Nowadays, the cost of higher education is skyrocketing. Covering college fees, books, hostel expenses, and other necessities has become a major challenge for students. In such a situation, a personal loan can prove to be a helpful option. However, choosing the right personal loan for students is a difficult task. In this blog post, we will discuss in detail the best personal loans for students, their features, and the application process.
Why Do Students Need Personal Loans?
Students seek personal loans for various reasons, some of the main reasons being:
- Higher Education Fees: Studying at good colleges and universities is very expensive. Many students do not have enough money to complete their studies without a loan.
- Books and Other Educational Materials: Course books, notes, and other educational materials are also quite expensive.
- Hostel and Living Expenses: For students studying in other cities, hostel and living expenses are also a major issue.
- Laptops and Other Devices: Nowadays, laptops, tablets, and other devices are also needed for studies.
- Skill Development Courses: Students take various types of courses to enhance their skills, for which money is also required.
- Emergency Situations: Medical emergencies or other sudden expenses can arise at any time, for which money is needed immediately.
Types of Personal Loans for Students:
Several types of personal loans are available for students, some of the major ones being:
- Education Loans: These loans are specifically given for educational expenses. They usually have lower interest rates and longer repayment periods.
- Skill Development Loans: These loans are given to students to pursue various types of courses to enhance their skills.
- Consumer Durable Loans: These loans are given for buying laptops, mobiles, and other electronic devices.
- Online Personal Loans: These loans can be easily obtained through online platforms. They usually take less time and require fewer documents.
- Gold Loans: If you have gold, you can also take a loan by pledging it.
Things to Consider Before Taking a Personal Loan:
Students should keep certain things in mind while taking a personal loan, so that they can avoid any problems in the future:
- Assess Your Needs: First, assess your needs and determine how much money you actually need. Borrow as little as possible.
- Compare Interest Rates: Compare the interest rates offered by different banks and financial institutions. Choose the loan with the lowest interest rate.
- Repayment Period: Choose the repayment period according to your repayment capacity. Taking a loan for a longer period will result in paying more interest, while taking a loan for a shorter period will result in higher monthly installments.
- Other Charges: Inquire about processing fees, prepayment charges, and other charges while taking the loan.
- Terms and Conditions: Read the terms and conditions of the loan carefully. If you have any difficulty understanding any condition, ask the lending institution for clarification.
- Check Your Credit Report: Check your credit report before taking a loan. A good credit report increases the chances of getting a loan.
- Co-applicant: If possible, include a co-applicant. This increases the chances of getting the loan.
- Source of Income: Even if you are a student, the lending institution will want to know your source of income. If you do a part-time job, provide information about it.
How to Apply for a Personal Loan:
The process of applying for a personal loan may vary depending on the bank or financial institution. However, some common steps are as follows:
- Research: Get information about the loans offered by different banks and financial institutions.
- Fill out the Application Form: Visit the website of the bank or financial institution and fill out the online application form.
- Submit Documents: Submit copies of the required documents.
- Verification: The bank or financial institution will verify your documents and information.
- Approval: If your application is approved, you will receive the loan amount in your bank account.
Documents Required for Personal Loan for Students:
Students need some documents for a personal loan, some of the major ones being:
- Identity Proof: Aadhaar card, Voter ID card, Passport, etc.
- Address Proof: Aadhaar card, Electricity bill, Water bill, etc.
- Age Proof: Birth certificate, School leaving certificate, etc.
- Student ID Card: ID card issued by the college or university.
- Income Proof (if any): If you do a part-time job, its salary slip or bank statement.
- Academic Documents: Mark sheets or certificates of your previous classes.
- Bank Statement: Bank statement of the last few months.
Conclusion:
A personal loan can be helpful for students to pursue higher education and fulfill their dreams. However, one should be careful while taking a loan and get complete information about their needs, interest rates, repayment period, and other charges. The information given in this blog post will help students choose the right personal loan and apply easily.