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International student loanWhat is the loan approval process when you don’t have a cosigner? s without cosigners break the conventional norms of education loan lending. While banks and Non-Banking Financial Companies (NBFCs) in India mandate collateral or cosigner even for a loan amount of INR 50,000, international lenders funds up to INR 75 Lakhs to students without these two.
Education loans without collateral or co-applicant depend majorly on the target college, country, and student’s past academic records. In this blog, we will traverse through the features and options of study loans without a cosigner.
There are international financial institutions like MPOWER Financing and Prodigy Finance that will provide you with education loans without collateral or cosigner. The norms for international lenders are different when compared with public sector banks or private sector banks.
The rate of interest is usually high as it is calculated in USD and gets converted to 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. You can use the EMI calculator to see the monthly repayment for the loan amount you need and see whether it is affordable or not.
Here are the comparative charts for a holistic analysis of the lending process, prevailing rates, and other aspects.
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Prodigy Finance is an international fin-tech platform based in the UK lending education loans for graduate courses at select universities or colleges. To apply for an education loan, a student must secure admission to any of the colleges listed by Prodigy Finance. See the List of colleges supported by Prodigy Finance.
The following table presents the features of Prodigy Finance education loans:
Interest rate (APR) |
11.5 - 14 % USD |
Admin fee |
5% of the loan amount |
Processing time |
7 - 10 working days |
Course years + 6 months |
|
15 - 30 % of overall expenses |
|
Repayment tenure |
7 - 20 years |
MPOWER Financing is a public-benefit corporation in the marketplace since 2014 providing education loans to international students. MPOWER Financing offers education loans for two years undergraduate and graduate courses at the colleges they have listed. See the list of Colleges supported by MPOWER Financing.
The table below shows MPOWER Financing education loan details:
12 - 14 % USD |
|
Processing fee |
5% of the loan amount |
Processing time |
7 - 10 working days |
Course years + 6 months |
|
Nil |
|
Repayment tenure |
10 years |
The process of loan approval with major public sector and private sector banks can be a bit taxing for commoners if they don’t have a cosigner. Worry not, there are international lenders who ensure a student gets the loan without much trouble.
Typically, your education loan application is backed up by documents on yours and cosigners identity and the collateral validity. Since international lendeders do not require the cosigner’s details, the documents you need to submit include your eligibility.
The documents for international student loans for which no co-applicant is needed are listed below:
Documents required for Prodigy Finance student loans:
Documents required for MPOWER Financing student loans:
Several students are meritorious but don’t have the financial capability to go to an abroad university. Education loans have limited reach, and the need for collateral also inhibits students from realizing their potential and going for education abroad.
The loan processing is usually easy if you have collateral, but it becomes cumbersome when it comes to getting a loan without having a cosigner or an asset to back your loan. Even for a cosigner, the criteria are very stringent, and has to be a close relative. There are no such hurdles for student loans without a cosigner, plus there are some added advantages:
Calculate your Education Loan EMI
Since their establishment, international student loans have helped many students without collateral or cosigner who couldn’t apply for education loans. You can also be one among them if you get admission to a listed institution and course of study.
However, be mindful that the interest rate is higher for international student loans since it is calculated in USD. You must plan your education loan repayment well in advance to avoid future troubles regarding the repayment within the available loan tenure.
Make sure you understand the process and the terms and conditions of the loan. Once you do, here is an easy way for a seamless loan application - check your education loan eligibility now.
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International student loans being good or bad depends on your situations and perceptions. They are best options when the applicant has high academic merit but no collateral or cosigner. One major issue with student loans from international lenders is their high interest rates compared to the loan options in India.
Education loans by international lenders are provided for selected courses and universities. If your university or course is ineligible it will be difficult to get an education loan from them. However, Prodigy Finance gives the option of a request to add your college to their list, but still suggesting other lender options in such cases as adding a new college is not a guarantee for loans and is a time-taking process.
Failure in repaying the international education loan should be avoided as it may lead to serious legal consequences. But it is an extreme case and normally the lenders are open to negotiations and talks when you face difficulties in loan repayment. In fact, the lenders keep a list of eligible colleges because they consider the student has better job prospects once they are graduated from any of those institutes.
In India, public and private sector banks mandate that students must have a co-applicant when they apply for an education loan.
Typically, an education loan is granted only when a co-applicant is also there to guarantee the loan.
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