How to Get Personal Loan For Students
7th March 2025
3:12
On this Page:What is a Personal Loan for Students?
A personal loan for students provides a lump sum to meet financial obligations beyond educational expenses, based on their monthly income. To qualify, applicants must meet specific criteria set by lenders.
Age: The student must be at least 21 years old.Minimum income: The student must have a minimum income of ₹15,000 or above. (It may vary depending on the lender you choose)CIBIL score: A minimum CIBIL score of 650 or above makes you eligible to apply for a student personal loan.Note: The lender may ask for additional documents based on your profile.
Advantages and disadvantages of student personal loan
There are a few benefits of using a student personal loan:
Easy to Apply: A cosigner won’t be needed in a personal loan application if the student is earning a regular source of income.All-purpose loan: You can use the personal loan for any purpose. Unlike an education loan which has the sole purpose of covering your education expenses, a personal loan can be used for both educational and personal purposes.No collateral: A student personal loan doesn’t require any assets. You just need to provide your income proof and repayment history to be eligible for the amount.Higher rate of interest: Personal loans are unsecured, so they come with a higher interest rate than secured loans. To ensure you don’t end up with a high personal loan interest rate, you can add your parents as a co-borrower to your loan. This will enhance your repayment capacity.Fixed repayment period: You have to start repaying the borrowed amount from the next month of the loan disbursement. And this will continue till the loan is paid in full. You have the option to close the loan early, but for that, you need to pay the loan outstanding balance in a lump sum.Not for Unemployed: Student personal loan is not provided on the basis of your academic qualification. You need to have a regular source of income to get the loan approved.Tips and recommendations for students considering personal loans
Considering a personal loan for financial assistance warrants careful consideration:
Loan Offers: Compare all the loan offers available. This way, you can choose the best personal loan. Because grabbing the first offer you get might make you miss out on the low interest rate and more. So it is always advisable to compare the loans before you choose.Current obligations: When you already have some financial obligations, such as EMI or credit card bills to pay, you should avoid taking a new loan. Because of the current obligation to avail of a loan, you need to have a high income, and the same is not available to you as a student.Access to scholarships or grants: Scholarships vary in the expenses they cover. Some only pay a portion of the cost of attendance, while others provide a "full ride," which includes lodging, meals, and additional expenses. If you receive a full-ride scholarship, you can avoid taking out a personal student loan, as the scholarship covers all your needs.In conclusion
While personal loans can be a helpful option for students needing extra financial support, it's essential to weigh the pros and cons carefully. With the ability to use the funds for various expenses and the potential to build your credit history, personal loans can be beneficial. However, the higher interest rates and the immediate repayment obligations require thoughtful planning and consideration. Always make sure to explore all available financial resources, such as scholarships and grants, before committing to a loan. By doing so, you can better manage your finances during your college journey and set yourself up for long-term financial success.
