Personal loan requirements

Education Loan Procedure in India

According to a report by Statista, India tops the category for highly educated migrants moving out of the country, with almost 3.12 million students migrating yearly. Education loans are the way for the new generation of India to obtain international exposure in their respective majors. In the article below, the process for applying for an education loan is discussed briefly.

Loan Eligibility Criteria

Once the educational institution for higher studies is chosen from within or outside India, applicants must ensure they meet the eligibility criteria for a personal loan for studies. The criteria for borrower’s age, education, country for higher studies, and collateral value are followed by institutions as per their policies. Applicants must ensure they meet the eligibility criteria for their personal loan requirements.

Application Process

Loan applications are submitted both online and offline as convenient to the borrowers. The application letter involves a declaration for securing the loan, the degree, the name of the educational institute, the country where the university is located, and the currency for conversion.

Documentation

A personal loan for studies or educational loans requires specific documents deferring as per institutions since most offer loans based on collaterals. They need to submit the official admission letter from the educational institute, the tenure, fee structure of the course/degree, income documents, and fixed deposit ownership if any.

Collateral Requirements

Educational loans below Rs. 7.5 lakhs are allowed without a collateral attachment in India. However, loans above the collateral-free range require any residential, commercial, or industrial property as a guarantee. Applicants might opt for fixed deposits as collateral to ensure their personal loan requirements are met.

Personal Interview

Once the admission and collateral documents are submitted to the lender, the applicant needs to appear and clear the personal interview conducted by experts on behalf of the lending institution. The experts question applicants regarding their past studies, academic performance, course details, and educational institute details., 

Approval and Loan Disbursement

After the successful application and KYC verification process is completed, the loan amount is credited directly to the bank account mentioned by the university/college the applicant wishes to study. They can even opt for semester-wise payments if required.

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Key Differences Explaining Personal Loan vs Overdraft

The lending market is growing with time and is accessible online to get finance during a financial crisis effortlessly. Two of the most popular credit lines are personal loans and overdrafts. Here are the key differentiating points to understand what they entail:

  1. Meaning: A personal loan is a debt for a certain period at a rate of interest. Various eligibility parameters are the base for the approval of the personal loan. Apply online on the lender’s official website. On the other hand, an overdraft is a credit facility offered by financial institutions to their existing clients depending on their account balance. 
  2. Disbursal: Lenders provide a lump sum amount to personal loan applicants. On the other hand, an overdraft facility allows customers to withdraw funds up to a limit as and when required up to a limit. These excess funds are other than the availability in their accounts. 
  3. Processing and Availability: Personal loan requirements and processing involve verifying the documents submitted. In contrast, an overdraft credit facility allows existing customers to withdraw the excess amounts without further processing.
  4. Debt Limit: The personal loan amount is usually higher than an overdraft facility. 
  5. Interest Rate: Overdraft interest rates are usually higher than those charged on a personal loan. Apply online with reputable lenders offering personal loans at competitive interest rates, starting at as low as 11.99%. 
  6. Tenure of the Debt: Personal loans are offered for a long duration of up to 5 years. On the other hand, an overdraft facility is a short-term debt that has to be cleared within a year generally. 

One can choose a credit line and meet urgent or planned expenses based on the fund requirement.