(Newswire.net — November 25, 2021) —

 

The COVID-19 pandemic of 2020 changed the world as we know it. Right from our personal lives, all the way to our professional careers, everything was turned upside down on its head. While the true devastating effects of the pandemic are yet to be fully comprehended, one which is surfacing recently is how professionals across the globe are taking up professional courses designed to help them upskill. Right from marketing and engineering graduates taking up online courses to humanity majors changing their career trajectory, a lot is changing in how we work.

 

If you, too, are thinking about enrolling in a professional course to upskill yourself, one question which must have triumphed over others is how can you fund your course? While there are many professional as well as personal loans available in the market, as a new borrower, it can sometimes get confusing to choose between them and thus in today’s blog post, we will share with you our take on both these financial instruments and help you choose the right option for you. 

 

Without further ado, let’s get started.

Personal vs Professional Loan: Definition

One of the first and most important aspects we ought to learn about is the essence of both these financial instruments.

 

In simple terms, a personal loan can be defined as a financial instrument, which you can leverage to borrow a certain sum of money, usually in the range of ₹10,000 to ₹25,00,000 and use the same to fund any of your expenses, right from paying the downpayment for a vehicle loan or paying for your professional course. 

 

The money from your personal loan is directly transferred to your bank account within 48 hours of approval, and you can pay it back via a flexible repayment plan while enjoying a competitive rate of interest.

 

On the other hand, a professional loan is a financial instrument which you can solely leverage for the purpose of your upskilling. While there are various types of professional loans available in the market, one of the most popular ones is where the loan amount is directly transferred to the course provider, and you need to pay back the amount in instalments. 

 

One advantage of this method is that you don’t need to worry about financial stress in the midst of your upskilling process, and since they generally arrive with fair interest rates, they are generally easy on the pocket. 

 

The Differences

Now that you are familiar with the essence of both a professional as well as personal loan, the next step is to understand the differences between them. While there are many, the most significant are as listed below. 

 

1. Loan Amount

Professional loans in India arrive in all shapes and sizes, and thus the approved loan amount generally varies between ₹100,000 all the way up to ₹75 lakhs. Since every professional upskilling course is different, lenders in this category generally give you a range of options such that it becomes easier for you to choose, and you do not need to be constrained by finances while applying for your professional course. 

 

On the other hand, personal loans in India generally arrive with a loan amount ranging from ₹10,000 to ₹500,000. 

 

While there are some which arrive with upto ₹50 lakhs approved amount, the lender, in this case, will generally charge you a hefty rate of interest, meaning they will be costlier to afford. Along with this, since the lender does not specify where you can spend the personal loan amount, you are free to choose the course provider who suits you best. 

 

2. Rate of Interest

Next to the loan amount, the second most important factor you need to consider while choosing between a personal and a professional loan is the rate of interest being charged. In India, most professional loans charge you an interest rate in the range of 11.25% per annum to 15.6% per annum. Considering that the approved loan amount in the case of a professional loan is quite huge, in our opinion, this rate of interest will be affordable for many. 

 

On the other hand, personal loans in India generally charge you an interest rate in the range of 9.60% per annum to 26% per annum, depending on the approved loan amount. Keeping in mind the fact that you are free to spend the loan amount anywhere you fancy, we feel this is a pretty affordable rate of interest. 

 

Along with this, since most personal loans in India arrive with a flexible repayment plan, you can comfortably pay back your EMIs without needing to take any financial stress. 

 

3. Mode of Disbursement

As we shared earlier, professional loans in India arrive in all shapes and sizes. Right from ones who disburse the entire loan amount to your bank account to those who tie up with course providers and transfer the loan amount to them, you have a range of options to choose from. However, the most widely available form of professional loan is one where the loan amount is directly transferred to the course provider. 

 

While this is definitely a limitation, taking into account the fact that you are not at free will to choose the course provider, we are sure there are a few upsides of this methodology as well. 

 

In contrast, most personal loan providers in India directly transfer the entire loan amount to your bank account within 48 business hours of approval. One of the biggest advantages of this is the fact that you are at free will to choose between course providers and will never be constrained to only those who have existing tie ups with lending institutions.

 

Related Articles: Avail affordable professional loans to upgrade your career

In Conclusion

As the majority of the working population of the world and in India transition to a partly or fully remote mode of working and simultaneously change career aspirations, the need of the hour is to constantly upskill your abilities. With so many personal and professional loans available in the market these days, you virtually have limitless options to choose from. 

 

Now that you know of the differences between a personal and a professional loan, go ahead and apply for one today.