Who Can Be Co Borrower For Education Loan?

05.01.2023 Grady A. Lowry 0 Comments

Financial Co-applicant: A financial co-applicant is a person who is related to the loan applicants by blood. He/she can be first cousins, siblings, paternal uncle or aunt and maternal uncle or aunt.
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Contents

0.1 What is a co-borrower on a student loan?
0.2 Who can be your co applicant?
0.3 Does it matter who is listed as co-borrower?
- 0.3.1 Who can be a guarantor for a education loan in India?
0.4 Can my sister be a co-borrower for education loan?

1 Can my girlfriend be a co-borrower?
2 Can a non relative be a co-borrower?
3 Is co-borrower also co owner?
4 How do I remove a co-borrower from my student loan?

What is a co-borrower on a student loan?

Characteristics of a good co-borrower – First and foremost, a co-borrower needs to have established – and good – credit. They also will need proof of a stable income, and a low amount of debt. Specific criteria, including credit union membership requirements, vary by credit union.
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Who can be your co applicant?

Father and son – Father and son are eligible for a joint home loan and can include their incomes for determining the home loan eligibility. Besides, the father can also co-own the property if he has only one son. In case there are two or more sons, the father can only be a co-applicant but cannot share the ownership rights as upon his demise, the share of his property succeeds to all his sons, which may cause disputes.
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Does it matter who is listed as co-borrower?

Does it matter who’s the borrower and who’s the co-borrower? – Since the borrower and co-borrower are equally responsible for the mortgage payments and both may have claim to the property, the simple answer is that it likely doesn’t matter. In most cases, a co-borrower is simply someone who appears on the loan documents in addition to the borrower.
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Who can be a guarantor for a education loan in India?

Q1. What is an Education Loan? – Education loans are offered by banks to students to enable them to pay for higher studies such as graduation and post graduation courses, both in India and overseas. Apart from the tuition fees, other aspects of expenses such as hostel charges, equipment purchases and other course related expenses may also be covered by the education loan.

In case of overseas studies, many education loan providers include the price of a return ticket into the education loan corpus.
As most students have no previous credit history, the parent or guardian has to co-sign for an education loan as a guarantor.
Moreover, education loans also require key lender approved collateral such as property documents, fixed deposits, etc.

Though there is an interest free (moratorium period) for an education loan, if you service the interest accrued on an education loan during the period, you may receive a further discount on the education loan. Q2. Who is eligible for an education loan? Every bank has its own eligibility criteria for dispensing education loans, but a few common parameters are:

Applicant should be an Indian national.Applicant should have confirmed admission in a college/educational institution at the time the loan application is made.Applicant should be in the age bracket 16–35 years.The Applicant should have a co-borrower such as a parent who acts as guarantor for the loanCollateral in the form of a fixed deposit etc. is required for loan amounts higher than Rs.4 lakhs.

Q3. What documents does the lending bank ask for? Documents that are to be submitted with the education loan application include:

Admission confirmation letters and papers validating any scholarships the applicant has qualified for.Schedule of expenses for the course including tuition fees and other expenses.Score sheet of qualifying test(s).Copies of foreign exchange permit/student visa for overseas studies.Bank account statements for last 6 months. (Can be a joint account with parent/guardian)Statement of assets and liabilities of borrower.Proof of ageProof of residence2 passport size photographsDocuments related to collateral required for education loans exceeding Rs.4 lakhs.

Q4. What are the courses for which an education loan can be availed? Education loan can be availed for all courses recognized by the UGC in case of India and all regular courses abroad. Each lender has its own list of educational institutions and courses that they would provide a loan for whether overseas or within India.

Tuition fees and hostel expensesExam, library, and lab fees if applicableAny refundable caution deposits paid to the educational instituteCost of books, uniforms, and other essentials for completion of courseTravel expenses (return fare for international flights.

Q6. Is a co-applicant for education loan needed? Yes, for all full-time courses a co applicant is required. The co-applicant can be Parent/Guardian or Spouse (if-married). Q7. Who can be my co-borrowers? Your parents/ guardian can be a co-borrower as well as spouse in case of a married applicant.

The co-borrower should have a steady source of income and a good credit history in order to improve the applicant’s chances of a successful loan application. Q8. Is there a maximum limit on an education loan that a lender can disburse? Most lenders have a maximum limit of Rs 10 lakhs to Rs 15 lakhs for studies within India, while the maximum limit on education loans for overseas studies is between Rs 20 lakhs to Rs30 lakhs.

