Know About Non Collateral Education Loan for Abroad Studies

What is a Non Collateral Loan for Studying Abroad?

If you are a study abroad aspirant without any assets to pledge for your study loan, then non collateral study loans are ideal for you. The loans without collateral are also referred to as unsecured loans. This is because, in these loans, you are not required to provide any security against the amount you are borrowing. Further, to get approval for an unsecured education loan, you will need to have creditworthiness. Hence, let’s find out more details about this type of loan.

Now that you know the non collateral education loan meaning, let’s see what expenses it incurs.

Expenses Covered in an Unsecured Education Loan for Abroad

Study loans cover many of the major expenses that you need to incur when planning to study abroad. However, the expenditure coverage can vary depending on the institution lending the money. But, there are some payments that are covered under most of the abroad education loan without collateral offered to students. The following is the list of such charges:

Tuition Fees

A major portion of the study loans is dedicated towards tuition fees. All the different loan types cover this expense. The fee amount is directly disbursed to the concerned college or university.

Living Expenses

The cost of living covered under a study loan can vary. However, they usually include the amount needed for accommodation, travelling, food, etc. This sum of money is disbursed to the student.

Health Insurance

Most of the student loan without collateral from private banks also cover the health insurance charges. This is because insurance is mandatory in many countries.

Visa Fees

There are several money lending institutions that cover the visa fee in the loan amount. Most of these are private banks.

Air Ticket

This expenditure is not a part of the collateral free education loan amount. However, upon your request, the banks can add this to the list of expenses covered by a study loan.

Miscellaneous

The money that you need to spend on your stationery, projects, tours, etc., is mostly covered under your study loan. In case it is not so, you can request the institution to add these to the list.

Now, take a look at the list of various organizations offering without collateral education loan to students.

Also read: Education Loan For Abroad Studies.

Top Banks and Financial Institutions Offering Non Collateral Loans

There are a number of institutions where you can apply for a study loan to get into foreign universities. The following are the details about the various money lenders to study overseas.

Public sector: These are government-owned banks that offer lower interest rate loans to students. These further have a longer repayment term.

Bank Name	Loan Amount (in INR)	Interest Rate
Union Bank Of India	up to 40 lakhs	9.75%
Bank Of Baroda	up to 40 lakhs	10.10%
State Bank Of India	up to 7.5 lakhs	11.15%

Private sector: These are private banks that offer education loan for abroad studies without collateral on flexible terms and quicker processing. However, their interest rates are a bit higher.

Bank Name	Loan Amount (in INR)	Interest Rate
ICICI	up to 1 Cr	10.5 to 11.25%
IDFC	up to 75 lakhs	11.75 to 13.25%
Axis	up to 50 lakhs	11.5 to 12.5%

Non-banking financial companies: If you are not able to apply for a loan at banks, you can also get financial help from NBFCs. Their eligibility criteria are flexible, and it is easier to get a study loan.

NBFC	Loan Amount (in INR)	Interest Rate
Avanse	up to 40 lakhs	12 to 13.25%
Incred	up to 50 lakhs	11.65 to 13.5%
Auxilo	up to 40 lakhs	12 to 13.25%

International lenders: These are institutions that are based in a foreign location and provide study loans to Indian students.

International Lenders	Loan Amount (in INR)	Interest Rate
Mpower Finance, Prodigy Finance	43L to 65L	8 to 11%

Next up is the process to apply for a non collateral education loan for abroad along with its requirements.

Differences in Collateral and Non-Collateral loans

There are several differences between Collateral and Non-Collateral loans, which can be based on the loan amount, requirements, and other factors. Therefore, go through the table below and learn which one is perfect for you.

Factors of Difference	Collateral	Non-Collateral
Requirements	It requires an asset in form of security such as property papers.	It does not require any asset in form of loan security.
Interest Rates	Interest rate here is lower because the lender has security deposit.	Interest rate here is higher because lander has more risk.
Loan Amount	It has high borrowing limits.	It has low borrowing limits.
Approval Process	Approval process can be more time taking because of asset evaluation.	Here, approval process is comparatively quicker.
Risk	There is a risk of loosing the asset if the borrower defaults.	There is no risk of loosing the asset but the credit score may get affected if the borrower defaults.

