Who Can Be a Co-Applicant for Study Abroad Loans?
Embarking on an international education journey is a dream for many Indian students. However, securing the necessary funding is a crucial step in this process. While getting an education loan comes up as the most opted solution, many lenders require you to have a co-applicant to secure the loan. At Lorien Finance, we understand the importance of having the right co-applicant for study abroad loans to strengthen your loan application and increase approval chances. The process of selecting a suitable co-applicant can significantly impact your study abroad financing journey. Whether you’re planning to study in the US, UK, Canada, or Australia, understanding who can be a co-applicant and how they affect your loan eligibility is crucial. A co-applicant for your education loan not only shares the responsibility of repayment but also strengthens the loan application by providing additional financial assurance to lenders. Let’s walk you through everything you need to know about co-applicants for study abroad loans, helping you make informed decisions about your education financing. What is a Co-Applicant for Study Abroad Loans? A co-applicant, often referred to as a co-borrower, is an individual who joins you (the primary applicant i.e. the student) in applying for an education loan. They share the responsibility of loan repayment and become legally obligated to repay the loan if the primary borrower fails to do so. For study abroad loans, co-applicants play a crucial role in strengthening the application by adding financial credibility and stability. Including a co-applicant can enhance the credibility of the loan application, potentially leading to better interest rates and higher loan amounts. Most financial institutions and lenders require a co-applicant for international education loans as a form of security, ensuring the loan will be repaid even if unforeseen circumstances arise. Who Can Be a Co-Applicant for Study Abroad Loans? Parents Parents are the most common and preferred co-applicants for study abroad loans. Most financial institutions and lenders prioritise applications where one or both parents serve as co-applicants. This preference stems from the natural financial responsibility parents typically assume for their children’s education. Both parents can jointly apply as co-applicants, which can further strengthen the application. If your parents have stable income sources, good credit scores, and sufficient assets, they make ideal co-applicants for your study abroad loan. Siblings In cases where parents cannot be co-applicants due to age restrictions or financial constraints, siblings can step in. However, for siblings to qualify as co-applicants, they must: Siblings who are well-established professionally can significantly enhance your loan application’s strength. Spouse For married students, spouses often serve as co-applicants for study abroad loans. A working spouse with a good credit history and stable income can be an excellent co-applicant. In fact, having a spouse as a co-applicant can be advantageous as it demonstrates shared financial responsibility and potentially higher combined income. If both you and your spouse are planning to study abroad together, you might want to explore scholarships and financial aid options to complement your education loan. Other Relatives Beyond immediate family members, certain lenders may accept other close relatives as co-applicants for study abroad loans. These may include: When considering relatives as co-applicants, it’s essential to verify the specific policies of your chosen lender, as not all financial institutions accept extended family members as co-applicants. Understanding different types of education loans available can help you identify which lenders might be more flexible with co-applicant requirements. Benefits of Having a Co-applicant Including a co-applicant in your education loan application offers several advantages: Eligibility Criteria for Co-Applicants Age Requirements Most lenders specify age limits for co-applicants. Typically, the co-applicant should be: These age restrictions ensure that the co-applicant is legally able to enter into a financial contract and is likely to remain employed throughout the loan tenure. Income and Employment Stability Co-applicants should demonstrate financial stability through: Lenders evaluate the co-applicant’s income to assess their ability to repay the loan in case the primary borrower defaults. Higher income stability translates to better chances of loan approval. Credit History and Score A co-applicant’s credit history significantly influences the loan application. Lenders prefer co-applicants with: Co-applicants with excellent credit histories can help secure better loan terms, including lower interest rates. Residential Status and Nationality For Indian students seeking study abroad loans: Special Considerations for Who Can Be a Co-Applicant Single Parent Scenarios For students from single-parent households, most lenders accept the single parent as the sole co-applicant. In such cases, the financial assessment focuses entirely on the single parent’s credentials. Some lenders might allow another close relative to join as a second co-applicant to strengthen the application. Self-Sponsored Students Mature students or those with work experience might apply as self-sponsored applicants. However, most lenders still require a co-applicant for international education loans regardless of the student’s financial status. The co-applicant requirement may be relaxed only in exceptional cases where the student has substantial assets or an exceptionally strong financial profile. Government-Backed Loan Schemes Government-sponsored education loan schemes like the Vidya Lakshmi portal may have different co-applicant requirements. These schemes often have more flexible criteria and might accept a wider range of co-applicants or have different eligibility parameters altogether. Comparing Co-Applicant Requirements Across Lenders Different lenders have varying policies regarding who can be a co-applicant for study abroad loans. During our Loan Fest, you’ll get an opportunity to directly compare these requirements across multiple lenders. Here’s a general overview: Traditional Banks NBFCs and Specialised Education Loan Providers International Financial Institutions Study Abroad Loan Fest Why chase lenders individually when they can all come to you? That’s the idea behind Lorien Finance’s Loan Fest – India’s biggest abroad education loan event where you can compare multiple public and private lenders for your study abroad loan. At our Loan Fest, you can secure your loan for your abroad studies at interest rates starting at 3.39%* from 17+ Indian and International lenders. There’s more! You can even enjoy exclusive benefits, including assured gifts worth ₹2,000 on successful loan disbursement and rewards like MacBook, iPhones and study abroad travel kits