In case of some lenders, the applicant can get a higher loan amount sanctioned provided bank-accepted collateral is provided. Q9. What is the tenure of an education loan? The average tenure for an education loan is between 5-7 years in case of most lenders.

However, some lenders can offer a longer tenure of up to 15 years in case of higher loan amounts. Q10. What is the maximum loan amount one can get for overseas studies? Banks generally fund up to 90% of the education expenses as loan and some even provide loans for 100% of education expense. However, the exact loan amount an applicant is eligible for depends on a range of factors including the monthly earning of the parent/legal guardian, the value of collateral provided, the academic record of the applicant and other factors.

Q11. Is there a margin on education loans? Most education loan providers do not charge a margin on education loans equal to or less than Rs.4 lakhs. For higher loan amounts of up to 7.5 lakhs, banks and NBFCs have a margin of around 5% i.e. they provide loan amount equal to 95% of the course cost and the rest must be borne by the applicant.

For loans up to Rs.4 lakh – No collateral or Third Party Guarantee is required.For loans from Rs.4 lakh to Rs.7.5 lakh – Collateral is not needed but third-party guarantee is requiredFor loans above Rs.7.5 lakh – Collateral is required. Some of the key types of collateral accepted by banks include LIC/NSC/KVP, Fixed Deposit held with the lender, property documents owned by the applicant or co-signor.

Q13. Is the loan disbursed in favour of the borrower or the institute/college/university? The tuition and hostel fees are disbursed directly to the institute as per their schedule and fee structure usually in the form of a draft. Other components of the loan such as course-related expenses for lab equipment, laptop computer, uniform, travel expenses etc.

May be claimed by and provided to the loan applicant. Q14.
What is employment verification in an education loan? Some banks perform independent verification of the employment records of the loan cosigner, which typically include parent/guardian or spouse (if married) of the student who is applying for the education loan.

In case the details provided cannot be verified, the loan application may be rejected by the prospective lender. Q15. What is a holiday/interest free/moratorium period? What if there is a break in the study? Each student is given some time by the bank before the repayment tenure starts.

This is the time granted by the lender before the repayment begins is referred to as the holiday period.
It is usually either 6 months to 1 year after the successful completion of the course, or the time it takes the borrower to start working at a job, whichever is earlier.
If there is a break in the course or the borrower chooses a sabbatical, it is entirely up to lending bank’s discretion on whether to add a few months to the holiday period.

Q16. Do education loans have any Income Tax benefits? Loan borrowers can avail tax benefits on interest paid on education loan under Sec 80E of the Income Tax Act. This benefit is available over and above the Rs.150,000 deduction allowed under Section 80C,

Tax benefits can be availed once the borrower starts paying the interest on the education loan.
Further, the deduction is available until the borrower pays off the full interest amount on the loan or for a maximum period of 8 years, whichever is earlier. Q17.
Is there a prepayment penalty on education loan? Most banks do not levy prepayment penalty on education loan.

However, it is best to check with the bank before signing the dotted line. Q18. Is it necessary to have an account with the bank to avail of an educational loan? Earlier, having an account in the bank from where the borrower was hoping to get a loan used to be an important criterion.

Now it is no longer a mandatory requirement. If you have an account with the particular bank, it usually becomes easier to get the loan sanctioned. This is because of your prior relationship with the bank, your past financial records and transactions can be analysed faster to make a decision. Q19. Can a student avail another loan for further studies? When will the repayment of the new loan commence? Yes, this is possible.

You can borrow a loan for a bachelor’s degree followed by one for master’s without repaying the first loan. This loan can be taken as a top-up loan against the already existing loan; however, it is subject to the lending bank’s discretion and the internal rules and regulations of the lender.

It will commence as per the new holiday period, which will take effect once the student has joined a new course. Q20. Do banks offer an education loan in foreign exchange? I need to pay in dollars for my studies, but the bank is in India. The loan availed by the student is paid to the educational institution directly in the local currency (Dollar/Pounds/Euro etc.).

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The lender may charge an additional currency conversion fee as per RBI regulations on the loan amount disbursed. Q21. Is any incentive available for a girl student applying for education loan? Banks generally provide a 0.5% concession on the applicable education loan interest rate to girl students pursuing higher education in India and abroad.

