Gone are the days when students utilised their family’s savings to finance their higher education. Nowadays, they prefer financing their education independently and earning a self-made badge by taking an education loan. An education loan will help you finance your higher studies as it covers tuition fees, study material costs, cost of living, and other education-related expenses. So, if you want to know more about education loans, like benefits, the role of a co-applicant in education loans, and so on, this guide is for you.
Why should you opt for an education loan?
An education loan is a fantastic choice as it allows you to finance your higher education independently. Moreover, a study loan is the first debt of a student, and therefore, responsibly repaying it helps build a robust credit score. Please remember that when you apply for a student loan, lenders will require a co-applicant.
What does a co-applicant mean in an education loan?
A co-applicant is a co-borrower that signs the education loan application and loan agreement with the primary loan applicant. Co-applicant is necessary for an education loan as the financial lender will turn to them if the primary applicant fails to repay it in case of unforeseen circumstances. Co-applicant is also known as a co-signer.
Eligibility criteria of a co-applicant for an education loan
Most financiers will need a co-applicant to process the education loan. When you apply for a student loan, you have to keep in mind the general as well as the specific criteria.
Basic eligibility criteria
In addition to the basic criteria, lenders also consider other factors while evaluating the profile of a co-applicant. These factors are:
For salaried: The lending institutions will evaluate the financial background of a co-applicant in an education loan. Therefore, if the co-applicant is salaried, submission of salary slips for the last 6-8 months as income proof is mandatory.
For self-employed: If the co-signer runs a business, submitting the prescribed documents, such as income proof, is necessary. Here is the list of some important documents:
Apply FAQ Schema
Q.1 Can a co-applicant of an education loan take another loan?
Ans. Yes, a co-applicant can take another loan, such as a car or home loan, if they are financially sound.
Q.2. Can I get an education loan without a primary co-applicant?
Ans. A primary co-applicant is the person who shares the responsibility of repaying the loan in due time in case the applicant fails to do so. Therefore, it is mandatory to have a primary co-applicant to get an education loan.
At Avanse Financial Services, we prioritise the student’s employability potential over the co-applicant’s financial background. Therefore, we check academic scores, entrance exam scores, the pedigree of the university, and other relevant aspects to determine the employability score of the student. The co-borrower’s financial background is assessed as a part of the process.
So, if you are interested in pursuing your higher studies by availing student loan for education
We always aim to offer you competitive interest rates on your Avanse Education loan.
The rate of interest on your loan is calculated as: Interest Rate = Avanse Base Rate + Spread.
Our current Base Rate is 14.25% (WEF 01.05.2023).
The Spread is floating and is based on analysis of overall credit and course profiling.
This rate is subject to the terms and conditions of Avanse Financial Services Ltd.