A higher education course, be it a bachelor’s degree, a master’s degree, or a postgraduate degree, can be a doorway to better job opportunities. These courses from reputed universities do cost a substantial amount and the expenses only increase if you decide to study overseas. However, finances are no longer a restraint as you can avail credit, either by way of a personal loan for education or a student loan, to enjoy admission to top colleges. To make the ideal choice between these two types of loans, read about their differences below.
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Collateral And Maximum Funding
A personal loan is unsecured in nature, meaning that you do not need to pledge an asset to avail funding. For a student loan, most banks may ask you to pledge a collateral if your loan amount exceeds Rs.7.5 lakh. Additionally, you will need to provide a guarantee for a loan exceeding Rs.4 lakh. While a personal loan is at your disposal without any restriction on the use, an educational loan doesn’t give you 100% funding if your loan amount exceeds Rs.4 lakh. This means if you are taking a loan of more than Rs.4 lakh to study in India, you will need to finance 5% of the amount you need and the loan will cover 95%. Alternatively, if you are taking a loan to study overseas you will need to pay the 15% of the cost with the loan covering 85%. Thus, a student loan can have limitations as compared to a personal loan.
Repayment And Flexibility
While you need to start paying personal loan EMIs from the time you avail it, certain lenders offer features that help you manage your cash flow better. Reputed NBFC Bajaj Finserv, for instance, offers repayment tenors from 12 to 60 months. So, you can choose a tenor as per your convenience. In addition to this, it offers you a chance to lower your EMIs by 45%. This can be done by availing the flexi facility that provides you with a choice to pay interest-only EMIs and repay the principal at the end of the tenor.
A student loan’s tenor starts after the educational course is complete. This means your first few paychecks are assigned towards paying off your student loan. While an education loan may offer you a moratorium period, it can come with the price of the interest rate adding up during the gap, which can make it a substantial amount to repay.
Ease of Application and Eligibility Criteria
Personal loans are offered by multiple banks and NBFCs and you can get a loan on the simplest personal loan eligibility criteria. Some lenders even offer personal loans despite a low credit score. In order to apply for a student loan, you need to have completed your higher secondary education. Some lenders also require you to have proof of being accepted into a university or college that is recognized by a trusted Indian or international authority. Further, some lenders have an age limit as part of their eligibility criteria too. So, it may be easier for you to qualify for a personal loan as compared to a student loan.
The Best of Both Worlds
By borrowing from the right lender, you can avail both a student loan and a personal loan combined to give you the ideal credit offering for your higher education. Bajaj Finserv offers Personal Loans For Higher Education that provides funding up to Rs.25 lac at nominal interest rates. Further, you can enjoy online application and online account management on this personal loan. Instant approval is a benefit too and you can get a disbursal of funds within 24 hours of approval to meet your college deadlines in time! You can also opt for the flexi loan facility to borrow as you need and pay interest only on the amount of the sanction that you utilize.
If you are wondering, ‘Is it good to get a personal loan to pay off student loans?’ read on to know more. In case you have already availed of a student loan, there is no need to worry about missing out on the benefits of a personal loan. A personal loan can help in repaying your student debt by using your sanction to pay off your student loan amount with ease. You can then repay the personal loan by choosing your tenor as per your finances. Before you get started with your personal loan application, check your pre-approved offer to view customized loan deals and apply instantly online.