Q22. Are there any special privileges for students in the Scheduled Caste/Scheduled Tribe (SC/ST) category who avail education loans? Yes, eligibility criteria and loan margins on education loan are relaxed for Scheduled Caste/Scheduled Tribe students availing education loans in India. The eligibility criteria are lowered from first/second class to pass class for SC/ST category students seeking education loan for graduate and post graduate studies, while, margin money is sometimes lowered than the regular percentage or nil.

Q23. Do banks consider education loan requests from NRIs? Requests received from NRIs can be considered if:

Student is an Indian passport holder and meets all the eligibility requirementsDocuments such as security or any collateral which is enforceable in India can be handed over to the bank.

Q24. Why do banks require an insurance policy? Banks usually prefer that students avail a life insurance policy equivalent to, or more than, the loan amount. The policy acts as a security feature and forms a part of the collateral. In case of the untimely demise of the borrower, the bank recovers the outstanding loan amount from the student’s life insurance policy and the remaining amount, if any, is paid out to the beneficiary of the policy.

Q25. Is credit score important in case of education loan? A majority of students applying for an education loan do not have previous credit history such as other loans or credit cards. Thus, education loan specialized lenders have a specialized credit scoring model that scores education loan application based on the University, College and the Course of admission.

They factor the academic background of the student as well as the credit history of the co-borrower into their decision.
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Can my sister be a co-borrower for education loan?

A co-applicant can be any of the following relative of the applicant, viz Father / Mother / Brother / Sister (married) /Spouse whose income is considered while determining the loan’s eligibility.
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Can my girlfriend be a co-borrower?

Buying a house with a boyfriend or girlfriend FAQ – Should I buy a house with my boyfriend before marriage? Whether or not you should buy a house with your boyfriend, or buy a house with your girlfriend, varies based on your unique situation. Of course, you’ll both need to be in this partnership for the long term.

But beyond that, you both need to be willing to work together to navigate the complex home buying process.
As a first-time homebuyer, there is a bit of a learning curve to master.
It could be a good idea if you are both ready to jump into this challenge.
But if either partner is on the fence about it, then the financial and emotional stress that comes with buying a house might not be worth it.

What are the risks of buying a house with your significant other before marriage? The reason that many couples wait until marriage to pursue homeownership is the legal risks tied to buying a house without that marriage certificate in hand. When married, there are certain legal protections in place to keep both of your interests safe if a breakup were to happen.

Without a marriage certificate, there are many loopholes for an ex to exploit when deciding what to do with the house.
In addition to the legal risks, there are emotional risks.
Buying a home is a big financial step, but it is also a major life marker.
If a breakup happens, the emotional fallout of dividing up the house would be traumatic.

Can an unmarried couple buy a house together? Yes, an unmarried couple can buy a house together. But it is important to weigh the risks and rewards before moving forward. Can I buy a house with my boyfriend? Yes, you can absolutely buy a house with your boyfriend.

It’s completely legal to buy a home with someone other than a spouse. Is it smart to buy a house with a boyfriend or girlfriend? Whether or not it is smart to buy a house with a boyfriend or girlfriend depends on your unique situation. The reality is that tying up your financial assets with someone else before marriage can make things complicated quickly.

If you and your partner are ready for that big step, then it can be a smart idea. But if either of you isn’t quite ready for this major step, then it is probably smart to hold off on this major purchase for now. How do I protect myself when buying a house with a partner? If you want to protect yourself financially when buying a house with a partner, the first step is to decide how the title will be held.

The options include sole ownership, joint tenancy, tenants in common, or a living trust.
In most cases, a joint tenancy or tenants in common agreement will protect your interests.
But it is a good idea to speak to a real estate attorney to ensure that everything is above board.
Is it better to buy a house alone or with a partner? Buying a house with a partner can improve your approval chances for a mortgage.

That’s because two incomes often lead to more buying power. But if you are unsure about the future of your relationship, then buying a house alone is likely the better option. Can you get a joint mortgage without being married? Yes, you can get a joint mortgage without being married.

Any manner of co-borrowers can choose to apply for a mortgage together.
Can I get a joint mortgage with my girlfriend or boyfriend? Yes, you can get a joint mortgage with your girlfriend or boyfriend.
When applying together, it is possible that the combined incomes will improve your approval chances.
What happens if one of us is not on the mortgage? If your name is not on the mortgage or the title to the home, then you are not the legal owner.

