With a personal loan for students, individuals can enjoy income tax benefits. According to the Income Tax Act of 1961, if an individual uses this financing option to meet educational expenses, they can file for income tax exemption on repayments. Debtors should know all about how a personal loan can provide tax benefits to help them make a knowledgeable decision.
5. Quick disbursal
Being an unsecured mode of credit, this loan option does not require any lengthy verification process. One can gain access to funds within 24-72 hours, depending on the lender. For instance, leading financial institutions like Bajaj Finserv provide personal loans within 24 hours* owing to their quick processing facility.
Along with being aware of the advantages of this debt instrument, one should also be familiar with its eligibility criteria to make an informed decision.
Personal loan eligibility criteria
These criteria can vary across financial institutions. However, a few standard ones followed by every reputed financial institution are –
- Age: 23-55 years
- Credit score: 750 and above
- Employment type: A salaried employee associated with any MNC, a private or public limited company operating in India
- Monthly income: Depends on the applicant’s city of residence
Since these eligibility parameters alter with the choice of lender, one needs to meet any additional criteria that a particular lender has set. In this regard, one needs to go through lender-specific loan terms to learn this in more detail.
However, a personal loan application does not end here. Individuals need to submit a set of documents to complete this process successfully. Here are the details –
- KYC documents
- Company ID card
- Salary slip of the previous 2 months
- Account statements of the last 3 months
Keeping these documents handy can quicken the approval process. However, note that this list is an indicative one. Financial institutions might ask for additional documents.
Alongside eligibility parameters and documentation, one should know how to apply for quick loans for students as well.
A step-by-step guide to applying for a personal loan
Step 1: Visit your preferred lender’s official website and locate the financing option
Step 2: Fill up the personal loan application form with relevant and valid data
Step 3: You will receive approval within some time, depending on your eligibility criteria
Step 4: Following this approval, individuals need to upload their documents
Step 5: Post verification, applicants will receive their loan amount.
Leading financial institutions also extend pre-approved offers to help existing customers skip the hassle of application and get funds quickly. Available on different financial products such as personal loans and business loans, you can check pre-approved offers by submitting your contact number.
Personal loan for students offers an alternative financing avenue for individuals. Moreover, its benefits further substantiate the demand for this debt instrument among students and others.