When I was planning to fund my studies abroad, I didn’t know the difference between personal loan and education loan. I had heard of both, but didn’t understand how they worked. So, I reached out to my cousin, a financial expert, to help me make the right choice. He explained the distinctions clearly and gave me a better understanding of what each loan type offers. I have shared what I learned from him about the difference between them.
Difference Between Education Loan and Personal Loan
The primary difference is the purpose of the loan. A personal loan can be used for any expense, including education, but also covers other personal needs like home repairs, medical expenses, or travel. However, education loans are specifically for educational purposes, such as paying for tuition, books, and accommodation.
Here is what I learned more.
Education Loan | Personal Loan |
An education loan offers a longer repayment term, ranging from 12 to 15 years. | The repayment period for a personal loan is usually shorter, typically around 8 years. |
Education loans have a lower interest rate, making them a more affordable option if you\'re specifically funding your education. | Personal loan interest rates can be higher, ranging from 9.99% to 44%, depending on your credit score and loan amount. |
Education loans are often collateral-based, especially for larger amounts. | Personal loans don’t require collateral. |
By the end of our conversation, I had a clear picture of the difference between these two.
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Authors Of The Question
What is Difference between Personal Loan and Education Loan?
Rehma
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17 days
2024-12-31T17:52:19+00:00 2024-12-31T17:52:20+00:00Comment
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