Although you may be contributing to the homeownership expenses, the titleholder is the official owner of the home. With that, the mortgage holder will keep the home if things go south. Can I add my partner’s name to the mortgage after buying the house? Most lenders will require a refinance if you want to add your partner’s name to the home loan after buying a house.

However, you can generally add a partner’s name to the title itself through a QuitClaim deed.
How will buying a house together before marriage impact your taxes? As a homeowner, you can deduct mortgage interest from your taxes on up to $750,000 in mortgage debt.
If you buy a home before marriage, only one of the homeowners can claim this expense.

With that, one of you will not be able to take advantage of this tax break offered to homeowners. How do I buy a house with my boyfriend or girlfriend if they have worse credit? If your partner has bad credit, it might be a smart move to apply for the mortgage on your own.

A good credit score can unlock better mortgage rates which could lead to thousands saved over the life of your loan. But if your boyfriend or girlfriend has a higher income with worse credit, it may be worth applying together anyways. Although the interest rates you get as a couple could be a bit higher, the increased income can help to increase your buying power.

Check your home buying eligibility here (Dec 12th, 2022)
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Can a housewife be co-applicant?

‘ A co-applicant in a home loan application is usually a spouse, brother, father or mother.
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Can housewife become co-applicant?

Spouses: A husband and wife can be co-applicants even if they are not co-owners of the property.
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Can I be co-applicant with mother?

Mother and son – A son and mother can be co-applicants for a home loan in the absence of the father. Besides, they can also be joint owners of the property.
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Can a non relative be a co-borrower?

For Pag-IBIG Housing Loan – According to Bangko Sentral ng Pilipinas or BSP, a co-maker or co-borrower is a “someone who, by contract, undertakes to pay another person’s (primary borrower’s) debt if that person fails to do so.” In Pag-IBIG Housing Loan, it doesn’t matter whether the co-borrowers or co-makers are related or not as long as they are within the second degree of consanguinity or affinity,

People who are connected to you in the second degree of consanguinity are those who are related to you by blood. Among these members are your parents, children, siblings, grandparents, and grandchildren, Your spouse and in-laws, on the other hand, are included in the second degree of affinity. Pag IBIG permits a home loan to be shared by up to three persons (including the primary borrower).

A tacked loan is a term used to describe a mortgage that is shared by many borrowers. Both the primary borrower and any co-borrowers will be assessed by Pag IBIG to ensure that they fulfill all eligibility conditions, including the gross monthly income that is important in assessing one’s ability to pay.
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Can you be a co-borrower without a job?

How to Get a Loan Without a Job You may be able to get a personal loan with no job via a cosigner, co-borrower or another form of financing. Written by / September 22, 2022

A cosigner or co-borrower can help you qualify for a loan without a job.
However, keep in mind that co-applicants will need income and good credit to qualify.
Other financing options include credit cards, family loans, peer-to-peer loans and home equity loans.
There are lenders that don’t verify income, but those can be dangerous and expensive.

The difficult thing about personal loans is that, often, when you need them most, you may find it difficult to qualify. That can be especially true if you’re currently unemployed. But there is a method you can use to qualify in that circumstance. Here’s what you should know about qualifying for a personal loan without a job, what your options are, and what to avoid.

You can get a personal loan without a job—but you’ll need to have someone in your life who is willing to help you out. For those without a source of income, that means getting a co-signer. “A co-signer can help those without income —it could even improve the interest rate if the cosigner has good credit,” says Markia Brown, a certified financial education instructor at, a company that provides budgeting and credit coaching.

In one step up from a cosigner, you could jointly borrow a personal loan with a co-applicant who has dependable income and is creditworthy overall. Some but not all reputable lenders allow co-borrowers who share equal responsibility for repayment. Unlike a cosigner, a co-borrower has direct access to loan funds. To calculate a DTI ratio, lenders look at monthly debt payments compared to earnings. So, if your cosigner or co-applicant pays $500 a month toward existing debt and earns $5,000 a month, their DTI ratio would be a sterling 10%. All that said, it’s important to understand what a cosigner or co-borrower’s role is in the process.

