Study Abroad Education Loan Without Collateral
Education Loan

Education Loan for Abroad Studies without Collateral

Education Loan for Abroad Studies without Collateral

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Learn how to get an education loan without collateral. Check eligibility, interest rate, to get non collateral loan for abroad: UBI, Axis, ICICI and 8 more.

GyanDhan

Rohit Gidwani

Updated on: 07 Nov 2023

How to Get an Abroad Education Loan Without Collateral

Are you a student who dreams to study abroad, but does not have collateral to pledge for a secured education loan? Do not worry. Education loan for abroad studies without collateral is a possible thing. With varying loan limits and conditions, education loans for abroad studies display an array of smart options for students from diverse financial situations. 

The majority of lenders who provide non-collateral education loan for abroad require a financial co-applicant, as will be discussed later in this blog. However, international lenders like MPOWER Financing and Prodigy Finance can provide education loans even without a financial co-applicant. In addition, there are public banks, private banks, and NBFCs that can also offer education loans without collateral, with varying loan amounts. Therefore, this blog will provide a comparative overview of all these lenders, which will help you make an informed decision. 

 

Check Your Education Loan Eligibility

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Differences in education loans: with collateral vs without Collateral

Let’s start with some basics that is by understanding the difference between abroad education loan without collateral and with collateral

Basis of difference Education loan with collateral  Education loan without collateral

Requirement of Collateral

Property or fixed deposit, as security for the loan

Does not require collateral, but may require a financial co-applicant

Loan Amount

Generally higher depending on the value of the collateral

Lower compared to loans with collateral

Interest Rates

Interest rates may be low due to security pledged

Interest rates may be high due absence of security

Eligibility Criteria

Relaxed as the collateral serves as security

Stringent as the lender has to rely on the borrower's creditworthiness and co-applicants financial stability

Loan Processing Time

More due to documentation, property valuation and more. 

Less due to relaxed requirements

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Lenders that provide abroad education loan without collateral

The different lenders that can provide you with non-collateral education loan for abroad are listed below. 

  • list items Public sector banks - SBI and UBI.
  • list items Private sector banks - Axis Bank, ICICI Bank, and IDFC FIRST Bank.
  • list items NBFCs - HDFC Credilla, Avanse, Auxilo, and Incred.

Now that you know all the lenders let’s have a look at their respective education loan amounts and interest rate. The table below provides you with information about lenders that can provide you with education loan for abroad studies without collateral but a financial co-applicant is required.

Lender Name Loan Amount Interest Rate

SBI

Up to 7.5 Lakhs INR

10.65% - 11.50%

UBI

Up to 40 Lakhs INR

9.80% - 11.30%

Axis Bank

Up to 50 Lakhs INR

11.00% - 11.50%

ICICI Bank

Up to 50 Lakhs INR

10.85% - 12.50%

IDFC FIRST Bank

Up to 50 Lakhs INR

11.50% - 13.25%

HDFC Credila

Up to 65 Lakhs INR

11.25% - 13.00%

Avanse

Up to 75 Lakhs INR

12.50% - 13.50%

Auxilo

Up to 65 Lakhs INR

11.25% - 14.00%

Incred

Up to 60 Lakhs INR

12.00% - 14.00%

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Lenders that provide abroad education loan without collateral and co-applicant

The table below mentions international lenders that can provide you education loan for abroad studies without collateral and co-applicant.

Lender Name Loan Amount Interest Rate

MPOWER Financing

Up to 100,000 USD

12.99% - Graduate Programs


13.99 - Undergraduate Programs

Prodigy Finance

Up to 100,000 USD

12.00% - 14.00%

 


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Eligibility for abroad education loan without collateral

There are certain eligibility requirements that you would have to meet to ensure that you can get a non-collateral education loan for abroad. The eligibility may differ depending on the lender but some common parameters are-

  • list items Academic profile of the client
  • list items Co-applicant finances
  • list items Chosen country, university, and course
  • list items Test scores

Let’s discuss the eligibility for abroad education loan without collateral in detail

  • list items Academic profile of client - Since the bank does not demand collateral as security, your academic excellence is one of the primary criteria for an unsecured education loan. The reason behind this is that apart from your co-applicant’s income your estimated earning potential is checked which can differ based on your academic performance in the future. Your academic performance for the future can only be forecasted through your past performances. 
  • list items Co-applicant finances - The co-applicant must have a very good CIBIL score and meet the prescribed requirements. They should also meet the minimum income level as well which can be 30,000 INR - 40,000 INR (without obligations) depending on the lender.
  • list items Chosen country, university, and course - Almost all the lender that is providing you with non-collateral education loan for abroad has developed a list of universities/colleges and courses. All you have to ensure that your target country, course, and university/college fall in on their lists. 
  • list items Test scores - The scores you obtained in the English proficiency tests and other standardized tests, like IELTS, TOEFL, GRE, SAT, etc., shall be above average or meet the mark prescribed by your lender.  

Calculate your Education Loan EMI

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Documents required for education loan for abroad studies without collateral

Given below is a generalized list of documents required for a non-collateral education loan for abroad.

Documents required from the applicant for study abroad loan without collateral

  • list items Loan application form
  • list items Identity proof - PAN Card, Passport, Voter ID card. 
  • list items Address proof - a recent copy of the telephone bill, electricity bill, or water bill. 
  • list items Passport 
  • list items Past academic record - 10th, 12th, undergraduate mark sheet, test scores of entrance tests like GRE, TOEFL, IELTS, etc. 
  • list items Proof of admission - you can submit a conditional offer of admission as well. 
  • list items Statement of expenses - the entire cost of education. 
  • list items Passport-size photographs 
  • list items Loan account statement of one year, if there are any previous loans taken from any lender. 

