Can a Student Get a Personal Loan in India ?

In recent times, the cost of education in all stages of academic career has increased several times in comparison to the average per capita income in India. For instance, a pre-school admission in a reputed school itself can go up to Rs. 1 lakh and there are many other expenses involved in providing quality education. And, these expenses will continue to rise every passing year.

Although such expenses are planned before-hand and accordingly allocated from the monthly household budget, chances of deficit in funds remain. Thus, at such times, one may feel motivated to look for a personal loan for students. However, since students don’t have an income, they will not be eligible for a personal loan. On the other hand, it is very easy to get instant personal loans that are issued in the name of a working parent, instead of a student's name.

Compared to education loans, which can only be obtained for completion of higher studies and have stringent terms and conditions, personal loans can be obtained by a parent during any stage of their children’s academic career, whether in the primary, secondary or higher education stage. The loan can be obtained in a short time with minimal documentation and eligibility criteria.

Features of Personal Loans

The following are the key features of personal loans:

• You can get a maximum loan amount of upto INR 25 lakhs*
• Flexible loan tenure ranging between 12 to 60 months
• Attractive interest rates starting from 11.99%
• Instant approval with same day loan amount transfer to the bank account

Personal Loan Eligibility Criteria

• The eligibility age is 21 years to 60 years
• Salaried must be employed in a private or public limited company
• Self-employed should have a minimum turnover as per the lender’s policy
• The minimum income eligibility for salaried is Rs 25,000 per month in Delhi/Mumbai and Rs 20,000 in ROI
• Minimum 1-year work experience
• CIBIL credit score of above 750

You can also check the maximum loan amount you may be eligible for using the personal loan eligibility calculator, which shows the maximum amount you can borrow based on income, expenses, place of residence and age. Please note that actual eligibility will also take into account other parameters like credit history, repayment history, and so on.

Must Read: 5 Steps to Get a Personal Loan for Online Courses in India

Documents Required for Personal Loan

The following sets of documents required for instant personal loan:

• Recent colour passport size colour photographs
• KYC documents including PAN Card, AADHAR and Voter-ID
• Last 3 months salary statement and income proof for self-employed
• Form 16 (for salaried) and income tax returns
• Last 6 months bank statement of salary account and current account for self-employed
• Registration certificate of business in case of self-employed
• Audited financials for self employed

How to Apply for an Instant Personal Loan?

Individuals can apply for a personal loan either through online mode or by visiting the nearest SMFG India Credit branch office.

Through Web:

• Click on “Apply Now” and then go to the Personal Loan section on the website
• Select “Salaried” or “Self-Employed” and enter your mobile number 
• Verify your mobile number by entering the OTP sent to the number provided
• Now, enter the loan amount required and repayment tenure 
• Simultaneously, provide information such as age, employment status and banking details
• Upload required documents
• Click on “Submit” 

A reference number will be generated against your application for tracking your application status and future reference. You can also use SMFG India Credit InstaLoan App to avail a personal loan.

Personal Loan EMI Calculator

While applying for a personal loan for meeting the costs related to the education of your child, you can use the personal loan EMI calculator to check the approx estimate of your monthly EMIs and can plan the repayment tenure.

Things to Remember While Applying for Personal Loan

Correctly Estimate the Requirement

Quality education is expensive. Besides the current requirement, also factor in requirements like travel expenses, increase in tuition fee, cost of study materials & scientific instruments etc. It helps you plan for your child’s education in a better way.

Select the Right Repayment Tenure

While you have the flexibility to decide the personal loan repayment tenure, never keep you the tenure too short or too long. Having a short tenure will result in a high debt to income ratio, which means a major part of your income goes towards servicing the loan; it will result in your financial weakness and instability. And, opting for a long tenure than required results in higher interest outgo and increase the total cost of the loan.

Must Read: How to Finance Abroad Education with a Personal Loan?

Check the Interest Rate and Details

Always check the interest rates, processing fee, prepayment penalty and other costs while applying for a personal loan. If you have a good credit score and sound finances, you can negotiate the rate of interest with the lender.

Through the personal loan, you can ensure your child gets a good education and grows personally, socially and economically.