Not only would they be putting their name on your application, they’d also be on the hook for payments if you stop making them (in the case of a cosigner) or in general (co-borrower). And that loan would be added to their credit profile as if they took it out for only their use. So, asking someone to cosign a loan isn’t the same as asking for a quick favor—it’s asking them to make a financial commitment and trust that you’re going to hold up your end of the deal.

When Sound Dollar reviewed 15 in mid-2022, eight of them offered the ability to borrow alongside a co-applicant. Below were the best overall lenders, according to our research. Best for debt consolidation If you don’t have access to a cosigner or co-borrower and you don’t have a job, you may not be able to qualify for a personal loan. Still, there are alternatives. Here’s how those options work:

Secured loan: A debt that’s secured by an asset, such as your car or cash. But be aware that, should you be unable to pay down a, you could lose that asset.
Line of credit: A loan that functions like a credit card, allowing you to take out money (up to a credit limit) at any time.
Credit card: Revolving debt that charges interest for balances that go beyond the billing cycle.
Peer-to-peer loan: A loan between individuals, or a business and individual. Banks are not involved.
Home equity loan: A loan taken out against your home’s equity.
Borrow from family: While a family member or friend might not cosign a personal loan, they may be able to support you with a smaller loan that won’t impact your credit or theirs.

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There are also loans that don’t require income verification. However, those can be risky, carrying predatory interest rates and fees (more on that below). If you’ve been researching personal loans, you probably know that there are options out there that don’t require proof of income.

And if you’re thinking, what’s the catch? You’re on the right track.
Those loans can prove dangerous.
Consumers should be wary of lenders that don’t require proof of income because they tend to have higher interest rates,” says Brown.
Predatory lenders don’t care where the money will come from as long as the consumer pays.” There could also be steep fees and shorter repayment terms (sometimes weeks or months) for these types of loans.

And, if you aren’t able to make those payments when the bills come due, it could be harmful to your finances long-term. Your timeline will dictate how much you may be able to as you shop around for a loan. And, in general, the longer your timeline, the better your chances.

Start a side hustle: This is a high-effort idea, but if you can leverage your existing skills, you may be able to start a successful venture.
Find part-time employment: If you’re reading this, you’re probably actively searching for a new form of employment. But it’s worth noting that part-time jobs can be helpful in at least partially protecting your finances during this time of transition.
Sell items for profit: One-off sales of your own stuff can help support you, but so can selling items as a business. (Consider starting an Etsy, eBay, or Facebook Marketplace online shop.)

Also, keep in mind: While getting a full-time job would certainly help your chances of qualifying for a personal loan, it’s not the only way to go. If you can prove consistent income—and positive cash flow—as a side hustler or part-time worker, that could be enough.

It might make the application process more complicated, as you may not have simple pay stubs to share, but you could still get a loan without a job as we traditionally consider it. What’s the best way to get a loan without a job? If you can team up, a cosigner or co-borrower with excellent credit can help you qualify for a loan even if you don’t have sources of income.

What if I’m a freelance or contract worker? “When contract and freelance workers apply for loans, lenders usually ask for more documents verifying your income, like tax returns,” says Brown, the certified financial educator. “They need to know that even though how much and how often you’re paid varies, you’ll be able to afford this loan.” Can assets make up for income if you’re applying for a loan? You may be able to use investment interest or dividends.

Anna Baluch, “What Credit Score Does a Cosigner Need?,” Experian.com, Dec.12, 2019, https://www.experian.com/blogs/ask-experian/what-credit-score-does-a-cosigner-need/.
“Getting A Personal Loan With A Cosigner,” RocketLoans.com, Oct.16, 2021, https://www.rocketloans.com/learn/personal-loan-basics/personal-loan-with-cosigner.
“Line of Credit: A Guide,” Capital One, Aug.3, 2022, https://www.capitalone.com/learn-grow/money-management/line-of-credit/.
“Peer-to-Peer Lending,” Corporate Finance Institute, Feb.13, 2020, https://corporatefinanceinstitute.com/resources/knowledge/finance/peer-to-peer-lending/.
“What is a home equity loan and how does it work?” Chase, https://www.chase.com/personal/mortgage/education/financing-a-home/what-is-a-home-equity-loan.
Brian O’Connell, “What Is a Secured Loan?” Experian, Apr.30, 2018, https://www.experian.com/blogs/ask-experian/what-is-a-secured-loan/.
Kelly Boyer Sagert, “No-Income-Verification Personal Loan Need-to-Knows,” Lantern by SoFi, Aug.17, 2022, https://lanterncredit.com/personal-loans/no-income-verification-personal-loan.
“Applying for a Loan When You’re Unemployed?” Capital One, July 27, 2020, https://www.capitalone.com/learn-grow/money-management/personal-loan-with-no-job/.

