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Tata Capital > Blog > Personal Use Loan > Can You Take a Personal Loan and Education Loan Simultaneously?

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Can You Take a Personal Loan and Education Loan Simultaneously?

Can You Take a Personal Loan and Education Loan Simultaneously?

Yes, you can! Taking a personal loan and education loan simultaneously is possible. The approval for the same will depend on factors like:

  • Previous loan repayment history
  • CIBIL score
  • Income
  • DTI ratio

Why consider taking a personal loan and education loan simultaneously?

While the answer to “can I get education loan if I have personal loan” is yes, you should also be aware of when that would be ideal.  

In the following situations, taking both loans simultaneously seems more prudent: 

1. When your education loan doesn’t fully cover your academic and living costs, a personal loan can be taken to manage other essential expenses. 

2. To build your financial credibility and increase your CIBIL score by demonstrating your ability to manage repayments of two loans effectively and on time.

3. To get quick access to funds without affecting your education financing through a personal loan when you have unexpected family expenses or medical emergencies while you are pursuing your education. 

Also, read – What is the Moratorium Period?

Factors to consider before applying for both types of loans simultaneously

If you have already availed of education finance but need more funds to meet additional expenses, opting for a personal loan for education can help. Here are a few things to keep in mind before approaching your preferred lender.

#1 Consider your debt-to-income ratio

Lenders check your debt-to-income or DTI ratio before approving your loan. DTI ratio is calculated by dividing your current debt repayments by your total income. Here, if a major chunk of your income is being spent on meeting monthly debt obligations, you have a high debt-to-income ratio.

If your DTI ratio is over 35%-40%, the lender may perceive you as inept to pay new EMIs. A high DTI ratio lowers your loan approval chances, and the lending institution can charge you a higher interest rate.

#2 Interest rates for education loan vs personal loan taken together

When you opt for both education and personal finance together, whichever loan you apply for second will likely come at a slightly higher interest rate.

In a nutshell, if you apply for a study loan first, the personal loan will likely come with a relatively higher ROI and vice versa. So, you must compare various loan offers, discuss with lenders, and negotiate the loan terms before applying.

#3 CIBIL score requirements for simultaneous personal and education loans

Before your loan application is approved, lenders review your CIBIL or credit score. This score lies within a scale of 300 to 900 points, and the closer you get to 900, the higher your chances of loan approval at more attractive interest rates. Here, a high credit score indicates a health repayment history and improves your personal loan eligibility.

If your CIBIL score is high, ideally 750 or above, chances of simultaneous loan approval at lucrative interest rates go up significantly. Before approaching your lender, run frequent checks on your credit report to get rid of any errors or discrepancies.

#4 Check for additional charges beforehand

If you are taking two loans simultaneously, you will likely pay a one-time processing fee on both. There may be other charges associated with both your loans, like prepayment penalties, foreclosure charges and more. Check for additional expenses, if any, before signing the loan agreement.

Choose a lender that foregoes these costs, especially if you will service two loans simultaneously. With Tata Capital, you pay zero penalties on part prepayment after 6 months from taking the loan.

Also, read – What is Loan Modification?

Eligibility criteria for availing both loans together

At Tata Capital, getting both loans is easy. You just need to meet the basic eligibility criteria for an education loan vs personal loan:

For education loan: 

  • You should be an Indian citizen aged 18 to 35.
  • You must have completed 10+2 or a diploma from a recognised Board/Institution.
  • Your co-borrower must have a good credit score.

For personal loan:

  • Your age should be between 21 and 58 years. 
  • You should have a minimum monthly income of ₹15,000.
  • You must have at least 1 year of work experience.

Also, read – What is a Subsidized Loan?

Education loan vs personal loan: Key differences when applying together

Before you apply, there are certain differences between an education loan vs personal loan that you must be mindful of: 

FactorsEducation loanPersonal loan
PurposeTo finance educational expenses, such as tuition fees, accommodation, travel, study materials, exam charges, laptop costs, etc. To finance any significant personal expenses like renovations, medical emergencies, or weddings.
Eligibility Tracks your academic track record, institutional admission, and your co-applicant’s profile.Depends on factors like income consistency, credit history, and repayment capability.
Repayment tenureLonger tenure of 7-13 years, easing immediate financial pressure on you.Shorter repayment tenure, typically up to 6 years, allowing you to clear the debt faster and pay less total interest.

Also, read – What is Co-Lending?

Repayment strategies for managing multiple loans

When you take more than one loan, managing them can get challenging, and without a plan, you may even put yourself at risk of default or a debt trap. To avoid that, you need to have proper repayment strategies: 

  • Automate your loan repayments to avoid missing deadlines and costly penalties. 
  • Track all your monthly expenses, including your loan EMIs, to know your spending patterns and where you can cut back costs.
  • Pay off higher-interest loans first to mitigate your financial burden. 
  • Consider restructuring the loan terms after discussing your repayment challenges with your lender, if you are having difficulty repaying your loans. 
  • Monitor your monthly finances and make budget adjustments to keep repayments on track. 

Conclusion

Are you looking for a reliable lending institution to help you with personal and education finance together? Turn to Tata Capital!

We extend education loans and personal finance at attractive interest rates, with minimal paperwork and customisable repayment terms. If you wish to calculate your monthly instalments before applying for the loans, click here to use our study loan EMI calculator and here to use our personal loan EMI calculator. Apply with us today!   

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FAQs

Can I get education loan if I have personal loan or will having an existing personal loan affect my eligibility for an education loan?

It might. When you have an existing personal loan, lenders will assess your debt-to-income ratio and CIBIL score to decide if you can manage an education loan as well. If these factors look strong, there’s a good chance of getting approved for an education loan.

What is the primary difference between an education loan vs personal loan for higher studies?

 

The primary difference between an education loan vs personal loan is their purpose. An education loan mainly covers academic expenses, and a personal loan is used for expenses like home renovations, medical emergencies, travel, weddings, or major purchases.

What documents are required to apply for a personal loan and an education loan simultaneously?

At Tata Capital, a personal loan requires basic KYC documents such as your Voter ID, Passport, Driving License, or Aadhaar Card for address and photo ID proof, along with your salary slips, bank statements, and employment certificate. 

 

For an education loan, you’ll need almost all the same documents, except the employment certificate. In addition, if you are salaried, you must provide your PAN card, income proof, and a signature verification. If you're self-employed, you’ll need to submit your ITR, profit-and-loss statement, and balance sheet.

How does DTI affect dual loan applications?

 

Your debt-to-income ratio (DTI) shows how much of your income already goes toward paying your debts. Higher DTI can make lenders hesitant to approve a second loan, as it signals lower repayment capacity.

Do I need collateral for both loans?

 

Collateral is mostly required for education loans, depending on the loan amount and your lender’s policy. Higher loan amounts often need some form of security, while smaller education loans may be approved without it.

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