Education Loan Without Collateral: All you Need to Know

What Is an Education Loan Without Collateral?

An education loan without collateral for Abroad or India is a loan where you do not have to provide any security to the bank. It is a helpful option for aspirants who want to study overseas but do not have significant assets to use as collateral. These loans are based on other factors, like an academic record, the course you want to pursue, and future job prospects. They are generally unsecured education loan, meaning borrowers do not need to pledge assets like property or shares. But, interest rates may be higher compared to secured loans, and the loan amount can vary based on the bank/ lender's policies.

So, by reading above, you get an idea about the non collateral education loan for abroad in detail. Also, for more information, you can connect with our study abroad consultants. Now in the next section, know about the documents that you may need while applying for your loan.

Also Read: How to Secure an Education Loan in USA 2024? Find Out Now!

Documents Required for Education Loan Without Collateral

Here is a generalized list of documents required for getting an education loan without collateral:

• Loan application form
• Identity proof- PAN card, Voter ID card, Passport
• Proof of admission- you can submit a conditional offer of admission as well.
• Address proof- a recent copy of the telephone bill, electricity bill, or water bill.
• Passport-size photographers
• Loan account statement of one year, if there are any previous loan tokens from any lender.
• Past academic record: 10th, 12th, Undergraduate mark sheet, test scores of entrance tests like GRE, TOEFL, IELTS, etc.

Papers required from the co-applicant for a study abroad loan without collateral:

• Identity Proof
• Address Proof
• Income Proof- the documents for the same will differ depending on the type of employment, such as self-employed or salaried.

Self-employed Co-Applicant

• Business address proof
• Last 2 years IT return
• TDS Certificate
• Certificate of qualification
• Bank account statements for the last 6 months

Salaried Co-Applicants

• Salary slips for the last 3 months
• Copy of Form 16 of the last 2 years of a copy of IT Returns for the last 2 years.
• Bank account statement for the last 6 months.

Thus, these are the documents you must have to apply for your non-collateral education loan. So, prepare documents for your education loan without collateral and co-applicant. Now, after knowing the requirements, it is important to know the eligibility criteria for it. Look below for details.

Eligibility Criteria for Education Loan Without Collateral

Students must fulfill the below eligibility criteria to avail an abroad non-collateral education loan for abroad from India.

• After all liabilities and expenses, yearly income should be above Rs. 4 lakh.
• Co-applicant should have more than a 700 CIBIL score.
• To study in USA, the applicant must have a GRE score of more than 300.
• Study in Canada, Australia, UK and other countries requires, IELTS score above 6 or 6.5.
• Guardian/Parents of the student must have their own residential house.

Loans can not be availed for:

• Pathway Course
• Foundation Course
• UG Degree or Certificate Courses
• MBBS Degree
• Pilot Aviation Programs

However, knowing about your course and university is essential in order to select your loan type so our course finder and college predictor can help you in finding all the information you want. Moving further, you may wonder how a student loan without collateral can benefit you. Thus, read below to learn about the pros of getting it.

Also Read: How to Get Education Loan for Canada

Benefits of Education Loan Without Collateral

Here is the list of benefits of education loan for abroad studies without collateral. Take a look below:

• No Need for Big Assets: The biggest advantage is that you do not need to own something like a house or land to get this loan.
• Focus on Your Studies: With no collateral at stake, you can focus on your studies without worrying about losing your assets.
• Broader Access: These loans open doors for more aspirants to study abroad, especially those who might not have significant assets.
• Quicker Process: Generally, the approval process for non-collateral loan is faster since there’s no need to check and approve assets.

After, knowing about the benefits of the without collateral student loan you must be wondering what the difference is between education loan for abroad studies without collateral. So, read the next section to know.

Education Loan with Collateral Vs Without Collateral

Let’s look at the table below to understand the difference between an education loan without collateral and one with collateral.

Basis of Difference	Non-Collateral Education Loan for Abroad	Collateral Education Loan
Requirements	Does not require collateral, but may require a financial co-applicant.	Property or fixed deposit, as security for the loan, is required.
Loan Amount	Lower compared to loans with collateral.	Generally higher depending on the value of the collateral.
Interest Rates	Interest rates may be high due to the absence of security.	Interest rates may be low due to security pledged.
Eligibility Criteria	Stringent as the lender has to rely on the borrower’s creditworthiness and co-applicants financial stability.	Relaxed as the collateral serves as security.
Loan Processing Time	Less due to relaxed paper-word.	More due to documentation, property valuation, and more.

