In recent times, Indian students are moving to foreign destinations to pursue higher education. The top rank universities and vibrant work opportunities have been the reasons why students want to go to popular study abroad destinations. These students take education loans for funding their education and other expenses. Applying for education loans can be a tedious task. There are many steps and persons involved in this process. One important person amongst the others is the co-applicant. Taking Education loan for abroad studies without collateral, especially with NBFCs and Private Banks the profile of the co-applicant is given extra importance.
In this article, we will focus on the Role of Co–applicant in education loans. Let us go through the details of the Co–applicant.
Who is a Co-applicant?
A co–applicant in an education loan is the person who signs and takes responsibility for the loan applicant. If the applicant will be unable to pay back the loan amount, it will be the co – applicant’s responsibility to pay back the loan amount. A co–applicant must be a family member of the loan applicant. An ideal co–applicant will be the parents of the applicant. Co-applicant is also known as a co-signer or co-borrower.
Since you got to know who a co–applicant is, let us know the types of co-applicants.
Types of Co-applicants
There are two types of Co- applicants – Primary co-applicant and financial co-applicant. Let’s understand the difference between these two.
- Primary co-applicant – Primary co-applicant are the parents of the applicant. The financial profile doesn’t matter in this type.
- Financial co-applicant – Financial co-applicant can be any blood relative of the loan applicant. Members of the family who can be financial co-applicant are siblings, paternal uncle, paternal aunt, maternal uncle, maternal aunt and first cousins.
Who can be the Co-applicant?
Different lenders have different eligibility criteria for co-applicants. Based on the eligibility criteria, given below is the list of co-applicants accepted by these lenders.
- Government banks – Parents, Parents-in-law, Siblings, Parent’s siblings, Spouse, First cousins.
- Private banks – Parents, Parent’s-in-law, Siblings, Spouse
- NBFCs – Parents, Parents-in-law, Siblings, Spouse, Parent’s siblings, First cousins.
What is the role of a Co-applicant?
A co-applicant is regarded as the secondary applicant in the loan process. The role of the applicant is to be responsible for paying back the loan amount if the applicant is unable to pay the amount. Another important role of the co- applicant is to be the contact person for the bank since the applicant will leave for the study abroad destination.
Eligibility criteria of the Co-applicant
The co-applicant has an important role to play in the Unsecured and Secured Overseas Education Loan. Let us look at the Eligibility criteria of the Co-applicant.
- CIBIL Score – CIBIL Score is an important requirement for analyzing the co-applicant’s profile. The co-applicant is required to have a good CIBIL score to be eligible for this loan.
- IT Returns Documents – Co–applicants are required to show proof of their IT Returns for the last two financial years.
- Proof of Income – Proof of Income like salary slips if the co-applicant is employed or Business Registration Certificate and bank account statements if the co-applicant is self-employed should be submitted to the lenders.
We have tried our best to cover the details of a Co-applicant. If you are planning to pursue higher education in a foreign country and you are confused about how to apply education loan for abroad studies, you can contact any of the best overseas education loans to enquire about your doubts.
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