Product Review November 12, 2022 Personal loans can help you pay off a major expense or build credit, but shopping around is critical. After all, not all personal loans are created equal. Guide October 6, 2022 It could be a good option for creditworthy borrowers who don’t like the risk of posting collateral via a secured loan.

Advice October 6, 2022 It’s possible to borrow with less-than-stellar credit, but whether you should is another question altogether.
Guide October 5, 2022 The annual percentage rate of a loan helps you make apples-to-apples comparisons of a product’s interest rate and fees.
Guide October 5, 2022 Your choice of financing option might depend on whether you have fixed or variable expenses to cover.

Advice October 3, 2022 If you need to borrow a relatively small amount of money—say, $5,000 to consolidate credit card debt—there are a few routes you can take. : How to Get a Loan Without a Job
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What is the difference between co-applicant and co-borrower?

Who is a Co-borrower? – A co-borrower is a person who takes a joint loan along with the primary borrower. S/he is liable to share the responsibility of loan repayment equally. A co-borrower can only enjoy the tax benefits if s/he is a co-owner of the property as well. If you are asking someone to be a co-borrower, make sure you keep in mind the below-mentioned points:

The co-borrower should be a spouse or an immediate relativeThe co-borrower cannot be a minorIf there is a payment default or death of the primary borrower, all the repayment obligations of the home loan fall on the co-borrowerThe co-borrower must have a regular and consistent income source to pay the home loan

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Can my mother be a co borrower for education loan?

Co-Applicant for Various Study Overseas Destinations – Majority of the financial institutions prefer students, parents, grandparents or first blood relatives as a co-applicant for education loan in India for study abroad. However, there are some exceptions.

Read on to know! • Australia: According to the Australian Embassy, the co-applicant for an overseas education loan can be parents, siblings, grandparents.
But if in case the collateral property is jointly held by other family members too then maternal and paternal grandparents are also accepted for an overseas education loan application.

• United Kingdom: For United Kingdom, the UK Embassy strictly accepts only students or the parents as a co-applicant for an overseas education loan. • United States of America: The USA Embassy does not have any specific criteria for the co-applicant. The co-applicant can be anyone right from blood relatives, cousins to family friends.

The only requirement is that he/she must fulfil the financial eligibility criteria for the co-applicant. • Canada: When it comes to Canada, the embassy accepts first blood relatives and family members as a co-applicant, provided they should meet the financial eligibility criteria. • Ireland: The Irish Embassy is also quite flexible with the co-applicant.

It says that as far as the person is fulfilling the financial criteria, he/she is suitable to become a co-applicant. • New Zealand: The New Zealand Embassy states that only parents, siblings and grandparents can become co-applicant in an overseas education loan.
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Can I get education loan without co-applicant?

What are the available choices for students not having a coapplicant/cosigner? – Education loans for studying abroad come with a lot of baggage since the loan amount is considerably high for foreign universities. The rate of education loans is also highly dependent on the type of loan, loan amount, credit history, and a plethora of other factors.

Earlier, there used to be a tedious process for the approval of even secured loans, but now the process has eased. If a student is eligible for an education loan, Many global and domestic players in the field grant the loan in the shortest possible time. Now there are EMI calculators, Estimate Future earning, University Comparison tools, etc., to know the chances of loan approval beforehand.

There are international financial institutions like MPOWER Financing, Lendwise, Prodigy Finance, etc., that will provide you with education loans without collateral or cosigner. However, the norms are different when compared with public sector banks or private sector banks.

The rate of interest is usually high.
The high rate of interest usually gets reflected when calculated with USD than INR.
Even a slight change in interest rate can make a big difference in interest amount, and it can make a significant impact on the financial condition of the students.
So, it’s always advised to compare the interest rates of one lender with another to get the maximum loan amount at the most reasonable prices.

