Funding your higher education is probably the most important investment of your life. A good education can get you many career opportunities in the future. Conversely, the lack of a formal degree could hold you back from reaching the heights you desire. Keeping this in mind, many students apply for a loan to fund their higher education.
An education loan can help students finance their higher education without the need for providing collateral. However, given the extensive documentation and conditions that come with certain traditional education loans, students may also opt for a similar unsecured financing option in the form of a personal loan for education.
Difference between a traditional education loan and a personal loan
A traditional education loan has a specific purpose for which it has to be used, and hence the amount is subject to your course fees. On the other hand, a personal loan meant for funding education can be used for multiple purposes such as course fees, taking care of living expenses, or even funding travel and moving costs. This makes it much more versatile.
Traditional education loans require education records, an acceptance letter from the university you apply to, and several additional documents for verification, making the process lengthy.
Since it is mainly for students, this kind of loan may require your parent or guardian to have a good credit score as well as the signature of a third-party guarantor to ensure it is repaid on time.
How can a personal loan help?
A personal loan that covers your education is faster to get and requires a lot less documentation than a traditional education loan.
Many banks and financial institutions may offer pre-approved personal loans based on your credit history or account history with them.
When it comes to choosing your course, personal loans can be helpful since they don’t require your course or institution of choice to be recognised by a central authority, giving you a wider choice.
Since they are unsecured, they don’t require any collateral. They don’t require a guarantor to co-sign on the loan agreement either. All you need to do is show proof of your ability to repay the loan in the form of past salary slips and employment records.
They also have the benefit of instant approval and quick disbursement. This makes them easier to plan around. As soon as you secure a good personal loan interest rate at an institution of your choice, you could get the loan amount in less than an hour of application.
It is important to know every institution’s interest rate and eligibility criteria before applying. A reliable personal loan EMI calculator can tell you exactly how much you will have to pay each month so that you can create a budget for your expenses accordingly.
Don’t let money stand in your way
Education is an important factor that can govern your financial situation for the rest of your life. Whether you are a student wanting to apply for a specialisation course, looking to change career paths, or simply want to upskill yourself, higher education could be the answer to securing a better future. At such times, financial concerns shouldn’t hold you back from making the best decision for yourself.
The versatility and flexibility of a personal loan for education could make it a better choice for you than traditional education loans. However, make sure you conduct your own research and then make an informed decision.
