Joint Loans with Parents for Education: How They Work & Benefits

Learn how joint education loans with parents work, including eligibility, benefits, government loan options, interest rates, and application steps in India.;

Update: 2025-07-02 10:56 GMT
Joint Loans with Parents for Education: How They Work & Benefits
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Introduction

Higher education often comes with significant financial requirements, making education loans a necessity for many students. A joint education loan, where parents act as co-applicants, is a beneficial option to secure higher loan amounts with better repayment terms. This guide explains how joint education loans work, their eligibility, benefits, and available financing options in India.

If you're exploring financing options specifically for medical studies, understanding how an Education Loan for MBBS works can offer helpful insights into course-specific benefits and eligibility. This becomes especially relevant when considering a joint loan structure with a parent or guardian. 

What is a Joint Education Loan?

A joint education loan is a type of student loan where both the applicant (student) and a parent or guardian act as co-borrowers. This means that both parties share equal responsibility for repayment, increasing the chances of approval and securing better loan terms.

How Joint Loans with Parents Work

1. Loan Application Process

● The student applies for an education loan, with a parent or guardian listed as a co-applicant.

● The bank evaluates the co-applicant’s financial stability, including income, employment, and credit score.

● Once approved, the loan amount is disbursed directly to the educational institution.

2. Eligibility Criteria for Joint Education Loans

The eligibility criteria for joint education loans depend on both the student and the co-applicant.

For Students:

● Must be an Indian citizen.

● Should have secured admission to a recognized university in India or abroad.

● Must be between 18 and 35 years old.

For Parents (Co-Applicant):

● Must have a stable income source (salaried or self-employed).

● Should have a good credit score (typically 700+).

● Must provide income proof, such as salary slips, IT returns, or bank statements.

3. Loan Coverage

A joint education loan typically covers:

● Tuition fees

● Hostel or accommodation costs

● Exam fees and books

● Travel and other study-related expenses (for international education)

4. Interest Rates and Repayment

● Education loan interest rates range from 8% to 16% per annum, depending on the lender and co-applicant’s financial profile.

● Most banks offer a moratorium period during the course and 6 to 12 months post-graduation before EMI payments begin.

● Repayment tenure usually ranges between 5 to 15 years.

Education loans come in many shapes—private offerings, bank-based plans, and schemes involving co-applicants like parents. Alongside these, Propelld supports families with a 100% digital, co-applicant-inclusive loan process, quickly tailored to student and parental eligibility criteria .

Education Loan by Government: Joint Loan Options

The Indian government provides several education loan schemes where parents can act as co-applicants. These loans often come with lower interest rates and subsidized repayment options.

1. Vidya Lakshmi Portal

● A centralized platform offering access to multiple banks.

● Interest rates start from 6.9% per annum.

● Government subsidies available for eligible students.

2. Central Sector Interest Subsidy (CSIS)

● Available for students from economically weaker sections (EWS).

● Provides full interest subsidy during the moratorium period.

● Applicable for loans taken from scheduled banks under the Model Education Loan Scheme.

How to Get Education Loan After 12th with a Parent as Co-Applicant

Students can apply for an education loan after 12th by following these steps:

1. Select the Right Course & Institution: Ensure the institute is recognized by UGC, AICTE, or a government authority.

2. Check Education Loan Eligibility: The co-applicant’s income and credit score impact approval chances.

3. Gather Documents: Required documents include admission letter, academic records, identity proofs, and co-applicant’s income proof.

4. Compare Lenders: Check the education loan interest rate and repayment terms across multiple banks.

5. Apply for the Loan: Submit the loan application with both student and parent details as co-borrowers.

Advantages of Taking a Joint Loan with Parents

Higher Loan Amount: Parents’ financial backing helps secure a larger loan amount.

Better Interest Rates: A financially stable co-applicant lowers the interest rate.

Easier Approval: Parents’ creditworthiness enhances approval chances.

Tax Benefits: Under Section 80E of the Income Tax Act, borrowers can claim tax deductions on interest paid.

Conclusion

A joint education loan with a parent as a co-applicant can make higher education more accessible by improving loan approval chances, securing better interest rates, and offering higher loan amounts. Whether you opt for a government-backed loan, a Bank of Maharashtra education loan, or another financial institution, having a parent as a co-borrower ensures smoother processing and repayment flexibility.

FAQs

What is a joint education loan?

A joint education loan is a student loan where both the student and a co-applicant (usually a parent) share equal responsibility for repayment.

What is the interest rate for education loans in India?

The education loan interest rate typically ranges between 8% to 16% per annum, depending on the lender and applicant’s financial profile.

How does the government help with education loans?

The government offers subsidized education loans under schemes like Vidya Lakshmi Portal and CSIS, reducing interest costs for eligible students.

Is a co-applicant mandatory for education loans?

Yes, most banks require a parent or guardian as a co-applicant for higher loan amounts.

What is a Joint Declaration Form for Education Loans?

A Joint Declaration Form is a document submitted by both the student and co-applicant (usually a parent or guardian) while applying for an education loan. It confirms their agreement on loan terms, repayment responsibility, and the provided financial details.

(The views, opinions, and claims in this article are solely those of the author’s and do not represent the editorial stance of The Assam Tribune)


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