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Personal Loan for Students in India

Instant Student Loan

Last Updated 28th Nov 2021

  • A personal loan for a student or a student loan is a loan borrowed by the working parents for the education of their child.
  • A personal student loan is different from a traditional education loan.
  • This loan for students can be used to fund expenses occurring in primary, secondary of higher education.
  • Instant loan for students can be availed both offline and online.
  • Personal loans for students covers both large and small expenses ranging from academic fees to the purchase of books and academic equipment.
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What is Personal Loan for Student or Student Loan?

Personal loan for students or a student loan is a loan borrowed for educational purposes of a student. However, in general, it is not the student who borrows this loan; indeed, it is the parent of the student who borrows this loan on behalf of a student. This loan can be used to pay a high admission fee or for other educational expenses for either primary, secondary or higher education. Apart from the fact that it is the parents who borrow the personal loan for students, if a student borrows this loan on his or her own, then it can be categorized as a traditional education loan.

Features and Benefits of a Personal Loan for Students

The features and benefits of a personal loan for students are listed as follows:

  • Quick approval : The loan is granted in a short period of time, as there is not much documentation required. Thus loan processing is a short term process in this case and this loan is also called as the instant loan for students.
  • Covers multiple academic expenses : The loan can be taken for higher studies, or for funding the academic requirement throughout the academic years of a child, depending on the borrower’s need.
  • Available for working parents : The loan can be borrowed by working parents that are either salaried or self-employed.
  • Loan tenure : In general, the loan amount can be borrowed for a maximum tenure of 60 months.
  • Loan amount : The maximum loan amount as per the personal loan for a student may range between ₹ 25 Lakh and ₹ 30 Lakh, respectively based on the occupation whether salaried or self-employed. The minimum limit may, however, depend upon the lender, as the student loan can be availed to meet small academic expenses as well in the form of small loans for students.

Eligibility Criteria for Student Personal Loan

The eligibility criteria for student personal loan is mentioned as follows:

  • The loan can be borrowed by all Indian salaried residents
  • The parent’s age who is borrowing the loan must not exceed 65 years of age at the time of loan maturity.
  • Salaried applicants are expected to earn a minimum income of ₹ 25,000 if they belong to Delhi or Mumbai and ₹ 20,000 for other cities in the country.
  • The applicant is further required to be employed in a public sector or private limited company with a current work experience of 6 months and above.

Documents Required For Personal Loan for Studies

The list of documents required for a personal loan for students in India are listed as follows:

  • Passport size photographs
  • Identity proofs such as aadhar card, Voter ID card, or PAN card
  • Address proofs such as Aadhar card, driving license, or passport
  • Last six months of banking statements
  • For salaried: Income proofs such as salary slips, Form 16, or ITR returns
  • For self-employed: Prof or business registration, ITR returns or financial documents of the enterprise such as P&L statement

Student Loan for Studying Abroad

The benefits of personal loan for students is not limited to the students studying in India, but also for those who wish to study abroad. However, to avail these benefits, it must be ensured that the parents borrowing the loan for their child must be Indian residents. These loans are beneficial for students studying abroad, as higher studies are more expensive overseas in comparison to India. Also, for such loans, Insurance is a must, wherein the sum assured depends upon the course and country where it is pursued.

Student Loan for Studying in India

Personal loans for students studying in India is a go-thing for covering the high education expenses in the times of growing privatization across the education sector. However, in case one tends to borrow this loan for getting the student admitted to premier Indian institutes such as IITs, IIMs, NITs, or Central Universities, then the student loans can be availed at competitively affordable interest rates.

Personal Loan For Students Vs Education Loan

The difference between personal loan for students and education loan is listed in the table below:

Personal Loan for Students Education Loan
The personal loan for students is taken by the working parent or parents for the academic purpose related to the education of their child. As per the education loan, it is the student himself who borrows the loan on his or her behalf.
Personal loans for students can be taken for an end use related to academics, wherein one can fund primary, secondary or higher education. Education loans are taken to fund higher education.
To borrow a personal loan for students, what matters most is the financial ability of the working parents. In order to borrow the education loan, the student is required to maintain a good academic history.

FAQs

Who is eligible for Personal Loan for Students?

A personal loan for students can be borrowed by both salaried and self-employed working parents of a student. However, one must ensure that the minimum age of the borrower, that is the working parents must not be more than 65 years at the time of loan maturity.

Is there an age criterion for Student loans?

Yes, the age criteria for a student loan is that the age of the parent borrowers must not be more than 65 years at the time of loan maturity. The minimum age of the parent should, however, be 21 years of age.

What expenses are covered under the student loan?

The student loan covers a number of related academic expenses such as academic fee, tuition fee, higher education fee, and even small-term expenses such as the purchase of teaching ids, books, or other requirements. Thus these loans are ideal personal loans for students with no income.

What is the loan tenure for an instant student loan?

The loan tenure for an instant student loan ranges between 1 to 5 years. This, however, may vary across the loan lender.

Which one is a better Personal loan or Education Loan?

A personal loan for student and education loan are two different loans, but both function to fulfil the shortage of funds related to academics. While a student personal loan is ideal to fund any kind of academic expense, whether short term or long term, an education loan can be borrowed to only fulfil the expenses related to higher education. Thus, one should decide the best option as per one’s needs.

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