How to Get a Personal Loan for Students in India

Higher education has ceased to be a luxury in India; it is a must. However, with the skyrocketing tuition costs and increasing cost of living, students normally seek assistance through financial aid under other scholarship programs or even an educational loan. This is when a personal loan for students in India transforms into a financial asset.

This blog is going to tell about the process of accessing a personal loan for students in India, requirements and documents, eligibility, and ways online lending platforms allow get personal loan for students even with a very small income and for applicants who are young and do not have a stable income stream yet.

Why Students Need Personal Loans in India

Today’s students face increasing financial demands:

• Tuition fees for professional courses often range from ₹3 to ₹10 lakh
• Hostel and living expenses in metro cities can touch ₹15,000–₹25,000/month
• Exam and coaching fees (like UPSC, CAT, NEET) can cost ₹50,000 to ₹2 lakh
• Laptop, travel, books, and gadgets often require an upfront investment

While education loans are available, they come with rigid terms, require collateral or a co-borrower, and are often limited to recognized institutions only. That’s where a personal loan for students without income or collateral becomes a flexible option.

Can Students Get a Personal Loan in India?

Yes, students can get a personal loan, but eligibility conditions and limitations are depending on:

• Age (typically 18+)
• Income source (part-time work or guarantor support)
• Credit history (or co-applicant’s)
• Institution/course type
• Loan amount and repayment ability

Many NBFCs and fintech platforms now offer credit lines and small-ticket personal loans even to young individuals, making credit more inclusive.

Personal Loan vs. Education Loan for Students

Types of Students Eligible for Personal Loans

Not all students qualify, but you may be eligible under these categories:

1. Students with Part-Time Jobs or Freelance Income

• Eligible for small personal loans or credit lines (₹5,000–₹50,000)
• Income proof, like bank statements or payslips, is needed

2. Students with a Working Co-Applicant

• A parent, sibling, or spouse can apply jointly
• Loan eligibility depends on the co-applicant’s income and credit score

3. Students in Professional or Tech Courses

• Lenders prefer students in engineering, IT, design, MBBS, MBA etc.
• Future earning potential makes repayment risk lower.

4. Postgraduate and Final-Year Students

• More likely to get approval, especially with a job offer in hand
• Better eligibility if placed or interning

Documents Required for Student Personal Loan

To apply and get a personal loan for student, you’ll typically need:

• PAN card and Aadhaar
• College ID or admission letter
• Proof of residence (utility bill or rent agreement)
• Bank statements (of student or co-applicant)
• Income proof (if any part-time job or freelance)
• Co-applicant KYC and salary slips (if applicable)

Loan Amount and Interest Rates

The loan amount you can get as a student depends on your profile:

Interest rates usually range between 11.99% and 24%, depending on lender policies and repayment capability. Some fintechs offer zero prepayment charges and flexible EMIs.

Real Stats: India’s Student Debt and Credit Trend

• As per RBI data, outstanding education loans in India stood at ₹88,347 crore as of FY24
• Yet only 7–8% of Indian college students apply for formal education loans
• Over 65% of students rely on family savings or informal borrowing
• Fintech platforms are witnessing 20–25% YoY growth in student loan enquiries

This clearly shows a credit gap in student financing, especially for non-institutional needs like accommodation, travel, gadgets, or coaching.

Tips to Improve Eligibility as a Student

If you’re worried about rejection, here are some ways to boost your approval chances:

• Build a positive digital footprint (no bounced cheques or late payments)
• Maintain a small savings account with a healthy transaction history
• Get a co-applicant with stable income
• Apply for a smaller loan first to build credibility
• Use BNPL or credit card responsibly (if available)

Avoid These Common Mistakes

While applying for personal loans as a student:

• Don’t over-borrow beyond your repayment ability
• Always read the fine print (processing fees, interest slabs)
• Never skip EMIs — it can affect your credit score early
• Avoid loan apps that are not RBI-registered NBFCs
• Platforms follow RBI norms and offer transparent, customer-first solutions.

The Growing Role of Fintech in Student Lending

In recent years, fintech platforms in India have emerged as game-changers in the student lending space. Unlike traditional banks, which often have rigid approval systems, fintech companies use alternative data models to assess creditworthiness. This means even students without a formal income can qualify for small loans based on digital behavior, transaction history, or educational background. With features like instant approval, digital KYC, and minimum paperwork, fintech lenders provide a seamless borrowing experience. According to a PwC report, India’s fintech adoption rate stands at 87%, one of the highest globally, and this includes growing adoption by students. Platforms like Stashfin are pioneering this shift, making financial inclusion for students not just a promise but a reality.

Final Words: Build Credit Early, Borrow Responsibly

Getting a personal loan as a student in India is no longer impossible, thanks to responsible lending platforms like Stashfin that empower young people without burdening them.

It’s not just about getting quick funds. When used wisely, small personal loans help you learn money management, build your credit score early, handle financial emergencies, and ease the pressure on your family.