Key Differences Between a Personal Loan and Education Loan

Have you put a pause on your plan for higher education due to lack of funds? Then you can now use a personal loan for higher studies to support your expenses. Many people feel that an education loan is the only option available to support your college and university fee.

However, there is another alternative available in the form of a personal loan. Both financing services are easily available and offer a range of benefits to the borrower. Here is a list of common differences between a personal loan for higher studies and education loan.

1. Loan amount

One of the first differences that you will see between a personal loan for higher studies and education loan is the actual amount. An education loan allows you to borrow a more extensive sum of amount to fulfil your college or university expenses. However, a personal loan also gives you a sufficient borrowing limit. Additionally, the personal loan borrowing limit is different from lending organization to organization, which is why you should always conduct research.

2. Tenor

When it comes to the tenor of a personal loan for higher studies, it is usually up to 60 months. However, the same in the case of an education loan can be more elaborate. Similar to the borrowing limit, the tenor is also different in every firm. Hence, if you are looking for a financing option that gives you an extended repayment period, then opting for an education loan is better. However, a personal loan is a quicker option.

3. Interest rate

Education loan interest rates are usually lower than that of a personal loan for higher studies. Personal loan interest rates are considered to be one of the most expensive financial alternatives available in the Indian market. Thus, a lot of people like to opt for an education loan instead. However, if you shop around for the best possible interest rate, then there are chances of you finding affordable alternatives. You can even consider peer-to-peer lending when it comes to personal loan for budget-friendly interest percentage.

4. Limitations

One of the biggest drawbacks that you can see in education loans is the limitations in place. This type of financing service can only be used for paying your college fee and in house living. However, with the help of a personal loan for higher studies, you will be able to deal with a number of different expenses easily. Whether it is staying in a hostel, transportation, or food expenses, it can all be dealt with using a personal loan.

5. Repayment option

When it comes to repaying your education loan, you start once your college course is finished. However, in the case of a personal loan for higher studies, you need to start paying as soon as you receive the funds. If you are someone who is working along with finishing college, then opting for an option like a personal loan is not that inconvenient.

Bajaj Finserv has a range of financing alternatives available like personal loans, home loans, business loans, and EMI credit. For all of these financing services, you can even find various pre-approved online offers. By using these deals, you can make your loan process less time-consuming and completely hassle-free.

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