can a student get a personal loan?

getting a personal loan as a student is difficult but not impossible. most lenders require a steady income source to approve a personal loan. students typically do not have one. but some options exist for those who need funds for education, travel, or other expenses.

the difference between a student and a working professional is the ability to repay. lenders look for income stability. without it, approval becomes harder. however, certain lenders offer loans to students with specific conditions.

options for students

education loans

many students turn to education loans first. banks provide these loans for tuition, living costs, and other academic expenses. the loan amount depends on the course, the institution, and the co-applicant's financial standing. public sector banks like SBI and bank of baroda offer education loans at competitive rates. repayment begins after the course ends, with a moratorium of 6 to 12 months.

personal loans with a co-applicant

a co-applicant with a stable income can make approval easier. the co-applicant, typically a parent or guardian, takes joint responsibility for repayment. the lender looks at the co-applicant's income and credit score. this arrangement works even when the student has no income of their own.

secured loans

pledging an asset like fixed deposits, gold, or property can help students access funds. the collateral lowers the lender's risk. interest rates on secured loans are lower than unsecured ones. the loan amount is tied to the value of the asset offered as security.

digital lenders

some fintech platforms offer small personal loans to students with no income proof. they use alternative data like bank statements, spending patterns, and academic records. loan amounts are small, typically up to ₹1 lakh. interest rates are higher, ranging from 18% to 30% per annum.

credit cards

students above 18 can apply for a credit card. some banks offer student credit cards with lower limits. the card can be used for emergency expenses. but interest rates on credit cards are high, typically 36% to 48% per annum.

eligibility criteria for students

lenders assess several factors before approving a loan for a student.

age. the applicant must be at least 18 years old. some lenders require the student to be above 21.

co-applicant. most lenders require a co-applicant with a stable income. the co-applicant's credit score and income determine the loan amount and interest rate.

institution and course. for education loans, the institution and course matter. loans are easier to get for courses at recognised universities with good placement records.

collateral. secured loans need collateral. the value of the asset determines the loan amount.

what to check before applying

interest rate. rates vary by lender and loan type. education loans from public banks start at 8% to 10%. personal loans for students can go up to 24% or higher.

processing fee. most lenders charge a processing fee of 1% to 3% of the loan amount plus GST.

repayment tenure. education loans offer longer tenures, up to 15 years. personal loans for students have shorter tenures, typically 1 to 5 years.

moratorium period. education loans come with a moratorium period covering the course duration plus 6 to 12 months. personal loans do not have this benefit.

co-applicant requirement. most student loans require a co-applicant. checking this before applying is essential.

frequently asked questions

1. can a student get a personal loan without a co-applicant?

rarely. most lenders require a co-applicant with a steady income. some fintech platforms offer small loans without a co-applicant, but interest rates are higher.

2. what is the minimum age for a student loan?

the applicant must be at least 18 years old. some lenders require the student to be above 21.

3. can a student get a loan for travel?

options exist but are limited. education loans do not cover travel unless it forms part of the course, and personal loans for students may be available for travel at high interest rates.

4. what documents are needed for a student loan?

identity proof, address proof, admission letter (for education loans), co-applicant's income proof, bank statements, and passport-size photographs.

5. can a student get a loan without a credit score?

education loans do not require a credit score from the student. the co-applicant's credit score is evaluated. some digital lenders offer loans based on bank statements instead of credit scores.