Why No-Cosigner Loans are a Smart Choice for Parents?

You have to give up your dream university admission because your parents either said no to becoming co-applicants or weren’t eligible to be co-applicants. If another family member doesn’t step in, the student's loan application gets rejected. Education loans are a liability with years-long responsibility; not everyone is ready to take it. However, losing out on a global.

Instead of dropping your plans to study abroad, explore other options. Many lenders provide education loans based on the student's profile rather than the co-applicant's. Prodigy Finance is a prominent name on that list. It provides education loans to students without a co-signer. The interest rate starts at 9.35%, which is negotiable compared to the high return on investment (ROI) from a quality global education. Yet, when money is involved, deep research is required. To save you time, we have already done it for you and provided all the details below. 

What Does Co-Signer Mean?

A co-signer can be your parent, guardian, or blood relative who agrees to repay the loan if you are unable to. Their financial profile is verified, and their financial capacity affects the loan amount. Therefore, the co-signer's credit score and income also play a key role in deciding the interest rates and during loan approval.

Disadvantages of Being a Co-Signer

Even though your parents are co-signing the loan application to help you achieve your dream life. Yet, know its disadvantages before making any commitment:

Financial Liability:

If students fail to repay the loan, the responsibility of repayment comes on the co-signer, adding a financial obligation to their income.

Credit Score Risk:

If an EMI is delayed or missed, the credit scores of both the student and the co-signer are affected, making them ineligible for future loans.

Reduced Borrowing Capacity:

Credit reports are the first thing any lender checks before providing loan approval. Since the co-signer’s income is already committed to the student’s loan, their ability to borrow additional funds may be limited.

Benefits of No-Cosigner Education Loans

When students consider no-cosigner loans, they compare them to the other loan options. To draw a clear picture, here are the key benefits of a no-co-signer education loan. 

No Burden on Family:

With a no-cosigner education loan, the student is solely responsible for repayment, exempting parents and blood relatives from any financial obligations.

Build a Credit Score:

When a student moves abroad, they are taking a major step toward personal responsibility. An education loan supports this change and also helps in building a credit score, which is essential for accessing future financial opportunities.

Prodigy Finance No Co-Signer Loan Features

Prodigy Finance has been providing education loans to students since 2007, making it a trusted provider of no-cosigner loans for international students. Key features include:

No Co-Signer or Collateral Required:

For an education loan, you neither need collateral nor a co-applicant, making your profile the only determining factor for loan amount and repayment terms.

Loan Amount:

The loan amount is approved based on the student's future potential earning. Therefore, your education financing depends on your future earning potential.

Competitive Interest Rates:

The loan interest rate starts at 9.35%, which is competitive compared to unsecured loans with co-applicants offered by Indian lenders.

Repayment Terms:

Students can customize their repayment plan during the moratorium period based on their expected earning potential.

Covers Tuition and Living Expenses:

Prodigy Finance provides 100% funding, including tuition fees and living expenses, covering 1200+ schools and 850+ programs worldwide.

Eligibility Criteria for No Co-Signer Loans

To become eligible for the no-cosigner loan with Prodigy Finance, students need to meet some general eligibility criteria:

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  Get accepted into a postgraduate program at an eligible university. Click here to check.
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  Hold a valid passport.
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  A Letter of Acceptance (LOA) is not mandatory during the application. Need help with admissions? Click here.
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  The university should be on the list of eligible countries. Refer to the ineligible university list, here.
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  The student should be pursuing studies in eligible fields such as STEM, business, public policy, etc.

Documents Required for No Co-Signer Loans

When applying for an education loan, make sure to provide the following documents in English for faster processing:

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  A copy of your passport in a readable format.
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  Proof of address that displays your name and full residential address, matching the details provided in your application.
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  An LOA from your school that clearly shows your name, the school’s name, the course, and confirmation of your acceptance.
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  A copy of your credit report. If you do not have a credit history, a "No hit" or "No data" report is acceptable.
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  If you are currently employed, provide three months’ salary slips.
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  If there are any external sources, such as savings or contributions from your parents, supporting part of your education funding, make sure to include relevant documentation.

Applicant Process of No Co-Signer Loan

If you are considering a no-cosigner education loan, then follow the following steps while filling out the loan application in Prodigy Finance.

Apply Online:

Register an account and submit your application for the supported schools. You can apply for the loan without a Letter of Acceptance (LOA) and provide it later during the verification process. 

Get your Offer:

After submitting the loan application, you will receive a provisional offer, which is valid for 14 days. 

Verification:

When you have accepted the offer, you have to upload your supporting documents. If you haven’t submitted an LOA, then upload it for verification. 

Loan Approval:

Once you have received approval on the loan amount and terms, pay a USD 500 processing fee to get your sanction letter. This letter is mandatory for the visa application. 

Complete the Profile:

Explore the Prodigy Finance dashboard and complete the steps mentioned in the emails to complete the profile. It helps you keep track of your loan in one place and avoid confusion. 

Sign the Deal:

Once you have landed at your dream university, you are required to sign the loan agreement virtually, and Prodigy Finance disburses the amount directly to your university account. 

Limitations of No Co-Signer Loan

While no-cosigner loans offer numerous advantages, there are some limitations also:

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  Higher Interest Rates: No-cosigner education loans often come with higher interest rates compared to loans with co-signers.

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  Limited Coverage: Fund allocation depends on the country and university, so not all universities and programs receive 100% coverage.

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  Postgraduate Focus: These loans are mostly applicable to master’s programs rather than undergraduate studies.

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  Repayment Responsibility: The full repayment responsibility lies with the student, which can create pressure and require strong financial planning after graduation.

Conclusion

No co-signer education loans can be a smart choice for students who lack financial support. This option allows students to sponsor their education independently and chase study-abroad dreams with ease. However, the repayment terms of this type of loan can differ, which may cause some confusion.

To address this, consider using GyanDhan, a platform designed to guide you through the loan process. In collaboration with Prodigy Finance, GyanDhan assigns personal loan counselors to students. These experts help you understand your chances of loan approval, explain applicable interest rates, and identify potential lenders. All of this can be done in just a few clicks using the GyanDhan Eligibility Tool. So, don’t deal with the complexities alone and rely on expert assistance to make smart financial decisions.