How to Get an Education Loan If Your Admission Is From a Low-Ranked College?

Many students planning to study abroad consider various factors like course quality, country, cost of living, visa rules, and future job opportunities. University ranking is also an important consideration, but it often creates unnecessary fear of rejection when it comes to education loans.

Several reputed universities in countries like Germany, South Korea, Denmark, and parts of Europe fall between QS ranks 500–1000 or even lower. Similarly, in Canada, many diplomas and short-term programs are offered by colleges that are ranked beyond 1000 or not ranked at all. Because of this, students often believe they are not eligible for an education loan. 

But, this is half true because some universities aren’t eligible for a few lenders, while they are eligible for others. Thus, an education loan for an unlisted university is absolutely possible. Even students studying in average or unlisted universities abroad or low-ranked institutions within India can also secure education loans. Students just require the right guidance and the names of lenders. 

This blog explains how to get a study abroad loan for a low-ranked college in India and abroad. We have also included the list of lenders funding unlisted institutions and how you can improve your chances of loan approval.

How Lenders Categorize an Abroad University Based on Rankings

Every student refers to the QS World Ranking while they are applying to universities. Lenders also consider these global rankings given by QS or THE. But they also include various other factors while preparing the eligible college list. 

What is that? They also consider the demographics of the university because it helps lenders evaluate your earning potential for the following years. Tier 1-2 universities are often given priority; thus, if a low-ranked university is located in a Tier 1-2 city, it is eligible. If they are located in a Tier 3 city, then the course and your academic score are used to evaluate the interest rate and the loan amount. 

All these parameters are considered, and then the loan for non-premium college abroad is sanctioned, and the terms are decided. General categorization without including your academic scores is mentioned below.

University Ranking Vs Loan Type:

Remember: An education loan for average university isn’t rejected outright, but it does influence the terms and conditions of the loan agreement. 

How Lenders Categorize Universities in India Based on Rankings

Some students also consider an education loan if they are planning to study in India. But, for India, lenders do not rely on popular rankings like NIRF, NAAC, QS, or Times Higher Education as they do for study abroad loan low-ranked college. Instead, in India, they use an internal university categorisation system to assess risk and repayment potential.

What Loan Terms Are Influenced If Your University is Low-Ranked?

When applying for an education loan for a low-ranked college in India & abroad, lenders evaluate the overall risk associated with your profile. But a low-ranked university can influence certain loan terms and conditions.

Below are the key loan terms that are commonly affected for both Study in India loans and study abroad loans.

Loan Amount:

For low-ranked or average universities, the sanctioned loan amount may be limited and covers mainly tuition and essential academic costs. Higher loan amounts are usually approved only with collateral support. This applies to both Indian institutions and overseas colleges that are not on a lender’s preferred list.

Interest Rate:

This is a crucial number in the loan agreement, and a 0.5% fluctuation in this can result in lakhs. The university rankings can significantly impact this number (interest rate). A strong financial profile (co-applicant) can help negotiate better rates.

Loan Disbursement Structure:

Disbursement terms may be more structured, such as funds are released semester-wise or annually. Students’ disbursement may depend on academic progress, and additional documentation may be required during the course. This helps lenders manage long-term risk.

Repayment Structure:

The education loan for an average university abroad doesn’t offer all four repayment options available. Many lenders, such as Credilla, HDFC Bank & ICICI Bank, ask for full simple interest or full EMI as repayment. Some lenders, such as Prodigy Finance and Avanse, offer a partial repayment option based on the co-applicant's profile, and a full moratorium can be enjoyed only if the student gets a collateral-based education loan.

Read More: Education Loan Repayment Strategies 

How to Maximise Your Loan Approval Chances for Unlisted Universities?

If your university is not ranked or is considered low-tier, follow this checklist:

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  Apply for a secured education loan instead of an unsecured education loan.
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  Choose a job-oriented course.
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  Apply through NBFCs or private lenders.
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  Strengthen your co-applicant profile.
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  Maintain a clean CIBIL score.
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  Prepare proper admission and fee documents.

So, university ranking plays an important role in deciding the loan type and loan terms for a study abroad loan from a low-ranked college in India. However, it is not the only deciding factor. If one factor of your profile, such as university ranking, is weak, you can still strengthen other areas like collateral, co-applicant profile, course employability, and future earning potential to improve your chances of loan approval. 

Collateral As Security to Strengthen the Loan Application

Lenders are usually doubtful about repayment when they offer a loan for a non-premium college. However, by adding collateral to the loan, a student can reduce the risk and improve the chances of approval. It also helps in securing a lower interest rate.

Different types of collateral can be used as security; however, the value of collateral is influenced by the type. Some of the accepted collaterals are:

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  Residential or commercial property
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  Fixed deposits
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  Land (conditions apply)

How Does Collateral Affect the Low Rankings of Universities?

