Education loans without a cosigner for Indian students

Many lenders require a U.S. or Canadian cosigner, but finding one can be a big roadblock for Indian students. That’s where education loans without cosigners come in — and they can make all the difference. Understanding your graduate student loan options and the pros and cons of no-cosigner student loans is key to financing your education. Let’s break down the types of loans available, why cosigners are often required and how no-cosigner loans can simplify your path to studying in the U.S. or Canada.

1. Total number of Indian students in the U.S. (2023-2024):Indian students now form the largest international student group in the U.S., with a record-breaking 331,602 students in 2023-2024. This surge reflects a growing trend of Indian students seeking world-class education and better career opportunities in the U.S.Source: IIE Open Doors 2024 Report
2. Year-over-year growth – Indian students in the U.S. (2022-2023 to 2023-2024):The number of Indian students in the U.S. increased by 23% in just one year, highlighting the strong demand for American education. This is the highest annual growth rate in over a decade, showing a clear shift in global mobility trends.Source: IIE Open Doors 2024 Report
3. The proportion of Indian students among all international students:Indian students now make up 29.4% of the total 1.1 million international students in the U.S. This means that nearly one in three international students in the U.S. is from India, further cementing their dominance in global student mobility.Source: IIE Open Doors 2024 Report

Before diving into the specifics of cosigners, you should understand the options for student loans available to Indian students. Your funding options typically include:

1. Private international student loans

Private lenders, such as banks, credit unions or specialised financial institutions, offer loans to Indian students, but these usually come with strict eligibility requirements like a cosigner or credit history. However, there are some specialised lenders offering private student loans without cosigners.

2. Government and institutional loans

Some U.S. and Canadian universities provide loans directly to students, including Indian students. These loans may have favourable terms, but they’re not widely available at many schools and often require supplementary funding sources. Additionally, these are generally not available to Indian students.

3. Loans from India

Many Indian students choose to borrow from lenders in India to fund their education abroad. These loans might offer more favourable interest rates or terms, but they can also introduce risks related to fluctuating exchange rates. Indian banks often require collateral for education loans, which may not be feasible for all students.

While these loans can provide the necessary funds to pursue your degree, private lenders often require cosigners, which can complicate the process for Indian students.

A cosigner is someone who agrees to take responsibility for your loan if you’re unable to repay it. Usually, your cosigner must reside in the country you plan on studying in and where your loan originates. For Indian students, many private lenders require a cosigner because:

• Lack of U.S./Canadian credit history: Indian students often don’t have an established credit score in the host country, which lenders rely on to assess creditworthiness. Without this information, lenders see the student as a higher financial risk.
• Increased lending risk: Lenders may view Indian students as riskier borrowers due to potential issues with visa status, employment prospects, and the possibility of returning to India after graduation.

A cosigner reduces this risk by agreeing to cover your loan payments if you’re unable to meet the obligations, providing the lender with a level of security.

While having a cosigner can increase your chances of securing a loan and getting better interest rates, it’s not always feasible for Indian students. Here’s why cosigners can be a major drawback:

• Difficulty finding a cosigner: Most Indian students don’t have family members or close friends in the U.S. or Canada who meet the requirements to cosign a loan. Asking someone to cosign is a significant request because the cosigner is financially responsible for the loan if the student defaults.
• Strain on personal relationships: Even if you find someone willing to cosign, this agreement can put a strain on your relationship. Any missed payments or loan defaults could impact their credit score and financial standing, leading to tension or complications.

Whether or not a no-cosigner student loan is the right choice depends on your individual circumstances. Here are some factors to consider:

• Your field of study: If you’re pursuing a degree in a field with strong employment prospects (such as engineering, technology or healthcare), no-cosigner loans may be more accessible since lenders are more confident in your future earning potential.
• Your financial need: If your loan amount is large or you have high tuition costs, you may need to explore all loan options, including cosigner loans, to secure enough funding. However, if your funding needs are moderate, a no-cosigner loan could cover your expenses without additional complications.
• Your ability to repay: It’s essential to consider your long-term ability to repay the loan. No-cosigner loans may have higher interest rates due to the increased risk for lenders. Make sure you understand the total cost of the loan, including interest and fees, and create a realistic repayment plan.

MPOWER Financing understands the unique challenges Indian students face when it comes to securing education funding. That’s why MPOWER offers international education loans specifically designed for students who don’t have access to a cosigner or collateral, making it easier for them to achieve their academic goals.

Here’s why MPOWER’s no-cosigner loans are a smart choice for Indian students:

• No cosigner, no collateral required: Unlike many traditional loan options, MPOWER does not require students to provide a cosigner or any form of collateral. This makes the loan process far more accessible, especially for Indian students who may not have U.S.-based financial backing.
• Fixed interest rates and flexible amounts: MPOWER offers loans from US$2,001 (INR 1,66,700) to US$100,000 (INR 83,33,000) with fixed student loan interest rates, allowing students to plan for predictable, manageable monthly payments. In addition, students can enjoy a 0.25% interest rate discount if they set up auto pay, making the repayment process even more flexible and affordable.
• Full coverage of education costs: MPOWER loans in the U.S. cover a wide range of educational expenses, from tuition and housing to books, meal plans, and even international health insurance. Indian students in Canada can cover their tuition with an MPOWER student loan. This ensures students have the financial support they need for academics and their overall well-being.
• Fast, digital application process: MPOWER’s online application process is streamlined and convenient, making it easy for students to apply for funding. With a quick eligibility check and rapid approval, students can secure their loans without the hassle of lengthy paperwork.
• Support beyond loans: MPOWER offers more than just financial assistance. Students also gain access to career resources, visa support and exclusive discounts on essentials like textbooks and travel, helping them thrive both academically and personally.