These are the major differences between Collateral and Non-Collateral loans. So, read them thoroughly and choose one that you think is perfect for you. However, both these loans will cover your academic expenses abroad for paying the tuition fees. Moreover, if you are looking for a perfect university, then take the help of our university finder tool which uses AI to evaluate your profile and show you the most suitable results.

Now, read the next section to know the comparison of different types of lenders providing education loan without collateral.

Comparison of Different Lenders Providing Education Loan without Collateral

Go through the below table to know about the comparison of different lenders for the loan amounts and collateral free amount.

Bank Name	Loan Amount and Collateral Required
HDFC Bank	Domestic Education - Up to Rs.30 lakh Foreign Education - Up to Rs.45 lakh For loans up to Rs.7.5 lakh no collateral is required
State Bank of India	Domestic Education - Up to Rs.15 lakh Foreign Education - Up to Rs.1.5 crore For loans up to Rs.7.5 lakh no collateral is required
Bank of Baroda	Domestic Education - Up to Rs.80 lakh Foreign Education - Up to Rs.80 lakh For loans up to Rs.7.5 lakh no collateral is required
ICICI	Domestic Education - Up to Rs.50 lakh Foreign Education - Up to Rs.1 crore For loans up to Rs.20 lakh (UG) and Rs.40 lakh (PG) no collateral is required
Kotak	Domestic Education - Up to Rs.10 lakh Foreign Education - Up to Rs.25 lakh For loans up to Rs.4 lakh no collateral is required

Eligibility Criteria

Some of the general criteria for getting an education loan for abroad studies without collateral are as follows:

• The applicant must be a citizen of India
• Age limit of 18 to 35 years
• English language proficiency scores
• The credit history of the applicant and co-applicant is vital for unsecured loans.
• The course that you are pursuing should also be recognized by the lender.

Documents Required

The documents that you need to submit for a non collateral education loan for abroad are as follows:

• KYC documents
• Passport photos
• Identity proof
• Proof of address
• Copy of the offer letter from the University and the fee structure
• Bank statements
• Past academic transcripts
• Proof of income (co-applicant)

Step Wise Process

The following steps shared by a study abroad consultant will simplify the loan application process for you:

Step 1: Eligibility

Check all the criteria that you need to fulfil in order to be eligible for a study loan without collateral.

Step 2: Enquiry

Make a list of all the potential lenders and compare them. To find the most suitable education loan without collateral, you can use factors like the expenses covered, moratorium period, etc.

Step 3: Application

Fill out the loan application form. Attach all the related documents with your form and submit it for verification.

Step 4: Processing

In this step, the documents and background of the applicant are verified. Along with that, officials also evaluate your creditworthiness.

Step 5: Disbursement

Once the application is approved, the collateral free education loan amount is disbursed. Also, the sum for tuition fees is directly disbursed to the university.

Conclusion

In conclusion, this blog discusses the various expenses covered by a non collateral loan. In addition, it provides the details on the requirements and how you can apply for a study loan for abroad studies without collateral. If you want more guidance with your student loan, then our expert counsellors are always ready to help you out. With their assistance, you can easily apply for a student loan.

Also read: Education Loan For UK.

FAQs:

1. How much loan can I get without collateral for studying abroad?

The amount that you can receive on an education loan without collateral ranges between INR 40L to 75L. The highest sum of money that you can borrow depends on the bank that you select to apply for a study loan.

2. Which private bank is best for education loan without collateral?

There are various private banks that provide an education loan for abroad studies without collateral, however, the top ones include the following:

• ICICI bank
• IDFC
• IDBI bank
• SBI
• Axis and more

3. What are the interest rates for non collateral education loans?

The interest rates for non collateral education loans usually range between 10.50% to 14%. Moreover, these rates can vary from bank to bank.

4. What documents are required for a non collateral loan?

If you wish to apply for an education loan without collateral, the following are some documents needed for that:

• Offer letter from the University
• Academic document
• Employment document
• Address proof
• Account details, etc.

5. Can I get a non collateral loan for diploma or certificate coursesabroad?

If you want to apply for a collateral free education loan for a diploma or certificate course, then it will depend on the type of program and the bank that you are selecting.