The cost of quality education is consistently rising, and so is the popularity of personal loan for education.
But isn’t there already a loan that caters exclusively to that segment?
Yes, an education loan is a dedicated loan which provides money to students aspiring to become professionals. But increasingly, the trend is shifting. People nowadays are depending on personal loans for education more than any other loan. Read this article to find out how a personal loan for education can help you in funding higher education, both in the country and abroad.
What Drives the Popularity of Personal Loan for Education?
Unlike an education loan, which covers only the expenses directly related to education, the personal loan for education
covers all costs that are related to higher education, either directly or indirectly. Hence, a personal loan provides you with unmatched flexibility to use the loan amount on anything you feel is important to you.
Other than flexibility, the personal loan for education is loved by many for its low rate of interest, easy eligibility criteria, long repayment tenor, minimal documentation, instant loan approval, and the facility to pay EMIs online.
A personal loan eligibility calculator can give you the proper estimate of what you need to avail a personal loan.
How Can a Personal Loan for Education Help You?
- A Personal Loan Covers All Expenses
Generally, education cost is divided into five segments – tuition fees, living cost, insurance cost, travel expenses, and miscellaneous cost.
The tuition fee is one of the major expenses that a personal loan for education fully provides. The tuition fee usually includes charges like admission fees, infrastructure fees, development fees, laboratory fees, and other expenses. Before you apply for the loan, ensure that the loan amount sufficiently covers the tuition fees.
The second major cost that is a matter of concern for those willing to stay within or close to the campus is the living cost. Living cost includes the cost of accommodation, food, transport to and from the campus, and caution deposit. The lender usually factors in these expenses before approving the personal loan for education.
Other than the expenses mentioned above, a personal loan for education also provides you with funds for health insurance, train or flight fare from your home to the educational institution, and also covers other expenses.
If you apply for an education loan, you may get up to ten years for repaying the loan. In contrast, a personal loan for education comes with a maximum cap of five years for repayment. Apparently, you may feel that the financial burden will be more on you if you avail a personal loan.
But, on closer analysis, you would discover that a reduction in the loan term also means higher savings and faster payoff. When you drag on the loan for ten years, the lender charges more as interest cost. Additionally, there is the pressure of outstanding dues. By closing off your loan early, you can save interest cost and improve your credit profile.
- Consolidate Existing Debt
Sometimes, a student may require urgent cash for several reasons. Hence, they may apply for several credit cards or loans. While accumulating debt is manageable, paying the debt can strain one’s finances. This is where a personal loan for education can come to your rescue.
You may use the funds to settle off all your debt and become legally debt-free. You also get the benefit of paying the EMIs for one loan instead of many different loans.
The personal loan for education comes with many benefits. Use the personal loan eligibility calculator to get a better idea about your eligibility and use it to negotiate with your lender. Lenders usually like to approve the personal loan for education to borrowers with a high credit score. Hence, before applying for the personal loan, you should take steps to improve the score.