Can you take a personal loan and an education loan at the same time? It’s possible to have both, but approval depends on factors like income stability, credit score, and your overall debt-to-income ratio.
Only about 4% of Indian students use education loans, so many families turn to personal loans to cover gaps. People usually consider a personal loan when an education loan doesn’t cover all expenses, such as travel, living costs, or a laptop purchase. Before applying, weigh the extra EMI burden and understand the benefits and risks of managing two loans together.
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What is an Education Loan?
An education loan finances academic expenses such as:
- Tuition fees
- Hostel or accommodation charges
- Books, laptops, exam fees
- Travel costs for studying abroad
Key features:
- Lower interest rates (typically 8–11% in India)
- Longer repayment tenure; up to 10–15 years
- Tax benefits under Section 80E of the Income Tax Act
- Moratorium period: repayment usually starts 6–12 months after course completion
- Collateral may be required for loans above ₹7.5 lakh
So, if you’re planning higher studies, education loans are the first choice because they’re cheaper and student-friendly.
Curious about the education loan interest rates? Read our guide on the lowest interest rate on an education loan in 2025.
Get an Education Loan with Higher Chances of Approval.
What is a Personal Loan?
A personal loan is an unsecured loan that can be used for any purpose, from medical bills to weddings, travel, or even as a personal loan for education if your education loan falls short.
Key features:
- Higher interest rates (10–18% depending on profile)
- Shorter tenure (1–5 years)
- No tax benefits
- Quick approval and disbursal
- No collateral needed
A personal loan is flexible, but more expensive in the long run compared to an education loan.
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Education Loan vs Personal Loan
Here’s a quick side-by-side look at how education loans and personal loans differ in purpose, cost, and repayment terms.
Tip: If you only need extra funds for rent or travel, consider topping up your education loan first; it’s cheaper than a new personal loan.
Want to understand how education loans work from application to repayment? Check our guide on how education loans work in India.
Can We Take Personal Loan and Education Loan Together?
Yes, you can. But whether your application gets approved depends on:
- Credit Score: Lenders prefer 700+ for multiple loans.
- Debt-to-Income Ratio: Ideally below 40% of your monthly income.
- Income Stability: Salaried professionals and parents with steady income stand a higher chance.
- Past Repayment History: Any defaults or delays in existing loans reduce your approval chances.
Example: If your education loan covers only tuition but not hostel rent, you may apply for a personal loan for education-related expenses to bridge the gap.
Applying for an education loan with a limited credit history or low CIBIL score? Learn how to get an education loan with a low CIBIL score.
Can a Student Get a Personal Loan?
Banks rarely lend to students without income, but you can qualify if:
1. Co-applicant/Guarantor
A parent or guardian with a steady income co-signs. Approval depends mainly on their credit and salary.
2. Own Income
Verified part-time or freelance earnings strengthen the application.
3. NBFC or Digital Lenders
Some approve small personal loans when a parent’s documents are included, but rates are higher.
4. Loan Against FD
Offering a fixed deposit as collateral lowers risk and interest.
Ensure the co-applicant’s credit report is clean and EMIs are paid on time.
Factors to Consider Before Taking Both Loans
- Double EMI Burden: Managing two loans at once can stretch your budget.
- Higher Overall Interest: Personal loans add costlier debt.
- Approval Challenges: If you already have a big education loan, lenders may hesitate unless your income is strong.
- Impact on Credit Score: Multiple loans can lower your credit score if repayments are missed.
- Hidden Charges: Processing fees, prepayment penalties, and insurance costs can add up.
So, while it’s possible, think carefully if you can handle the repayment before committing.
Looking for a collateral-free education loan option to simplify your borrowing? Explore Education Loan Without Collateral: Eligibility & Rates 2025
What Reddit Users Say About Taking a Personal Loan Before an Education Loan
Reddit User in r/india shared:
“[ASKINDIA] If I apply for a personal loan now, can I get an education loan one month later?
Yes, so I have this question as I’m sceptical about loan processes. I’ll need an education loan in one month, but I need a personal loan right now for my financial crisis.
Any help or advice here is appreciated!”
Insight:
This is a common dilemma for students or parents facing short-term cash needs. Taking a personal loan just before applying for an education loan is allowed, but it raises the debt-to-income ratio and could impact the lender’s risk assessment.
What Do We Infer?
- Banks will review your existing EMIs and credit score before approving an education loan.
- A recent personal loan can reduce eligibility if your income isn’t strong or if your CIBIL score dips below the preferred 700+ range.
- A co-applicant with a stable income can offset the impact and improve approval chances.
Tip:
If urgent funds are needed, consider a top-up on the upcoming education loan or a secured loan against a fixed deposit. These options may keep your credit profile cleaner and simplify the education loan approval process later.
Taking a personal loan and an education loan together is possible, but not always advisable. Education loans are cheaper, longer, and student-friendly, while personal loans are costlier but useful for immediate needs.
If your education loan doesn’t cover all expenses, a personal loan for education can help. But take both only if your repayment capacity and the co-applicant’s income are strong. Looking for flexible financing?
Propelld offers education-focused loan solutions designed to cover tuition, living costs, or unexpected expenses with student-friendly repayment options. Check Your Eligibility with Propelld today!
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