Education in India has become expensive, which has led many students to rely on education loans, who often need a sponsor. The role of a sponsor is to ensure the repayment of loans if the lender does not maintain, but this responsibility poses financial risks. Know the risks: Borg is legally obliged to repay if the borrower on the loan wills. Education today in India has become more expensive, especially for those who enroll in prestigious universities or take higher education abroad. Education loans sometimes serve as a financial lifeline for students who pursue academic dreams. But what happens when the bank wants extra insurance in the case of education loans. A lesser -known, but decisive, stakeholder in the loan process is the sponsor for education loans. Who is a sponsor for education loan? A sponsor for education loan is released by agreeing to be responsible for repaying the loan if the borrower does not pay. You can think of them as the financial protection of the money shooter. Most education loans in India have long -term years, which usually need a sponsor. Difference between sponsor and co-application people and co-applications can often get confused. A sponsor is only responsible in the event of the main lender defaulting, while a co-applicant is responsible for repaying the loan from the start. However, the sponsor may have a significant amount of financial and legal inequality. Why do banks ask for a sponsor? Banks are looking for sponsor to reduce their loan risk. A sponsor with a stable income and a solid credit history gives students within collateral or stable income the assurance that the loan will be repaid, either by the lender or the sponsor. Benefits to be a sponsor that makes the potential of a loved one: The student can be accepted, paid the fees and follow higher learning on your behalf. Moral and Emotional Reward: If you help a family member with their training, you will give satisfaction and pride. Risks to be a sponsor of legal and financial obligations: If the student does not repay the loan, the bank will be repaid if the sponsor, which may result in an official notice. Impact on creditworthiness: If the student has not repaid and has missed EMIs and defaults, it will also have a negative impact on you if the sponsor, in addition to the student’s creditworthiness. Impact on the loan color of the sponsor: Borg status is a liability for lenders, so you cannot be eligible or less attractive to home, car or personal loans. Precautions Before saying yes, the loans, especially interest rates, repayments and moratorium periods contain. Use your loan account or a bank warning to check the refunds of loans. Don’t use too much too much by guaranteeing too many loans. When is it reasonable to withdraw? Withdrawal as a sponsor is a reasonable financial decision if you already have high -level loans. We manage to increase your creditworthiness. You may want to use credit for your own personal aspirations soon. Finally, although it is a sponsor for an education loan, it is also a little thoughtful act, but it also has problems. Such a role requires the same care as the concern in the Indian financial system where familial ties often mix with financial problems. Understand the commitment, think about the risks and act carefully. Disclaimer: Mint has a merger with Fin-Techs to provide credit, you must share your information if you apply. These bonds do not affect our editorial content. This article only intends to educate and distribute awareness about credit needs such as loans, credit cards and creditworthiness. Mint does not promote or encourage credit as it has a set of risks such as high interest rates, hidden costs, etc.
Who is a sponsor for education loan? Meaning, role and responsibilities set out | Mint