There is no dearth of financial institutions working in this field. Here are the comparative rate charts of different financial institutions working in this sphere for a holistic analysis of the lending process’s prevailing rates and other aspects. Loans Provided by Prodigy Finance

Features	Details
Collateral/Co-applicant	Not Required
Annual Percentage Rate	Ranges from 6.7% to 11%. The average is 8.4%. The exact rate is linked to a benchmark rate (US 3 month LIBOR) and depends on your profile. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the loan
Admin Fee	~2.5 % to 4% of the loan amount. Not required to be paid upfront. Added to the total loan amount.
Repayment	Starts after six months of course completion. No repayment during the moratorium period
Prepayment Penalty	Nil
Repayment Tenure	7, 10, 15, or 20 years

Loans Provided by MPOWER Financing

Features	Details
Loan Amount	Up to USD 50,000
Rate of Interest	For Graduate Courses- 11.99% (APR – 12.94 percent) For Undergraduate Courses- 13.99% (APR – 14.98 percent) 0.50% discount will be offered if the students opt for the EMI autopay method.0.50% discount will be offered on six consecutive autopay payments.0.50% discount on presenting graduation and proof of employment.
Margin Money	Nil
Repayment Tenure	Up to 10 Years
Collateral Required	Nil

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Can I get education loan without guarantor?

Several banks offer education loans without needing collateral or security for loans up to a specific amount. Students who might not have the resources to present such collateral will benefit from this.
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Can a friend become guarantor for education loan?

Highlights –

Why is a guarantor needed for an education loan?Read the post and know about the same in detail.

Yes, you might need a guarantor for an education loan. If your loan amount exceeds the INR 4 lakh limit, you may be asked to provide a security to the borrowed loan amount by adding a guarantor to it. The guarantor will help you borrow a high loan amount, and his credit history or income will get you an attractive rate of interest.

The loan aims to provide financial stability to the student so they can pursue their higher studies without any hassle. The requirement of guarantor may vary based on your lender as well. Read the post and know the importance of a guarantor for an education loan. Prevents Education Loan from Becoming an NPA When the Student Defaults The guarantor for an education loan is not only a witness who attests the authenticity but they also guarantee that students will pay the loan.

A guarantor in effect also backs the borrower financially and guarantees that the loan will be paid back in case you default on payment. Banks wait for a few months before issuing a notice to the guarantor about the default payment. From the bank’s perspective, the guarantor for an education loan is treated the same as the primary borrower.

Hence, it is the responsibility of the guarantor to pay the loan in full.
In case the guarantor doesn’t pay the loan, the bank treats it as wilful defaulter as the student.
Impact on the CIBIL Score Banks don’t discriminate between the guarantor and borrower in case the default happens on the payment of the education loan.

This impacts both the guarantor’s and student’s CIBIL score, If you become a loan guarantor, you should know its effect on your credit score. You can be a guarantor in an education loan to help your friend or family to meet the loan eligibility. This means the non-payment of the student loan can lower your CIBIL score whether you are the original borrower or not.

Most guarantors do not realise this when they appear as a guarantor for an education loan.
Free CIBIL Score Check What to Know Before You Become a Guarantor? No credit information is hidden from banks as they can access your credit report from CIBIL,
With such increased transparency of your credit information, it is advised not to become a guarantor unless you know the person well enough and whether the borrower is capable of paying the loan or not.

If you are ready to become a guarantor for an education loan, check which college the student has been selected for admission. Because it is easier for an IIM, IIT, B.Ed graduate to pay up the loan as there are more job prospects in future after the course completion compared to someone who secured admission to a low ranked institute.

Becoming a guarantor for an education loan may impact your capability to borrow a loan.
For example, if you have a loan of INR 30 lakh for yourself and become guarantor for another INR 20 lakh, this may have bearing on the amount you borrow in future.
Documents for the Guarantor To be a guarantor for an education loan, you need to provide a few documents that verify your identity and income details.

Have a look at the documents you’ll need when you apply as a guarantor for an education loan. ID Proof:

Aadhaar CardPAN CardVoter ID CardPassportDriving Licence

Income Proof:

Salary Slip/CertificateITR ReportTDS CertificateBank statementForm 16

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Can I take education loan for my friend?

Education loans are basically a form of monetary assistance availed by students to meet the expenses associated with their studies. Education loans can be taken by means of funding, scholarships, financing and rewards, and are granted in cash, which has to be repaid to the lender along with a rate of interest.

Students who wish to avail education loans are advised to borrow based on their needs as the repayment periods for these loans can vary to a great extent depending upon the lender and the amount borrowed by the student. Most of the student loans available to individuals in India are granted at a relatively low rate of interest, and interest payments need not be made immediately.