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  The university ranking becomes less important because you are providing security, which lessens the lending risk.
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  Public sector banks approve the education loan for unlisted universities at a low interest rate.
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  Collateral value can help students avail higher loan amounts. 

What Courses Are Preferred for Collateral Loan?

For students planning to study at a low-ranked university, getting an education loan comes with a challenge. In this scenario, lenders focus more on risk mitigation. Thus, a course with strong job prospects can significantly improve loan approval chances. Programs that offer practical skills and a clear return on investment (ROI) are usually preferred. Some them are listed below:

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  MS in Canada (from average colleges).
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  Engineering or technical programs in Europe.
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  Diploma or applied programs abroad.
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  Management courses such as MBA, MiM from European universities.
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  BTech & MBA courses belonging to Tier 1 & 2 cities in India. 

Strong Co-applicant With Good Income 

A co-applicant is a person who signs the loan agreement with you and is equally responsible for the repayment. There are two scenarios in which you can use a strong co-applicant profile.

First, if your collateral is insufficient for the required loan amount or better loan terms, you can consider a semi-collateral loan. In this case, a co-applicant can strengthen your application and even help you secure a higher loan amount.

Second, if you don’t have collateral, then you can get an unsecured education loan based on the co-applicant’s income. This can balance the risk of a low-ranked university.

Lenders prefer co-applicants who:

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  Have stable income (minimum INR 35,000)
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  Maintain a good credit score (690 & above)
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  Show consistent employment history (2-years of ITR)

A strong co-applicant can:

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  Increase loan eligibility
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  Improve approval chances
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  Help secure better repayment terms
   

This applies to both study abroad loans and study in India loans, especially when the institution is not considered top-tier. However, for India, some lenders have made a co-applicant mandatory.

Read More: Role of a co-applicant

Course & Future Earning Potential Improves the Chances of Loan Approval

Some students don’t have any kind of collateral; thus, they look for an unsecured education loan for overseas education. If you are among those who are on the list and are looking for an education loan for a non-premium college abroad.

Then you need to look for the employability, which sometimes isn’t related to the university's reputation. A few courses that help students get higher-paying jobs regardless of their university are:

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  STEM programs (Engineering, Data Science, AI, IT)
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  Healthcare and Nursing
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  Management programs with a strong placement history
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  Skill-based diploma programs in Canada and Europe
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  MBBS & MBA programs from European & Asian Countries (including India)

But, before you get enrolled in the following courses, ensure you research the job market demand in that country. This is crucial for students seeking an education loan for an average university abroad, where career outcomes matter more than brand value.

Explore More: Popular Courses Abroad

NBFC as Your Education Loan Lender

NBFCs (Non-Banking Financial Companies) are often the best option for students from unlisted or low-ranked universities. They have a wider list of approved universities with a faster processing time. One of the best benefits of NBFCs is their willingness to fund diploma and pathway courses, and have less dependency on global rankings.

An NBFC loan for a low-ranking university is commonly used for:

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  Canadian colleges
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  European private universities
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  Specialized or niche programs

Many students deny an NBFC loan, saying they charge a higher interest rate. But, when compared, their interest rates seem higher than public banks (but without collateral, this deal seems quite fair).

Read More: Education Loans by NBFC’s

How to Upgrade Your University Choice?

Getting admission from a low-ranked university does not mean your options are limited. In many cases, students apply without fully understanding which universities truly match their academic profile, test scores, budget, and career goals. You can use following ways to upgrade your university.

Re-evaluate Your University Options:

Many students miss out on better-ranked universities simply due to incorrect shortlisting. To avoid this, review requirements, intake flexibility, and acceptance rates within the same budget.

Strengthen Your Profile:

Sometimes by improving the test scores, adding relevant internships, certifications, or work experience can significantly boost your chances at better-ranked institutions. To enhance your profile use Admit Predictor tool, which helps students identify weak points in their profile. 

Consider Alternative Intakes:

Some universities offer higher acceptance rates in spring or secondary intakes. But, to know this you need an expert beside you, consider Consultant Finder it can:

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  Connect you with verified overseas education consultants.
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  Get personalised guidance on university selection.
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  Understand admission timelines and documentation.

Conclusion

If you’ve reached this blog after already securing admission and are now focused on arranging funds, you can set your worries about university ranking aside. For both India and abroad, education loan eligibility depends on much more than just rankings.

At GyanDhan, we help students identify and structure the right education loan options for low-ranked and unlisted universities, whether you plan to study abroad or within India. The key lies in understanding eligibility criteria and choosing a loan structure that fits your profile.

Check your education loan eligibility for Study Abroad or Study in India today. Let us help you match your university and course with the right lender, so funding doesn’t become a roadblock to your education plans.

Frequently Asked Questions