1.Lender

Each lender offers unique terms, interest rates and repayment flexibility. Research lenders to find one that best aligns with your financial situation and educational goals. Factors like customer service, loan processing time and flexibility in terms can make a difference in the overall experience.

2.No Collateral Required

Unlike secured education loans that often require collateral like property or other assets, personal loans are generally unsecured. This means you don’t have to pledge any assets to access funds, making it an appealing option for students or individuals who may not have substantial assets. Without collateral, you can secure a loan based on your creditworthiness and income, which simplifies the borrowing process and reduces potential risks associated with asset-backed loans.

3.Credit Score

Your credit score directly affects your loan eligibility and the interest rate offered. Lenders generally prefer a score above 650 for favourable rates, but some might approve loans with a lower score at a higher interest rate. A high score indicates you’re a responsible borrower, thus reducing the risk for lenders. If your score is low, consider improving it by paying off existing debts and correcting any errors in your credit report. A higher score could save you significantly in interest costs over the loan term.

4.Loan Amount 

Calculate the exact amount you need for your education, including tuition, accommodation, books and other living expenses. Requesting more than necessary can lead to higher EMIs and longer repayment terms, increasing the financial burden. Lenders will assess your income and credit history to determine the amount you qualify for, so it’s essential to have a realistic estimate. Keep in mind that while a larger amount might seem like a solution, it also means a bigger repayment commitment​.

5.Paperwork

Preparing the necessary documentation ahead of time can expedite the loan process. Typically, lenders require identity proof (such as a PAN card), address proof, proof of admission and income documents like salary slips or IT returns of the borrower. Some lenders allow digital submissions, which can make the process faster and more convenient. Having all documents ready helps avoid delays in the approval and disbursement stages.

6.Repayment 

Choose a repayment term that aligns with your financial ability. Shorter tenures mean higher EMIs (Equated Monthly Instalments) but less interest over time, whereas longer terms reduce EMI amounts but increase the overall interest paid. Check if the lender offers prepayment options without penalties, as this can allow you to repay the loan early if your financial situation improves. Managing EMIs within your income limits is crucial to maintain a good credit score.​

7.Quick Disbursal

Timeliness of fund disbursement is essential, especially when education fees have strict payment deadlines. Many lenders now provide instant disbursal for approved loans, with digital-only lenders often transferring funds within a few hours to a day. Traditional banks may take a few days, but ensure all protocols are met. Understanding the disbursement process and timeline of your lender will help you plan better​.