Personal loans are all-purpose loans that you can use for meeting any financial need that you have. Education costs are one such financial need which, given the rising costs, becomes challenging to meet with your savings. Moreover, when opting for higher education, the cost of the course poses a threat to your finances. This is when many of you avail loans for meeting the cost of higher education.
Personal loans give you the funds that you require for paying for your education costs. However, there are three main aspects of the loan which you should keep in mind before you avail it. These aspects are as follows –
The loan has an eligibility criteria
While it is true that personal loans are readily available, there is an eligibility criteria list that you would have to qualify on before the funds would be sanctioned to you. These parameters include the following –- Age – your age should be between 21 years and 65 years
- Income – your net monthly income is taken into consideration when deciding the eligibility for a personal loan. If you live in a metro city, your net monthly income should be INR 20,000 and above, and if you live in a non-metro city, your net monthly income should be INR 15,000 and above. Your income decides the amount of loan that you can receive as the loan quantum is calculated based on your monthly income and existing liabilities.
- Occupation – you should either be a salaried employee or a self-employed individual having a steady source of income for availing the loan
- Work experience – your total work experience is also taken into consideration to determine how stable your income is. Work experience of 1 to 3 years is required as the minimum. Moreover, there would also be a requirement of continuous employment with the current organisation for at least the last 6-12 months. In the case of business, a business vintage of 3-5 years is required.
• CIBIL score – the last important parameter is your credit score. Only if you have a score of 650 and above would you be allowed to avail the loan.
So, if you are thinking of availing the loan, first, check whether you meet these eligibility parameters of the loan.
Check the interest rate
Personal loans come with higher interest rates because they are unsecured loans. So, before you avail the loan, shop around. Many lenders are offering a personal loan, and each lender has a different interest rate. Search for the lowest rate so that the loan becomes affordable.Calculate the EMIs
Before availing the loan, you should always check the EMI payable for the selected loan amount. The EMIs should be affordable so that the loan is paid without any default or financial difficulty. Use the available personal loan EMI calculators to calculate the EMIs of the loan that you seek. Change the loan amount or repayment tenure to find the most affordable EMI for the loan.
A personal loan can fund your or your child’s higher education, but the above mentioned points should be kept in mind before you apply for the loan.