Education Loan for Abroad Studies Without Collateral

    Updated on: 30 May 2023

    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 without collateral for abroad studies 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 education loans without collateral 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. 

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    Difference between education loan with and without collateral

    Let’s start with some basics that is by understanding the difference between loans with collateral and loan without collateral. The difference between them are listed below -

    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

    Advantages of education loan without collateral

    There are several advantages that you would be able to enjoy in case you decide to take an education loan without collateral. The advantages are - 

    • Simplified documentation process- Since the collateral is not involved, the documentation process is less than the secured loan. You would only need to submit documents which would be very easy for you to arrange and submit. 
    • Flexibility to choose your institution- Generally, you will find that most lender has developed a list of universities/colleges or courses for which they can provide education loans. This used to be a problem earlier but now there are multiple lenders and they have a pervasive list, therefore it has provided you with an opportunity to study wherever you want.
    • Co-Applicant act as a viable alternative- No worries about risking collateral if you have an eligible and willing financial co-applicant. The co-applicant must have good creditworthiness that meets your lender's requirements. A perfect co-applicant would act as an alternative to collateral.
    • Complete coverage of study-related costs- The amount granted through unsecured loans is often quite impressive. They consider all of your overseas study costs. Almost all the expenses are covered in case your application profile is good and your loan ask is under the maximum loan cap of the lender.


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    Lenders that provide education loan without collateral

    The different lenders that can provide you with education loan without collateral are listed below. The table has been bifurcated into two sections which initial section will provide you with information about the lender that can provide you education loan without collateral but a financial co-applicant is required. The later section will have those lenders that can provide you education loan without collateral and co-applicant.

    Lender Name

    Loan Amount

    Interest Rate

    Co-applicant required


    Up to 7.5 Lakhs INR

    10.65% - 11.50%


    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%


    Up to 50 Lakhs INR

    11.50% - 13.25%

    HDFC Credila

    Up to 65 Lakhs INR

    11.25% - 13.00%


    Up to 75 Lakhs INR

    12.50% - 13.50%


    Up to 65 Lakhs INR

    11.25% - 14.00%


    Up to 60 Lakhs INR

    12.00% - 14.00%

    Co-applicant not required

    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%

    Eligibility for education loan without collateral

    There are certain eligibility requirements that you would have to meet to ensure that you can get an education loan without collateral. The eligibility may differ depending on the lender but some common parameters are -

    • 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. 
    • 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.
    • Chosen country, university, and course - Almost all the lender that is providing you with education loan without collateral 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. 
    • 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.


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    Documents required for education loan without collateral

    Given below is a generalized list of documents required for a study abroad education loan without collateral.

    Documents required from the applicant - 

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

    Documents required from the co-applicant -

    • 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-applicants -

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

    Salaried co-applicants - 

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

    How to apply for an 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.

    1. Check Eligibility: Begin by visiting the GyanDhan website or using the loan eligibility form to determine if you meet the criteria for getting an education loan without collateral. This may include factors such as academic qualifications, admission to a recognized institution abroad, and creditworthiness.
    2. Loan Application Processing: An ELC (Education Loan Counselor) from GyanDhan will explain the loan process and provide a personalized document checklist based on your profile. Once you submit your application, your loan application will start with 2 of the best-suited lenders for you.
    3. Documentation Submission & Verification: Collect and submit all required documents from the checklist, including academic and income records. Ensure documents are accurate and meet the bank's requirements. Lenders will verify your application, involving credit checks, admission details, financials, and other relevant information.
    4. Loan Approval & Sanction: Once everything is done from the lender’s end you will get a loan approval notification with the approved amount on which you can sign your agreement if satisfied to finalize the process and get the required amount disbursed.


    Discover your education loan options with GyanDhan Click Here

    How can GyanDhan help you get an unsecured education loan?

    There is a double benefit to applying for your loan through GyanDhan;

    • 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 would come to lending options.
    • 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.
    • 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. 
    • 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 you?

    As a student who wants to study abroad, 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 limited choices available. Thus we are providing you with a priority overview of how to choose the best lender. 

    1. 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.
    2. 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.
    3. In case you need a loan above 50 Lakhs INR then you can go for NBFCs, their interest rate maybe be higher than private banks but the loan amount can go up to 70 Lakhs INR.
    4. 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.


    Calculate your Education Loan EMI Click Here

    Now that you have all the information related to getting an education loan 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 for an education loan without collateral. All you have to do is check your loan eligibility and sit stress-free.

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    Frequently Asked Questions

    Which banks provide education loans without collateral?

    There are many banks that provide education loan without collateral, some of the most popular are Axis Bank, ICICI Bank, and IDFC FIRST Bank.

    Can I get an education loan without collateral for the USA?

    Yes, you can get an education loan without collateral for the USA as well all you got to have is a good application for applicant and co-applicant.

    Which type of lender is best for getting an education loan without collateral?

    The best type of lender to get an education loan is private banks. After private banks, your next preference should be NBFCs. Public banks are generally not given priority because when it comes to education loan without collateral the loan amount is less as compared to other lenders. 

    How can a lender provide a loan without collateral and co-applicant?

    In cases where the lender does not require a collateral and a co-applicant, they mostly check your 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.

    First published date: 19 Nov 2016


About author

Ankit Mehra
Ankit is the co-founder and CEO of GyanDhan. An IITK / IESE alum who previously worked at Capital One / Credit Suisse, his aim is to equalize and expand access to higher education. His interests include playing football (soccer), and basketball, trading/investing the limited money that he still has, and discussions on economics / politics.

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GyanDhan is India's first education financing marketplace.

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