5 Vital Things you Should know Before Applying for a Higher Education Loan

There are many students who have the zeal and qualifications to shine in life but don’t have the necessary funding. As educational expenses continue to rise, these students can pursue their education easily with reliable financial aids like personal loans.

These personal loans allow you to utilise the funds flexibly for various purposes. These can be funding tuition fees, booking transport, arranging accommodation and other such expenditures. If you too are considering an advance to cover the expenses of your studies, a Higher Education Loan might prove to be a better choice.

Many financial companies offer hassle-free personal loans with attractive features. You can apply for them online and skip a lengthy documentation process. However, you must be aware of 2 important facts.

●       Some financial organisations may not grant you a higher education loan unless you get admission to an institute. The financial organisation should also acknowledge that institute. However, there are others who offer higher education loans before you are admitted. So, make sure to check this factor with your chosen lender. 

●       As these loans are unsecured, you need not worry pledging any collateral or losing the asset in case of default.   

Apart from these, there are five other things to be aware of before applying for a higher education loan.

1.      The rate of interest – Make sure you know which lender is offering the best interest rates on a personal loan for higher education. Companies like Bajaj Finserv provide attractive interest rates on different financial products.

2.      The personal loan eligibility criterions – You will need an adequate CIBIL score before applying for a personal loan. Financial institutions prefer customers having a credit score above 750.

             As a student, you probably have not applied for a loan before and have a zero credit score. In such case, your parent or guardian can apply for a regular or a Flexi Personal Loan for higher education.

3.      The necessary documents – You will need to submit some essential documents when you apply for a higher education loan. These include –

●       Know Your Customer (KYC) documents (Aadhaar, Driving License, Voter ID, PAN, photo ID issued by a government authority, etc.).

●       Proof of residence.

●       Salary slips for the previous 2 months.

●       Bank account statements for the last 3 months.

●       Income tax files for at least the previous year.

4.      The amount you need to borrow – Calculate the exact amount you will need for financing the higher education. Determining it will help you plan your EMIs accurately. You can use a Loan Calculator to aid you with the process.

            Repaying the loan quicker will boost your CIBIL score and make you more creditworthy to future lenders.

5.      The repayment plan – Pre-planning your loan repayment strategy is essential. These loans come with tenures starting from 24 months and going up to 60 months. You need to repay your higher education loan once you start earning. Try to save a part of your salary and repay the loan as soon as possible.

Clearing the dues will give your CIBIL score a significant boost. Your CIBIL score will increase and make you more eligible for a future advance if you do not miss on any EMIs and repay the loan in time.

If you are wondering how to apply for the personal loan, well, the process is accessible online. You need to choose whether you are salaried or self-employed and then fill up the online form to complete the process. Hence, select a preferred lender and apply for the higher education loan today.