What is Co-Applicant & Collateral Loan?
This is an education loan where a co-applicant is required, and the student must provide collateral (like property, fixed deposits, or insurance).Offered by most banks and financial institutions.
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Features
- Lower interest rates due to secured nature.
- Co-applicant’s income and credit history are considered.
- Collateral can be residential property, FD, or life insurance policy.
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Eligibility
- Co-applicant with a stable income source.
- Clear and marketable collateral.
- Admission to a recognized university.
- Credit History Consideration:
- Lenders may consider the student’s and co applicant's CIBIL score (Credit Information Bureau India Limited) or other credit reports to assess repayment ability.
- Even students or co applicants without a Credit/CIBIL score are eligible, as lenders may assess loan eligibility based on other factors like student's university ranking, course, and co applicant's income profle.
Suitable For:
- Students who can provide assets as collateral.
- Students who are planning for Undergraduate course.
- Students seeking the lowest possible interest rates.
- Students seeking for higher loan amount. For Eg. loan amount of more than 1 crore rupees.
Benefits
- Lower interest rates.
- Higher loan limits due to security.
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Frequently Asked Questions (FAQs)
What is the maximum loan amount available?
The maximum loan amount varies based on the lender and your profile. It can cover both tuition fees and living expenses.
What is the interest rate?
Interest rates start from 8% and depend on the lender and your eligibility.
Can I repay the loan before the scheduled time?
Yes, you can prepay the loan without any foreclosure charges.