According to a report presented by ICEF, India is the world’s second-largest source when it comes to sending students abroad. As per the data revealed by the Indian Ministry of External Affairs, the total number of students studying abroad stood at 7.53 lakh as of July 2018.
Today, every parent realises the essence of quality education and wants their child to get quality education from renowned institutions be it in India or abroad. However, the cost of education in such esteemed colleges is substantial and may cause financial strain on the parents. An alternate option to arrange the necessary funds is to opt for a higher education loan.
With an unsecured loan, individuals will be able to finance their child’s higher education easily. However, it can be tricky to choose the right lender because of the numerous loan opportunities available online.
Therefore, look at the tips mentioned below to choose the best personal loan for higher education scheme.
Tips to choose personal loan online for education
- Loan amount
Parents can apply for a Higher education loan and utilise the amount to fund their child’s educational needs. Since these are unsecured loans, one can easily avail the loan without having to hypothecate assets. Financial institutions offer loan amounts of up to Rs.25 lakh to customers.
Therefore, one needs to make sure the financial institution they choose for the online loan offers them sufficient loan amount. Ensuring this will help parents fund their kids’ higher education expenses.
- Interest rate
Rate of interest is one of the most critical factors, which can determine the best option for higher education loan. This is because the EMIs and the total cost of the loan depend upon it. One can compare the rates offered by different financial companies and choose the one that offers them a loan at competitive rates of interest.
Further, one can avail better interest rate for personal loan by considering these factors –
- Maintaining a credit score of 750 and above is essential to avail such loans, as this is an unsecured loan. Hence, financial institutions look for the applicant’s credibility to confirm that they will be able to repay the loan in future. Consequently, individuals must maintain a decent CIBIL score to avail the most competitive rates of interest.
- Financial companies check the repayment history of applicants before approving a loan. Hence, individuals, who have a good credit repayment record, can get a better quote for an interest rate.
- A loan may comprise several charges like processing fee, interest charge, etc. Have a look at those before choosing the lender as these increase the cost of a loan.
Financial companies offer customers a flexible range of tenors (up to 60 months) to choose from for their unsecured higher education loan. Individuals should choose a lender that offers a flexible range of tenors so that loan repayment becomes easier.
- Ease in access
Easy application procedure and quick disbursal time make it convenient for individuals to avail loans. Hence, parents should look for lenders that have an easy application process. Additionally, approval and disbursement times must be quick as well. Some companies disburse the loan amount within 24 hours.
Further, NBFCs like Bajaj Finserv make the loan application procedure simple for the borrowers with the introduction of pre-approved offers. Such offers are available on several financial products such as personal loans, business loans, etc. Individuals can check pre-approved offers instantly by inputting their name and contact number.
- Eligibility and documents
Individuals should look for the personal loan eligibility criteria of different financial institutions before deciding on the lender. Below mentioned are the eligibility criteria that financial companies seek.
(For salaried individuals)
- One should be an Indian resident.
- Age range between 23 and 55 years
- One must be a salaried employee of an MNC, private, or public firm.
- The minimum salary range depends upon the city of residence.
(For self-employed professionals)
- Age should be between 22 and 55 years.
- CIBIL score should be above 750.
- One should have a business vintage of at least 3 years.
These are some of the basic requirements for most financial lenders. Hence, one should avoid financial institutions that ask borrowers to fulfil complex eligibility conditions.
Considering the above-mentioned pointers, individuals will be able to make better decisions regarding choosing the right lender for personal loan. A wise decision will help them acquire loans at a beneficial cost, and they shall be able to fund their child’s higher education better while not harming their savings.