Overseas Education Loan Eligibility for Applicants & Co-Applicants: An Insight

Did you know that the market value of global student loans is projected to reach $3.8 trillion by 2029? This expansion of the market is the result of the high cost of overseas education and the subsequent need for financial assistance to cover these expenses. It also means that many students are opting for overseas education loans. Clearly, these loans serve the purpose of bridging the gap between students and their dream of studying abroad. 

To get these loans, there are certain eligibility criteria as well. So, if you are thinking,’ How do I know if I’m eligible for an overseas education loan?’, read ahead. In this article, we will cover all about the education loan eligibility for both the applicant and the co-applicant. This will help you assess your chance of success before investing your time in an application. Knowing these requirements also helps in gathering the necessary documentation and information needed for a successful application. Let us start with understanding the education loan eligibility of the applicant first. 

Overseas Education Loan Eligibility for Applicants

Yes, there are certain eligibility requirements for you, as a student and loan applicant. These criteria are different for different financial Institutions, but here are the general ones:

• You must be a citizen of India.
• You must be above 18 years of age.
• You must have scored more than 50% in HSC and Graduation.
• You must have gained admission to a recognized University with a career-focused course. 

Most financial Institutions also require a co-applicant for processing the loan, but if you are looking for an education loan without collateral and co applicant, you can opt for International Lenders or an NBFC. In case you need to have a co-applicant, they have certain eligibility requirements as well. Let's discuss those in our next section. 

Overseas Education Loan Eligibility for Co-Applicants .

As a student, you may lack a credit history and a stable income source. That is why most lenders insist on the addition of a co-applicant to ensure loan repayment. A co-applicant is someone who applies for the loan jointly with the student. They can be parents, guardians, siblings, spouses, or immediate relatives. Here are a few of the eligibility parameters considered for a co-applicant:

• They must have a credit score above 700.
• They must have Income Tax Return documents.
• Their annual income must be at least INR 30,000 per month, excluding other liabilities. 
• They must have income proof, which is salary slips for the last 6 months or bank statements for people in business.

Having a co-applicant can make the loan process smoother and faster. Additionally, they can also benefit from the tax advantage under Section 80E of the Income Tax Act. If you fulfil the above-discussed eligibility criteria for applicants and co-applicants, then getting an overseas education loan will be easier for you. However, if you think you will face some challenges, read our next section for tips to overcome them. 

Eligibility Requirement Challenges & Tips to Overcome Them

While the eligibility criteria for overseas education loans are not that complex, there can be circumstances where you may face an obstacle. Let us discuss a few of them and their possible solutions.

Low Credit Score of Co-applicant

A low credit score indicates defaulting on previous loan payments. In case your co-applicant has a low credit score, to improve it, they will have to take up a new loan and pay the EMIs regularly. After 3-4 months of regular payments, the credit score will start to improve.

Low Academic Performance

Low Academic Performance can be a problem, so it is important to maintain a good score in your HSC and graduation if you are planning to study abroad. However, certain financial Institutions overlook your academic performance, even the backlogs, so make sure you research well for the right lender before filling out the loan application. 

Low Income of Co-applicant

During the moratorium period, the interest is paid by the co-applicant. Hence, if the co-applicant's income is less, then the loan application may get rejected. To avoid this, you can add another financial co-applicant or opt for NBFCs or International lenders who provide loans without a co-applicant. 

Other common challenges, such as the requirement of collateral, high interest rates, or limited loan options for specific countries, can be resolved by thoroughly researching the right lender based on your requirements. In case you need assistance with that or the complex documentation process, or information for any new education loan scheme available, you can reach out to the top Overseas Education Loan Consultants. They can not only help you ascertain your eligibility but also help you connect with various Banks and Financial Institutions.