Every year thousands of students across the globe leave their home country to fulfill their dreams of studying abroad. They go in search of better opportunities and exposure to the careers that wish to pursue. Some countries have specialization in various courses whether its fashion, business or mass media. However, a large percentage of these students often find it difficult to finance their higher studies in a foreign university.
Most of them try to save up a large amount from their personal savings. Some might even consider lending a huge amount from your family and friends. But this will only create havoc if any problem or misunderstandings arise in the future. So, how to finance your higher studies? In such times, taking a loan from a bank is the only easy option to finance your education. A loan will cover all your educational expenses and you can focus solely on achieving your dreams. But choosing between personal and education loans to fund your higher education is a tough task and needs a lot of attention, patience and thought process.
Personal Loan vs Education Loan
A personal loan can be used for plenty of purposes. It can be used for funding education, tuition fee, accommodation and a lot more. Unlike any other loan, a personal loan is not secured against any asset. As it is an unsecured loan, the borrower does not need to put up any collateral like gold or property to avail it, the lender, in case of a default, cannot auction anything you own. For instance, you can check your eligibility on Bajaj Finserv personal loan EMI calculator here.
However, the interest rates on personal loans are higher than those on home or car loans because of the greater perceived risk when sanctioning them. When you apply for a personal loan the process is quite simpler as you have to provide minimal documents and once it gets verified you get the funds deposited into your bank account. You can get personal loans from banks, private online lenders as well as credit unions.
The cost of education is on the rise these days, not everyone gets a scholarship to help with the college expenses and get admissions into reputed universities. In such cases getting an education, loan seems to be the single best solution. An education loan is a loan that students apply for in order to complete their educational requirements.
Almost all banks offer education loans to students who wish to finance their higher studies. These funds acquired from education loan gets deposited to your school/college’s financial aid office. You can get an educational loan from the federal government, private online lenders and banks. The interest paid on education loans can be deducted from the annual taxes.
Let’s have a look at the pros and cons of both the loans
Personal Loan Benefits
You can use the money attained from a personal loan to meet other expenses. This means there are no restrictions on the use of personal loans. It can fund your home renovation, travel expenses, and medical bills. To apply for a personal loan, you don’t need any verification regarding your education, and hence it only requires minimal documentation, which makes the whole process a lot easier. You can consider availing a personal loan at Finserv MARKETS. You can easily avail a loan amount of up to 25 lakhs with a repayment tenure ranging from 12-60 months. Personal loans available at Finserv MARKETS come with attractive features such as flexible repayment options, unlimited withdrawal, competitive interest rate, etc. Moreover, you can also customize your personal loan according to your convenience.
Education Loan Benefits
An education loan offers a lower interest rate as compared to a personal loan. If you are qualified for a government-subsidized loan, you will have to pay even lower interest rates. Education loan generally offers a longer repayment tenure that can go up to 20 years. You have to approximately pay after 6 months to 12 months of completing your education. This way, your monthly EMIs are low and you are easily able to manage other expenses.
Personal Loan Drawbacks
When compared to a personal loan, an education loan offers a lower interest rate. If you qualify for a government-subsidized loan, you will have to pay lower interest rates. Education loan generally offers a longer repayment tenure that can go up to 20 years and have to be paid approximately after 6 months to 12 months of completing your education. This way, your monthly EMIs are less in amount and you can easily able to manage other expenses.
Education Loans Drawbacks
The fund received from the loan gets directly deposited to your school/college’s financial aid office and cannot be used to manage other expenses. If you are not able to find a job after completing your degree or if your income level does not match in the right ratio with the monthly instalment, it can be difficult to repay the loan amount. All of this can ruin your credit history and the feeling of not being able to manage your expenses will keep you under a lot of stress. So, you need to be aware and analyze your current situations well before applying for an education loan.
Now, that you have the information required for both the loans you can analyze well and make your decision. However, a personal loan can be a good option if you need to handle other expenses apart from just education. But if you are looking for more flexibility and a lower interest rate for repayment, an education loan would be the ideal choice.
You can apply for a Personal loan for Education at Finserv MARKETS. They offer a variety of digital lending products which have become a preferred destination for all kind of customers. Their hassle-free online application process with minimal documentation of loan makes it an ideal choice for getting a loan. Whether it is going for that much-needed vacation, pursuing your desire of studying abroad, buying a home or starting your own business with the right financial solution, you can now fulfill all of your dreams with ease. You can also download our personal loan app from Play Store and App Store.
You get flexible loan repayment tenure of up to 12 to 60 months, customers can enjoy the freedom of choosing their own tenure. With personalized pre-approved offers, instant approvals, and quick disbursal of loan, Finserv MARKETS, offers the most attractive interest rates. Finserv MARKETS is a one-stop destination for all the financial needs of an individual and provides a unique digital experience to the customer.