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 30 lakhs*
• Flexible loan tenure ranging between 12 to 60 months
• Attractive interest rates starting from 13%
• 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?

These steps will guide your personal loan application journey at SMFG India Credit:

1. Start the application process here.
2. Enter your personal details, including your mobile number, PAN, pincode, and employment type (salaried or self-employed).
3. Authenticate your mobile number with a 6-digit OTP. Please note that verifying your email ID is also required.
4. Submit more details such as your email address, date of birth, gender, income, and history of employment.
5. Examine the loan offer which will the desired amount, associated fees, and repayment terms. Confirm your acceptance once satisfied and consider the option where you can go for a higher loan amount.
6. Detail your employment information if you are a salaried applicant.
7. Conduct the necessary digital verifications for your identity and address. Please use well-known processes like CKYC, OKYC, or DigiLocker.
8. Provide your bank account details for verification. After successful verification, you will be asked to fill in the 'Additional Details' section with information about your references, marital status, loan purpose, father's name, and mother's maiden name.
9. Choose between a debit card and internet banking as your payment mode and set up eNACH.
10. Digitally sign the loan contract after a careful review. Complete the process with an OTP confirmation.

Secure a personal loan by completing these steps and move closer to realising your financial ambitions.

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.