Have your eyes set on an online degree? Consider a personal loan for online education to cover the expenses.
After the pandemic, remote education has rapidly emerged as a viable way to upskill and enrol in new courses. Online courses make learning more accessible, and they also help you save on living expenses and rent. Moreover, working professionals can take online courses part-time without leaving their job.
Online courses from prestigious universities often levy a high fee, especially if they provide you with a certificate of recognition or a degree post-completion. If you need quick funds to pay an online course fee and want to take a loan, here are five things you should consider.
#1 Choose a suitable lender
Don’t rush to apply to multiple lenders hoping to increase your chances of approval.
Interest rates, loan terms, and eligibility criteria vary among lenders. So, research and compare before applying. Choose a lender whose eligibility criteria you fulfil and who provides affordable interest rates.
#2 Keep your debt-to-income ratio below 40%
Your debt-to-income ratio is the amount you pay towards clearing your existing debt divided by your monthly income.
Ideally, your debt-to-income ratio should be below 40% to qualify for an education loan. So, pay off your credit card bills and any existing loans before you apply.
Additional Read: 5 Simple Ways To Manage Your Personal Loan EMIs
#3 Mention all income streams
Lenders check your monthly income to understand your repayment capacity. Therefore, it is wise to mention all sources of monthly cash flow.
If you have any part-time income, rental income, or interest income, fill it in your application.
Apart from this, make sure you apply for a loan amount that you can repay within your income. Use a personal loan EMI calculator to estimate a suitable EMI that you can repay comfortably. Enter the amount you need to borrow, your lender’s interest rate, and your loan tenure. The tool will calculate your EMI. Adjust these values till you arrive at an affordable EMI.
#4 Maintain a healthy credit score
Personal loans are unsecured loans, which means you do not have to pledge any security or collateral when you borrow the amount. In this scenario, the lender is taking a high risk when lending you the money, which is why they check your credit score.
The credit score is crucial because it represents your credit history, repayment behaviour, and how good you are at handling debt. Maintain a high credit score, preferably 750 and above, before applying.
#5 Avoid multiple loan applications
Your lender will check your credit score when you apply for a loan. They will issue a hard inquiry with credit bureaus to access your credit report and score.
If you have multiple loan applications, it will result in numerous hard inquiries. Hard inquiries bring down your credit score, and your application might be rejected. So, it is best to avoid multiple applications.
Additional Read: Tips To Avail Lowest Interest Rates On Your Personal Loan
Keep the above points in mind when looking for a personal loan for online courses.
If you’re looking for a lender with attractive interest rates and relaxed eligibility criteria, Tata Capital is here to help. Visit our website to learn more and apply online.