Students are usually granted a period of time before from the time they take the loan to the time they start making repayments. Education loans are unsecured loans that can be used to cover expenses related to education, such as tuition fees, books, living expenses and other such expenses as transportation costs, etc.
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Does a co-borrower need good credit?

How a Co-borrower Loan Works – Let’s say you and your spouse want to buy a house together. You both want an equal claim on the property and equal responsibility for the mortgage. When you apply for the mortgage, you are listed as co-borrowers. In this case, the lender will examine both of your incomes, credit scores, assets and other debts to qualify your application.

Often, having two incomes will help you qualify for a higher loan limit or better terms.
If you or your spouse has a low qualifying credit score or a high (DTI) ratio, you may receive a higher interest rate than if you applied individually.
Three primary credit bureaus—Experian, Equifax and TransUnion— produce credit reports that help determine your credit score; the two main scores are FICO and VantageScore.

In the case of a joint application, lenders use both applicants’ scores but typically rely more heavily on the lower average of the two scores to determine the terms. This is why a co-borrower with low qualifying credit scores can harm your application.
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Can a co-borrower hurt you?

Co-Borrower –

Lenders generally consider both borrowers’ incomes when applying for a loan. Lenders typically establish loan rates using the lowest median credit score of both applicants. This means you might qualify for a better rate as a co-borrower than you would if you applied independently. Since co-borrowers are both liable for the debt, any past-due payments have the potential to hurt both parties’ credit scores. Then again, on-time payments can help boost both borrowers’ credit scores. Most often, a co-borrower will have shared ownership of the funds or asset purchased with the loan.

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Is co-borrower also co owner?

Home Loan Process: Difference between Co-Owner, Co-Borrower, Co-Applicant, and Co-Signer Co-borrower In a home loan, a co-owner refers to any individual, who along with the primary borrower, plays a critical role in accepting responsibility for repaying the debt in case the primary borrower fails to pay.

A co-borrower applies for a loan along with the primary borrower and both bear the legal responsibility of repayment. Co-owner A Co-owner is an individual that has a legal share in the property along with the primary borrower. Most of the banks and financial institutions or housing finance companies insist on the co-owners to become co-borrowers along with the main borrower.

Hence, all co-owners are necessarily co-applicants in the home loan application, along with the main borrower, but all the co-applicants may not be the co-owners of the property. When applying for a home loan as a co-borrower and co-owner, remember:

They cannot be a minor.They must be a married couple or can be an immediate relative.They must have a consistent source of income.On death or payment default by the primary borrower, the co-borrower and co-owner become responsible for the repayment of the home loan.

Co-applicant A co-applicant refers to a person who applies along with the primary loan applicant. This is done so that their income can be used to supplement the borrower’s income and increase his/her eligibility for a loan. A co-applicant is equally liable for loan repayment in the case of non-payment or the event of the death of the primary borrower.

Only a few specified relations can be added as co-applicants in a home loan i.e. Brother-brother, father-son, mother-son, husband-wife, etc. Co-signer A co-signer signs the home loan application along with the primary borrower, mainly when the main borrower does not have a good credit score. A co-signer neither has any right, title, or interest in the property for which the loan is being used for nor he/she is entitled to the right to use the loan amount.

A co-signer helps the applicant to get approved for a loan easily. : Home Loan Process: Difference between Co-Owner, Co-Borrower, Co-Applicant, and Co-Signer
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What is the difference between cosigner and co-borrower?

Co-borrowers and cosigners are both responsible for repaying a loan, but a co-borrower has shared ownership of the funds or asset, while a cosigner doesn’t. Choosing one option over the other comes down to whether you need access to the loan funds, your goals for helping out on the loan and weighing the pros and cons.
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What happens if you are a co-borrower?

A co-borrower is a person who applies for and shares liability of a loan with another borrower. Under these circumstances, both borrowers are responsible for repayment. Generally, they also share title in the home or other asset that the loan is for.
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Can a co-borrower hurt you?

Co-Borrower –

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How do I remove a co-borrower from my student loan?

Apply to release your cosigner. You can apply to release your cosigner from an open and active loan after you graduate or complete your certificate, make 12 on-time principal and interest payments, and meet certain credit requirements.
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Grady A. Lowry