How Can Parents Support Their Child in Getting a Student Loan for the USA?

Parents dream big for their children. When their children receive an offer letter from an overseas university, they feel like they’re on cloud nine for a second, but reality hits in the next second. The cost of studying abroad, especially in the United States, is often higher. A student loan is often required to support education in the US.

Parents of US study aspirants can offer significant support on the journey. In this blog, let’s see how.

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Why Does Your Parents’ Support Matter for an Education Loan to Study in the USA?

Following your dream of studying in the US is often an academic and financial commitment, which requires your parents’ support. Parents support you financially and emotionally.

Most Indian lenders require a co-applicant, and in most cases, it’s the parent who fulfils this role. Their income, credit history, and understanding of the loan process can make or break a student’s chances of securing a loan.

When Parents Play A Key Role in Your Student Loan to Study in the USA?

Involvement of your parents is important from the beginning to the end of the education loan process. They sit with you to decide on the lender, loan types, and loan terms, like the interest rate and repayment.

• Initial stage: Parents decide on the type of loan – secured or unsecured – and choose the lender from available options.
• Documentation: Most lenders require one or both parents to be cosigners on your loan. They must submit documents regarding your identity and financial capability.
• Loan sanction: Consent from your parents is required for loan sanction and disbursement.
• Repayment: Typically, parents are the cosigners for your loan application. If you struggle to repay timely, they are bound to the debt.

Documents Required from Parents for A US Student Loan

Your parents need to submit documents showing their identity and financial status. The lender evaluates the credibility of those documents before sanctioning your US student loan.

Eligibility Check: Who Can Be a Financial Co-Signer?

Parents meet one of the key eligibility requirements set by student loan lenders – a blood relation with the student borrower. Your cosigner parent must be financially eligible and must earn the minimum income set by the lender.

• Your parent should be Indian nationals
• Your cosigner parent must have a good CIBIL score
• Parental income must be stable

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How Can Parents Help the Student Understand Loan Terms and Conditions?

Your parents need full descriptions of education loans products, to pick the most favorable product to finance your education in the US. Economy loan lenders and assigned counsellors do the work, but there should be no confusion. Put in mind, clarity is essential to prevent future confusion.

• Always ask when you come across any ambiguous words or information
• Connect with the designated executive
• Compare repayment plans
• Clarify what happens if repayment is delayed

Emotional and Practical Support Parents Can Offer on Your Study Abroad Journey

Beyond finances, emotional support is essential. Studying abroad can feel isolating, especially during the initial months. Parents can:

• Stay connected regularly through calls or video chats
• Help manage any financial emergencies from home
• Encourage and reassure their child through academic or emotional lows

Having this consistent support system often boosts a student’s confidence and academic focus.

Common Mistakes Parents Should Avoid During the USA Student Loan Process

• Locking the first offer without comparison: Don’t lock the very first offer without comparing other loan products. Even a slight difference in the interest rate and repayment plans is important.
• Not getting details of collateral or cosigner requirements: Learn about the complete documents required for your loan application.
• Not reading the complete terms and conditions: Read and understand each loan term to avoid confusion and to easily compare different loan offers.
• Creating delays: Start your loan application early to avoid unexpected delays.

Final Remarks

Parents can offer their children unparalleled support in obtaining an education loan to study in the USA. They can emotionally empower and co-sign the loan offer, serving as the financial guarantee required by the lender. Involvement of parents is crucial for a smooth study abroad loan application process.

Parents may feel confused about which is the best education loan to study abroad. Understanding the complex loan terms and comparing diverse lenders cannot be easy for many parents. We’ve got your back – our counsellors break down every aspect of the loan options. Join Nomad Credit today and explore your education loan options for free.

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