Education Loan Without Collateral For Abroad Studies

    Updated on: 10 Jan 2023


    Are you a student who dreams to study abroad, but do not have enough 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.

    Education loans without collateral, also known as unsecured loans are provided by a few banks, and some private lenders like NBFCs (Non-Banking Finance Companies). Public-sector banks only provide unsecured loans up to Rs. 7.5 lakhs, but private lenders provide loans for higher amounts depending on your and the co-applicants profile.

    Which are the top lenders for education loans without collateral?

    GyanDhan has the major players in the education abroad loan market as its partners, including SBI, Bank of Baroda, Axis Bank, ICICI, Incred, HDFC Credila, Prodigy Finance, Auxilo, MPOWER Financing & Avanse. Partnership with key players from the public and private financial sectors helps us to bring the best-suited education loans to you.

    Why apply for an education loan?

    Education loan for overseas study is a great financial support for you. The overall cost that will be incurred, including the fees for studying abroad, depends primarily on the country you plan to choose. For example, an MS in the USA will typically cost around the US $65,000- $70,000. 

    Considering the high exchange value and the growing cost of higher education,  many Indian students might need to apply for education loans, especially those from mid-income families.  Apart from this, it is a smarter financial move to take an education loan rather than spend your savings.

    Check Your Education Loan Eligibility for Free Click Now

    Why is collateral usually required for an education loan?

    Collateral security is usually required when the applicant needs a loan amount of more than 7.5 lakhs from public sector banks.
    A number of public sector banks, private banking institutions, and financial corporations offer different kinds of education loans at varied rates of interest. Most of them provide loans up to 7.5 lakhs without any collateral security. However, for a credit limit crossing 7.5 lakhs, most lenders ask for a deposit of any asset as collateral.

    • The collateral is asked to handle the NPAs i.e. the Non-Performing Assets in case the borrower defaults on the loan payments.
    • Involving collateral in business poses a risk, and many get uncomfortable at the thought of taking a loan against their personal assets as security.


    But worry not, GyanDhan is India’s leading education loan startup. We make it possible to get a study abroad education loan with or without collateral from Indian banks and non-banking financial institutions!

    What are the eligibility criteria for an education loan without collateral?

    • Marks matter a lot!- Since the bank does not demand collateral security, your academic excellence is the primary criterion for an unsecured education loan.
    • Co-applicant’s banking Strength- The co-applicant must have a very good CIBIL score and meet the prescribed requirements.
    • Entrance test scores- The scores you obtained in the English proficiency tests and other entrances, like IELTS, TOEFL, GRE, SAT, etc., shall be above average or meet the mark prescribed by your lender. 


    The criteria mentioned above are not equally applicable to all lenders. An applicant must check well with the lender before applying.

    What are the existing education loans to study abroad offered by banks?


      Loan Amount without Collateral  

    Interest Rate Range

    Processing Fee


    Up to INR 50 lakhs

    13% - 15.20%

    Up to 20 lakhs- 15000+GST (refundable)
       Above 20 lakhs- 0.75% of loan amount + GST (Non-refundable)  


    Up to INR 40 lakhs


    1-1.5 % of the loan amount


    Up to INR 50 lakhs


    1% - 2% of the loan amount


    Up to INR 40 lakhs


    1% to 2% of the loan amount

    HDFC Credila

    Up to INR 50-60 lakhs

      12.30 % + *spread (11.75%-13%)  

    1% of the loan amount

      IDFC First Bank  

    50-75 lakhs


    1.5 % of the loan amount


    ***Spread or Interest Spread: It is the difference between the interest rate a bank pays to depositors and the interest rate it receives from loans to customers.

    Our motto is to make higher education accessible to a maximum number of students, so we have tied up with all kinds of lenders from the public to private. There are various Banking and Non-Banking financial organizations that offer education loans at differing interest rates. For our readers, we are listing a couple of examples of unsecured education loans:

