Top 10 Student Loan Apps In India In 2023
Students often find themselves in need of additional funds to meet various college expenses such as fees, books, extracurricular activities, food, and more. In times of urgent financial requirements, where parents might be unable to provide immediate support, student loan apps come to the rescue. These apps are known for their quick processing, round-the-clock availability, and reliability. While they offer a good credit limit for students in India, it's essential to be cautious and consider various factors before opting for such loans.
However, I want to express a personal reservation about endorsing student loan apps. The burden of debt can lead to unforeseen challenges. Yet, it's important to acknowledge that many students have used these apps responsibly and successfully managed their financial needs.
Here are some key considerations before using student loan apps:
1. Interest Calculation: Understand how the interest is calculated, considering factors like principal amount, tenure, and APR (annual percentage rate).
2. APR Importance: APR, which includes interest, processing fees, late fees, and other charges, is a crucial metric. Lower APR translates to better interest rates.
3. Loan Amount Impact: Recognize that the interest rate tends to decrease with higher loan amounts and vice versa.
4. Tenure Influence: Longer tenure may lead to higher interest payments, while shorter tenure could mean higher EMIs.
5. CIBIL Score Significance: Your CIBIL score affects interest rates. Lower interest rates are usually the consequence of a higher score, underscoring the significance of prompt repayments.
6. Deductions and Fees: Be aware that processing fees and other charges are deducted upfront, impacting the actual amount you receive.
7. Early Repayment Consideration: Some apps may not reimburse you for early repayments, and early payment might affect future eligibility.
8. Contacting References: In case of non-repayment, these apps may contact your references, adding social pressure.
9. GST Applicability: Note that 18% GST is applicable on all charges except interest.
10. Bank Account Requirement: Ensure you have a valid bank account as the loan amount is transferred directly.
11. Conversion to EMIs: Check if you can convert the repayment amount into EMIs.
Now, let's explore the top student loan apps in India:
1. KreditBee
KreditBee stands out as an instant personal loan app with quick loan disbursement. It caters to students in the mid/last stages of graduation and those opting for higher education.
- Loan Disbursal Time: 5 mins
- Documents Required: PAN card and Aadhar card / Passport
- Loan Amount Range: ₹1300 to ₹50,000
- Tenure: 3 to 10 months
- Eligibility Criteria: 21+ age, Indian, monthly income source, ₹25,000 min family income
- Interest: 18% to 30% per annum
- Processing Fee: Charged at 2.5% of the loan amount, with a fixed range between ₹85 to ₹1,800, in addition to GST.
Cons include restrictions for those below 18 and reported instances of customer care issues.
2. mPokket
mPokket focuses on quick loan delivery, particularly for college students. It offers a cashback reward system and an additional shopping section.
- Time to Disburse Loan: 2 to 5 mins
- Origin of Loan Amount: Transferred to either Bank Account or Paytm Wallet.
- Documents Required: College ID, PAN card, and Aadhar card / Driving license / Voter ID
- Loan Amount Range: ₹500 to ₹30,000
- Tenure: 2 to 4 months
- Eligibility Criteria: 18+ age, College ID
- Interest: 0% to 4% per month
- Processing Fee: Fixed between ₹50 to ₹200 + GST
- Late Charge: ₹8/day after due date
- Refer & Earn: ₹75/referral
mPokket has been criticized for a high-interest rate and delays in updating loan repayment status in CIBIL.
3. Pocketly
Pocketly offers flexibility with the ability to close the loan anytime. The low-tenure loan program is tailored to meet the needs of students.
- Loan Disbursal Time: Dynamic / User-specific
- Required Documents: PAN card and Aadhar card (Video KYC)
- Loan Amount Range: ₹600 to ₹10,000
- Tenure: 2 to 4 months
- Eligibility Criteria: 18-30 age
- Interest: 1% to 3% per month
- Processing Fee: ₹20 to ₹120 + GST
- Refer & Earn: Up to ₹500 Cashback / referral
- APR: 12% to 36%
Pocketly is praised for its low processing fees and APR but criticized for customer support issues.
4. Slice Borrow
Slice Borrow stands out for offering an interest-free loan for the first month, irrespective of the amount. It provides loans using the Slice app.
- Loan Disbursal Time: Instant
- Required Documents: PAN card, College ID
- Loan Amount Range: Up to ₹5 Lakh
- Tenure: Up to 12 months
- Eligibility Criteria: Student
- Interest: Dynamic / User-specific, 0% if paid within a month
- Processing Fee: 3% of loan amount
Slice Borrow is recognized for its interest-free first-month privilege, but it imposes penalty charges for defaults.
5. StuCred
StuCred claims the top spot due to its high trustability and popularity among students from various Indian colleges. It offers a credit limit that can fluctuate based on your loan repayment performance.
- Time to Disburse Loan: 1 to 5 minutes
- Required Documents: PAN card, Aadhar card, College ID
- Loan Amount Range: ₹1000 to ₹10,000
- Tenure: 2 to 3 months
- Eligibility Criteria: College Student
- Interest: 0%
- Processing Fee: 6% per month (all inclusive)
- APR: 72%
When consumers make on-time repayments, StuCred provides a monetary reward via scratch cards, and term extensions are allowed if necessary. However, its processing fees and annual percentage rate (APR) are elevated.
6. Sahukar:
Sahukar's app emerges as a advantageous option for students seeking modest loans, capped at ₹5,000. The platform applies a monthly interest rate of 3 percent on the loan amount. Eligibility criteria include being at least 18 years old and possessing a valid student ID from an accredited institution or university. Loan processing typically takes 24 hours, and repayment can be done within one to three months from the payment date.
7. Slice Pay:
SlicePay offers student loans without the burden of EMIs, utilizing MasterCard for transactions. To access this service, applicants need to provide their name, college details, ID number, and Aadhar and PAN details during the application process. The platform extends loans to both undergraduate and postgraduate students, with amounts reaching up to ₹10,000. The loan durations range from 30 to 90 days, accompanied by a 3% monthly interest rate. Funds are swiftly transferred through a unified payment interface or directly to the user's bank account.
8. CashBean:
CashBean stands out as a preferred choice for students in need of loans, allowing borrowing up to ₹60,000. The interest rate reaches up to 33% per annum, coupled with a processing fee of 18%. Operated by RBI registered P and C Financial Services Private Limited, CashBean ensures a reliable source for loans. The application process is entirely digital and paperless, with no credit history required. Eligibility criteria mandate Indian residency, a regular source of income, and an age range of 21 to 56.
9. The Red Carpet:
The Red Carpet adopts a distinctive method for personal loans, offering a line of credit rather than adhering to a fixed payment plan. This ensures flexibility for individuals who have received a personal loan from the company, allowing them to obtain a Ruby card. Functioning similarly to a bank card, it permits cash withdrawals up to $1,000 with no additional fees.
10. BadaBro:
BadaBro, a popular choice among Indian students, facilitates quick loans and deposits directly into the user's bank account. With over 100,000 users, BadaBro requires Aadhaar, PAN, Job ID (if applicable), and other relevant details for registration. The entire procedure, including credit score verification, is conducted online. Users can apply online, and BadaBro promptly credits funds to PayPal or the designated bank account. Moreover, users have the opportunity to accrue rewards by recommending BadaBro to their friends.
Each of these platforms addresses distinct loan needs, urging users to meticulously assess their individual features, interest rates, and repayment terms prior to selecting the most fitting choice. Responsible use of these loan services is encouraged to avoid potential challenges associated with debt.