Education Loan for Abroad Studies 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. 

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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. 

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. 

• Public sector banks - SBI and UBI.
• Private sector banks - Axis Bank, ICICI Bank, and IDFC FIRST Bank.
• 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.

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.

 

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-

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

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

• 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 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. 
• 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 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

• 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 for study abroad loan without collateral

• 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 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.

• 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.
• 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.
• Submit and Verify Documents: Gather and submit required documents, including academic and income records. Lenders verify your application, reviewing admission details, financials, and more.
• 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.