    • Axis bank, a prominent private bank, is offering education loans up to INR 75 lakhs with collateral and INR 50 Lakhs without collateral. The interest rates vary from 13%-15.20% depending upon the applicant’s profile. Applying via GyanDhan ensures you get the minimum possible rates. The loan repayment time for Unsecured loans from Axis bank is 7-10 years.
    • InCred is an NBFC that offers education loans with collateral up to 1 Crore for abroad studies and without collateral up to INR 40 lakhs (can be increased with exception). The interest rates broadly range from 11.5% to 15% depending upon the loan amount.  5-12 years is the loan tenure for Incred Unsecured loans.
    • Avanse is an NBFC, established in 2013, which provides both secured as well as unsecured education loans. For unsecured loans, Avanse provides education loans starting at INR 1 lakh and can give up to INR 50 lakhs. The maximum loan amount can be increased depending on the profile. The rate of interest of Avanse education loans is Avanse Base Rate + *Spread. The current base rate is 12.30%. Spread is floating and is calculated on the basis of the applicant’s profile. The interest rate broadly ranges from 12.65% to 13.65% , and the loan repayment period for Avanse can be up to 15 years.
    • Auxilo, an NBFC established in 2017, provides education loans to study in India as well as abroad. The lender has no cap on the minimum amount that can be borrowed. For unsecured loans, however, the maximum loan amount is INR 40 lakhs. Case-level exceptions are possible. Auxilo has a floating interest rate that starts at 12% and can go up to 13.5%.  10 years is the loan tenure for Auxilo
    • HDFC Credila is another NBFC in the market that provides unsecured education loans to students. The maximum loan amount that can be borrowed is INR 50 lakhs, though case exceptions can be made. The interest rate offered by Credila is floating with HDFC Credila Benchmark Lending Rate + Spread. The interest rate offered by Credila starts at 12.30%. Loan repayment period for HDFC Credila is 12 years.
    • IDFC First Bank provides 50-75 lakhs for overseas education with 11% interest rates. Since 2018, IDFC First Bank has been a recent key player in the industry. The period to repay the unsecured loan is up to 12 years.  

    As mentioned above, such private banking entities and NBFCs offer education loans without collateral.  But since their application procedure and approval policy are lengthy, you can apply to these lenders through our portal to save your time, money, and motivation.

    Once you apply through GyanDhan, forget the hardship of reaching out to all these lenders; share your profile with us, and we will connect you with the right lender.

    Check Your Education Loan Eligibility for Free Click Now


    What is the procedure to avail student loans from foreign Institutions?

    International Lenders - Overview


     Loan Amount without Collateral

    Interest Rate Range

    Processing Fee

    Loan Tenure



     Varying 11.99% per annum for graduate 
    Variable 10.49% for undergraduate

    5% onwards of the loan amount

    10 years.


    Up to 75 lakhs

    13.23 % per annum

    2-4% of the loan amount

    7-20 years.


    The procedure to avail student loans from foreign institutions involves a co-signer. Despite that, the loan application process is almost similar to the loan application in India. You can also avail of Education loans from Foreign Lending institutions offered to international students.
    The application procedure for international loans is simple in some cases. However, here the borrower needs to have a co-signer as a guarantor who should be

    • A  permanent citizen of the respective country
    • Having  a good credit record
    • Obligated to repay the loan if the borrower defaults.

    Most often, it is difficult to find a co-Signer in a foreign country. Having said that,  a few foreign lending organizations, like MPower Finance and Prodigy Finance,  offer student loans without requiring co-signers. However, the processing fee is typically quite high (2.5%-5%), and the dollar-based interest rates are high as well (10%-12% typically).

    For example, if you assume that 10% in USD is a low-interest rate - think again! 10% in USD is comparable to 15% in INR due to some factors.

    What are the advantages of an education loan without collateral?

    • It's Quicker! - Since there is no need to process the collateral details, the long time needed for that is saved in an unsecured loan. Only the time to fetch and verify the co-applicant’s details is mainly required.
    • No heaps of papers.- Since the collateral is not involved, the documentation process is lesser than the secured loan. You don’t need to submit or prepare the documents of collateral.
    • Study where you want- No limit for college or courses, except for public and private banks. These banks normally keep a list of universities or programs for education loans abroad. On the other hand, with an unsecured loan, you can study the course you like anywhere, provided that you submit the required study details.
    • Co-Applicant is the game changer.- No worries about risking collateral if you have an eligible and willing co-applicant. The co-applicant must have a very good CIBIL score that meets your lender's requirements. A perfect co-applicant would do most of the work for your loan sanction (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. The student can study anywhere without concerns over expenses.

    How to get an education loan without a collateral?

    Private banking entities such as Axis and ICICI Banks and Non-banking finance companies, such as InCred Finance, HDFC Credila, Auxilo and Avanse offer education loans without collateral.  But their application procedure and approval policy are unclear.

    Now, this is where GyanDhan comes into the picture. It facilitates the sanction of education loans without collateral at low-interest rates (starting at 10.5%) - in a transparent and quick application process.  Fee!

    • We pre-assess your profile to determine which lender’s product fits you the best and then recommend that product to you.
    • What’s more – GyanDhan Doesn’t Charge Any Processing Fee! Also, if students can afford to keep their assets as collateral, then interest rates for loans availed from public banks through GyanDhan start from  10.5% for boys and  10% for girls.
    Calculate Your Education Loan EMI for Free Check Now

    What are the factors considered for an education loan without collateral?

    The process to get an education loan without collateral is similar to the one with collateral. You need to fulfill the eligibility criteria , submit the required documents, fill in the application, and wait for the loan sanction letter. The process is usually shorter than secured loans since the collateral value needs to be evaluated by the lender, which requires more time and documentation. 

