In India, there were times when going abroad to study was confined to only a small group of people. But things have changed over the course of several years and more students are beginning to go abroad for education. According to the economic times, each year around 2.5 lakh to 3 lakh Indian students travel abroad for education. Many people in India are eager to fly abroad for quality education and international exposure, but the only thing that hinders their plan is managing expenses.

Expenses are no problem for students with financial strong backgrounds, but they do cause problems for the ones who are not born with a silver spoon. Students who are not fortunate enough to have parents with a great financial background may incur problems in managing their educational expenses. That is when you can begin to look for an education loan. But can a student who does not have financially strong parents get an education loan? That is what we are here to answer, so stay tuned to the article till the end to know the importance of a co-applicant and guide to getting an education loan abroad without parental income.

Importance of a Co-applicant 

A Co-applicant or a Co-borrower or Co-signer is a person the banks will look to contact if you are unavailable. They are liable to pay the loan in case you are not able to pay. Read our article on the eligibility requirements of a co-applicant and understand who can be your co-applicant. Co-applicant is analyzed more than you when applying for an education.

Having a strong financial co-applicant is a very important factor in getting you an education loan. In most cases the Co-applicant for a student is his/her mother or father, but what if the parents of a student are financially not so strong to be a co-applicant? Can a student get an education if his/her parents are financially not strong or don’t file ITR? There are scenarios where you can get an education loan even when you don’t have financially strong parents or if they don’t file ITR. Below we shall see such scenarios. Meanwhile, you can also connect to our financial officer from WeMakeScholars who will guide you through the process of education loan.

How to get an Education Loan abroad without a parental income?

Having a financially strong co-applicant is a great factor for you when you are going for an education loan. Who better than your parents can be your co-applicant? But what if your parents are not eligible to be your co-applicant? Below are certain factors where you can process an education loan even without having financially strong parents or parents who don’t file ITRs. 

Collateralized Loan

When you are going for an education loan with public banks, you will need to have collateral to pledge against your loan except in the case of Vidya loans which offers unsecured loan of up to 7.5 lakhs. Collateralized loans in SBI do not require financially strong co-applicants. They just require a co-applicant whom they can contact when the applicant is not reachable. 

Banks like SBI can consider a person as a co-applicant even if he or she does not file ITR. They can consider the income certificate of a co-applicant as income proof if they don’t have any ITR. Though they cannot submit a single ITR, they must have either at least two ITRs or no ITR. SBI does not have income criteria for the Co-applicant so your parents even with low or no income can be your co-applicant and you can get an education loan.

Interest rate: A collateralized loan from public banks will cost you around 8.75% to 10% interest rate.

Financial Co-applicant

If you are applying for an education loan from private banks or lenders, then you will need to have a strong financial co-applicant. If your parents do not have an income that meets the eligibility requirements of the private banks or lenders or BOB, then you can involve another person who meets the financial requirements of the bank and who is also eligible to be a financial co-applicant. Parents, Spouses, Parents-in-law, or guardians can be considered primary co-applicants in the case of public banks. So even if you have a financial co-applicant you will need to have a primary co-applicant according to the requirement.

In private banks and lenders, you can have the same person as the financial and the primary co-applicant, but in the case of public banks, you can have the same person as the financial and primary co-applicant only if it meets the requirement of both. Below is the table to show, who you can select as a financial co-applicant according to the type of bank or lender you are going to.

Interest rate: The current interest for private banks or lenders is around 10.5% to 13%.

Self-Co-applicant

Your parents are not financially strong, you do not have collateral to pledge and you do not have a strong financial co-applicant, can you still get an education loan? Yes, you can. Even after lacking in all these factors, you can get an education loan!

If you have a work experience of 3 years or more and you are going to A1 or A2 university for a PG program and your income is more than 35k per month, then you can get an education loan. In this case, you will have to deposit an FD of moratorium period interest and you won’t need another financial co-applicant. You can consider yourself as self co-applicant for the loan. Though you will need to provide a primary co-applicant who can be contacted in case you are not available.

Interest rate: The current interest rate to go to A1or A2 universities is 11%.

This article proves that you can get an educational loan even without parental income. So people who were hesitant to apply for an education loan as they did not have parental income, can now take a sigh of relief and then click on this link to Request a callback from our team and get started for the process of an education loan. Wemakescholars team will connect you to a suitable public or private lenders according to your profile and will also give you negotiation support to get you the best deals for an education loan. So, think no more. Connect to us and get started with the process of your education loan.