After knowing the difference between with or without education loans you want to know about the banks who are offering it. So, let’s take a look below to know the list.

List of Banks Offering Abroad Education Loan Without Collateral

There are many banks and lenders in India who can provide you collateral free education loan. They are listed below:

• Public Sector Banks: UBI and SBI
• Private Sector Banks: Axis Bank, ICICI Bank, and IDFC FIRST Bank.
• NBFCs: HDFC Credilla, Avanse, Auxilo and Incred.

Let's take a look below to know about their offered loan amount and interest rate.

Bank/Lender Name	Loan Amount	Interest Rate
UBI	Up to INR 40 Lakh	9.80% - 11.30%
SBI	Up to INR 7.5 Lakh	10.65% - 11.50%
Axis Bank	Up to INR 50 Lakh	11.00% - 11.50%
IDFC FIRST Bank	Up to INR 50 Lakh	11.50% - 13.25%
ICICI Bank	Up to INR 50 Lakh	10.85% - 12.50%
HDFC Credilla	Up to INR 65 Lakh	11.25% - 13.00%
Avanse	Up to INR 75 Lakh	12.50% - 13.50%
Auxilo	Up to INR 65 Lakh	11.25% - 14.00%
Incred	Up to INR 60 Lakh	12.00% - 14.00%

Now, after knowing everything about student loan without collateral you want to apply for it. So, read the next section for its steps.

Steps to Apply for Education Loan Without Collateral

Below is a step-by-step guide for the application process to apply for loan without collateral for abroad studies:

Step 1: Select the most suitable education loan for abroad studies without collateral as per your needs.

Step 2: Thoroughly review all the loan information, including the moratorium period, interest rate, repayment tenure, and any special provisions offered by the Indian government for student loans for abroad studies.

Step 3: Visit the official website of the selected lender that provides the student loan you wish for.

Step 4: Fill out the application form on the lender’s/ bank website. Provide accurate and complete information as needed.

Step 5: Scan and upload the necessary papers as specified by the bank/ lender. These documents may include academic records, financial statements, university admission letters, and any other documents requested by them.

Step 6: After completing the form and uploading the needed documents, apply.

Step 7: Wait for the bank/ lender’s decisions on your loan application. The processing time may vary depending on them but typically you will receive a response within a certain period.

So, these are the steps you must follow while applying for your non collateral education loan for abroad. With this loan, you can study in UK, Canada, Australia, or any other country where you want to go.

Also Read: Student Loan for UK: Document Required, Types & Eligibility

Conclusion

Summing up, this blog has equipped you with the essential knowledge for applying an education loan without collateral. Equip yourself with these details, you can confidently select the best loan for your study abroad from India. For further reassurance and guidance, consider Gradding.com for your successful journey. We are the best study abroad consultants in Kolkata, Jaipur, Delhi, Mumbai, and other cities. Moreover, our expertise can assist you in selecting the perfect funding for your journey of studying overseas.

FAQS

1. Can I Get an Education Loan Without Collateral?

Yes, you can get an abroad education loan without collateral for smaller amounts. For larger amounts, some banks/lenders offer unsecured loans based on your academic and future financial profile.

2. How Much Education Loan Can I Get Without Collateral?

One of the top lenders offers without collateral education loan is private banks. Besides, you can also get it from many NBFCs, you can check the above blog for the list of them. For the loan amount, it based on the banks and NSBFs policies, can ranges somewhere between INR 50-70 Lakh and for overseas lenders.

3. How to Get an Education Loan for Abroad Studies Without Collateral?

To get an education loan without collateral for abroad studies, you should research lenders to ensure you meet their eligibility criteria and compare offers based on interest rates and terms. Submit your application form and once approved, the loan amount will be disbursed directly to your university.

4. Is there a Processing Fee Associated with an Education Loan Without Collateral?

Yes, there is a nominal processing fee associated for education loan without collateral. A processing fee is charged to process and verify your student loan application. However, depending on the lender you may be asked to pay 0.5% to 1.5% of the loan amount as the processing fee.

5. Are the Interest Rates Higher for Education Loans Without Collateral?

Yes, banks levy higher interest rates for abroad education loan without collateral, as they do not ask for anything as security to safeguard their interest in case the borrower fails to repay the amount of the loan.