    • Your academic profile which includes school and college marks, GRE, IELTS, and GMAT scores, as well as employability potential.
    • Co-applicant’s income and CIBIL score in order to see whether the loan can be repaid in time or not, since there’s no collateral involved.
    • Country/Course/University/Degree that you want to pursue.

    What documents are required for study abroad 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 filled completely and correctly.
    • Identity proof - PAN Card, Passport, Voter ID card. 
    • Address proof - a recent copy of 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 year’s 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 of the last 6 months.

    Which is the best option for you?

    As a study-abroad aspirant, your focus must be on the lower interest rate with the required amounts in education loans. From a student’s perspective, we understand that it is not very easy to ‘choose’, because the available options are often limited. 
    From our experience and research, here are the best recommendations for you to choose the right lender:

    • The best option for an abroad education loan is a public bank. Loans from a public bank give the best interest rate for you. The only problem is that the limit is 7.5 lakhs for unsecured education loans. 
    • Your second priority can be the private banks. They also offer comparatively lesser interest rates. The maximum amount they give is greater than the public sector banks.
    • NBFCs could be the third option. Loans from NBFCs might cover the total amount required for you.  
    • International lenders can be the best option when:
      • Your study costs are high
      • You didn’t get a loan from the three other lenders
    • International lenders have high-interest rates but generously cover any expensive study program.


    Taking a loan is a liability in itself, and students deserve a hassle-free process. GyanDhan helps you avail the best deal on education loans without collateral for studies abroad. Plus, we have launched a door pickup of documents at zero cost for the following cities: Chennai, Bangalore, Hyderabad, Vijayawada, Pune, Mumbai, and Delhi. This new door pickup service would substantially reduce your time and effort.


    How can GyanDhan help you get an unsecured education loan?

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

    Friendly Mediation: We have partnered with several lenders in the market.

    Personalized Suggestion: 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.
    • In case the rate of interest quoted by the lender is too high, we negotiate on your behalf.
    • If any problem arises, it is quickly resolved by contacting the concerned official. S so that your loan application is processed quickly and smoothly. 
    • All these services are provided free of cost to you.
    Check Your Education Loan Eligibility Check Now

    Frequently Asked Questions

    What are the requirements for an education loan without collateral for abroad studies?

    The following details are generally required for an unsecured loan for education abroad:

    • Loan amount
    • Country
    • Course
    • University
    • Age
    • Work Experience
    • Co-applicant
    • Co-applicants income
    • EMI
    • Backlogs
    • 10th,12th grade percentage
    • Test Scores of Entrance tests like GRE, TOEFL, IELTS, etc. 
    • Is there any running EMI
    • Applicant’s relation with the co-applicant
    • Last 3 years of ITR or last 2 years of Form16

    Can I get a 30 lakh education loan without collateral?

    Yes. Private banks, non-banking financial institutions, and international lenders give an unsecured loan of 40-50 lakhs. Organizations you can consult include private banks like Axis bank, ICICI bank, and IDFC First, and non-banking financial institutions like Avanse, Auxilo, HDFC Credila, and Incred. 

    There is no need to consider an international lender if your required amount is only 30 lakhs. Prodigy Finance and MPOWER Financing are international lenders for consultation if you need their help.

    Can I get a 7 lakhs education loan without collateral?

    Surely you can, that too, from a public sector bank with a minimum interest rate. SBI and Bank of Baroda lend up to 7.5 lakhs without collateral. The amount can rise to 40 lakhs or more for bank-identified premier institutes. 
    All private banks and non-banking financial companies give more than 7 lakhs, the maximum being 40-50 lakhs.

    Are the interest rates higher for education loans without collateral?

    Interest rates for loans without collateral (Unsecured loans) are higher than those with collateral security (Secured loans). Comparatively, public banks have the lowest interest rates, followed by private banks, non-banking financial companies, and international lenders.
    Note that international lenders have higher interest rates among the four. The typical interest rate for the lenders is:

    • Public banks: 10.5-12% 
    • Private banks: 11-15 % (varies with amount)
    • NBFCs: 11-15% + Spread (Difference between the interest rate a bank pays to depositors and the interest rate it receives from loans to customers)
    • International lenders: 11-15% (in terms of the respective international currency. It can be more on conversion)


    The loan-processing charge also differs in the same order. Public banks charge less and international lenders have a bigger processing fee.

    Would there be any processing fee levied for availing an education loan without collateral?

    Yes. There will be a processing fee for education loans. 

    For public banks, like SBI, the processing fee is zero for loans up to 10 lakhs and 10000+ GST+ property valuation charges for more than 20 lakhs. For NBFCs and international lenders, the processing charge falls between 1-5% or more of the granted amount. Public banks have a comparatively lesser processing fee, followed by private banks, NBFCs, and international lenders. 

    First published date:

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