Documents required from the co-applicant for study abroad loan without collateral

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

Self-employed co-applicants -

  • list items Business address proof 
  • list items Last 2 years IT returns 
  • list items TDS Certificate 
  • list items Certificate of Qualification 
  • list items Bank account statement of the last 6 months 

Salaried co-applicants - 

  • list items Salary slips of last 3 months 
  • list items Copy of Form 16 for the last 2 years or copy of IT Returns for the last 2 years.
  • list items Bank account statement for the last 6 months.
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How to apply for an abroad education loan without collateral via GyanDhan

The process of starting a loan application without collateral is quite simple. All you need to do is follow the below-mentioned steps.

  • list items Check Eligibility: Visit GyanDhan's website or use the loan eligibility form to determine if you qualify for a study abroad loan without collateral. Criteria include academic qualifications, admission to a recognized foreign institution, and creditworthiness.
  • list items Apply and Consult: An Education Loan Counselor (ELC) from GyanDhan will guide you through the process, providing a tailored checklist. Submit your application, and the system will match you with two suitable lenders.
  • list items Submit and Verify Documents: Gather and submit required documents, including academic and income records. Lenders verify your application, reviewing admission details, financials, and more.
  • list items Loan Approval: Upon lender approval, you receive a notification with the approved amount. If satisfied, you can finalize by signing the agreement, leading to the disbursal of the required funds.
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How can GyanDhan help you get a study abroad loan without collateral?

  • list items Multiple options: We have partnered with several lenders in the market. Thus, we would be able to provide you with multiple options in one place when it comes to lending options.
  • list items Personalized suggestions: We evaluate your details and suggest the lender that will best serve your purpose and needs. Our Education Loan Counselors will discuss the loan options with you and help you apply for the loan.
  • list items Quick resolution to problems: If any problem arises, it is quickly resolved by contacting the concerned official so that your loan application is processed quickly and smoothly. 
  • list items Free of cost: All these services from GyanDhan in relation to your education loan are provided free of cost to you.  

Which is the best lender for education loans to study abroad without collateral?

As a study abroad candidate, your main priority should be finding education loans with lower interest rates and the necessary funding. From the perspective of a student, we recognize that selecting the right option is challenging due to the choices available. Thus we are providing you with an overview of how to choose the best lender. 

Public Sector Banks > Private Banks > NBFC > International Lenders

  • list items Your first priority should be public banks as they can provide you with very good interest rates. However, the loan amount that you can get from them is low for unsecured education loans.
  • list items Private banks should be your next priority as the loan amount provided by them can go upto 50 Lakhs INR and they will be able to provide you with reasonable interest rates.
  • list items In case you need a loan above 50 Lakhs INR then you can go for NBFCs, their interest rate may be higher than private banks but the loan amount can go up to 70 Lakhs INR.
  • list items International lenders will be a great last option especially when you do not have a proper co-applicant. They can provide you with loans upto 100,000 USD but the interest rate will be higher as compared to all the other lenders.


Now that you have all the information related to getting an education loan to study abroad without collateral, you will be able to make an informed decision and choose the best lender for you. Do not worry if you are still confused, let GyanDhana help you in choosing the best lender. All you have to do is check your loan eligibility.

 

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FAQ's

Which banks give abroad education loan without collateral?

Several banks provide education loans without collateral for studying abroad. Some notable examples include:

  1. list items State Bank of India (SBI)
  2. list items Union Bank of India (UBI)
  3. list items Axis Bank
  4. list items ICICI Bank
  5. list items HDFC Credila

It's important to note that the availability of these loans and their specific terms may vary. Check your loan eligibility and determine the best loan option based on your academic and financial profile. 

Can I get a US education loan without collateral?

Yes, you can get a US education loan without collateral as well all you got to have is a good application for applicant and co-applicant. The loan amount can vary but for a general idea -

  • list items Private Banks - up to 50 Lakhs INR
  • list items NBFCs - up to 70 Lakhs INR
  • list items International Lenders - up to USD 100,000

How to get an education loan for abroad studies without collateral and a co-applicant?

In cases where the lender does not require collateral and a co-applicant, they mostly check your academic profile, the course and university you have opted or, and potential estimated future earnings. They have a tight list of universities/colleges in which they are sure you would be able to earn good and make repayment on the loan. Thus this is how they are able to provide you with a loan. 

How much education loan can I get without collateral?

One of the best types of lenders for education loans without collateral is private banks. Apart from that, you can also get an education loan without collateral from NBFCs and International lenders. Now coming to the amount, can maximum limit for private banks and NBFC ranges somewhere between 50 - 70 Lakhs INR, and for International lenders, you can get a loan upto USD 100,000.

Is there a processing fee associated with an education loan without collateral?

Yes, you will have to incur processing fees when you take an education loan without collateral. Depending on the lender you may be asked to pay 0.5% - 1.5% of the loan amount as the processing fee. 

Reasons why your education loan without collateral is being rejected?

A few reasons that lead to the rejection of your application to get an education loan without collateral are - 

  • list items Lenders majorly prefer to fund postgraduate programs. In case you apply for an undergraduate program and the targetted university is not on the approved list, then it can be rejected. 
  • list items Improper FOIR i.e. Fixed Obligation to Income Ratio can get your application for an education loan without collateral rejected. Usually, lenders require approx 35,000 - 40,000 INR as minimum income without obligations.