In education funding, a transformative era has emerged, eliminating the barriers of collateral requirements and the necessity for co-applicants to pursue higher studies. This blog delves into the straightforwardness and empowerment inherent in education loans that defy traditional norms. While Indian banks and NBFCs typically impose collateral or a co-signer mandate, international lenders stand out by providing funding up to 100,000 USD without these requisites. Let's explore securing an education loan devoid of collateral and co-applicants.

How does a loan without a co-applicant work?

Securing an education loan without collateral and a co-applicant is contingent upon factors such as the chosen college, country, and the student's academic history. Lenders offering such loans typically have a predefined list of approved institutes and courses for which they extend financial assistance. The specific institution and program selected can significantly influence key loan parameters, including the loan amount, interest rates, repayment terms, and more. It's important to note that international lenders disburse funds in foreign currency, predominantly in USD. Presently, the exchange rate stands at 1 USD equivalent to 83.349 INR.

Lending options for loans without co-applicant

Two primary lenders stand out for providing education loans: MPOWER Financing and Prodigy Finance. Let's delve into each of them individually to understand their offerings.

MPOWER Financing

Having established itself as a public-benefit corporation in 2014, MPOWER Financing has been a notable player in the market, specializing in providing education loans to international students. The focus of MPOWER Financing is on two-year undergraduate and graduate courses offered at the colleges within their specified list. Key details of MPOWER Financing's education loan program include a maximum loan amount of up to $100,000 USD, subject to an annual cap of USD 50,000.

The interest rates are fixed, standing at 12.99% for graduate programs and 13.99% for undergraduate programs. Borrowers can benefit from a 0.25% interest rate reduction through the auto-pay incentive. A processing fee of 5% is applied to each disbursement, with an expected processing time of 7-10 working days (when processed through GyanDhan). The moratorium period begins from the course years and extends for an additional 6 months. Notably, there is no margin money requirement, eliminating the need for an upfront contribution, and the repayment tenure spans a comfortable 10-year period.

Prodigy Finance

A notable player in the international fin-tech landscape, Prodigy Finance, headquartered in the UK, specializes in providing education loans for graduate courses at specific universities or colleges. Prospective borrowers seeking an education loan through Prodigy Finance are required to secure admission to any of the colleges listed by the platform.

Prodigy Finance's education loan features encompass a maximum loan amount covering up to 100% of the study costs. The interest rate, ranging from 12% to 14%, operates on a floating basis. An admin fee, equivalent to a processing fee, is set at 5% of the loan amount. With an expedited processing time of 7-10 working days, particularly when processed through GyanDhan, the platform ensures a swift application process.

The moratorium period begins from the course years and extends for an additional 6 months. There is no margin money requirement, eliminating the need for an initial contribution, and borrowers enjoy flexibility with repayment terms extending up to 20 years.

Documents for education loan

Ordinarily, the substantiation of your education loan application involves furnishing documents related to your and the co-applicant's identity and collateral validation. However, as international lenders do not necessitate a co-applicant, the documentation required primarily revolves around establishing your eligibility. The requisite documents for education loans without collateral and a co-applicant are outlined below:

Resume or CV
Home address proof
Door test scores (GRE, GMAT, IELTS, TOEFL, etc.)
Admission letter
Previous academic records
Estimated cost of attendance
Passport
Secondary photo ID from home country
Supporting documents of external funding
Visa documents
Student’s identity and address proof
School admission proof
Credit report
Job offer (if employed)
Savings or family gift proof to fund studies (if any)
Other sponsorship/ scholarship confirmation document

Get a more detailed insight about documents here - https://www.gyandhan.com/blogs/international-student-loan-without-cosigner

How education loan without a co-applicant is good?

Many bright students find themselves constrained by financial limitations when aspiring to pursue education abroad. The conventional scope of education loans is often limited, exacerbated by the requirement for collateral, hindering students from realizing their academic potential on an international scale.

The process of obtaining a loan is typically straightforward with collateral, but it becomes intricate when seeking a loan without a co-applicant or tangible asset to secure it. Even with a co-applicant, stringent criteria, often requiring a close relative, pose challenges. In contrast, international lenders for student loans present a more accessible and advantageous avenue.

One notable advantage is the swift approval of loans within a week, coupled with the absence of the need for a cosigner or collateral. The application process is streamlined, involving minimal paperwork that can be conveniently uploaded online for verification. This eliminates the necessity to visit physical branches, saving considerable time and energy.

Moreover, the documentation requirements are significantly reduced compared to direct approaches to traditional lenders. Notably, the sanctioned loan amount is directly credited to the college, alleviating the burden on students to manage substantial sums in their bank accounts.

The university profile assumes a pivotal role in determining interest rates and loan amounts for meritorious students. Importantly, the loans operate through established legal channels, mitigating the risk of fraudulent practices.

Furthermore, students have the option to request a visa support document to facilitate obtaining an I-20 from the university if required, adding an additional layer of convenience to the process.

Now that you're aware of the possibility of securing an education loan without the need for collateral or a co-applicant, you can strategically plan your journey toward studying abroad. Prioritize a comprehensive understanding of the loan application process and thoroughly acquaint yourself with the associated terms and conditions before proceeding with international lenders. It is advisable to review the list of institutes and courses offered by these lenders to align your educational aspirations with the criteria set by both you and the lending institution. This proactive approach ensures a well-informed and tailored strategy for your pursuit of higher education abroad.