Education Loan Without Collateral For Abroad Studies

    Updated on: 22 May 2022


    Education loan Without Collateral for abroad studies has made financing higher education easier. Many students aspire to get into their dream university abroad for their higher studies. However, due to the complicated process of getting an education loan for abroad studies, many of them settle for a job in India or choose an Indian Institute for further studies. Education loan without collateral is the perfect solution to the problem of financing abroad education.
    So why should students kill their aspirations because of financial shortage? To help students get admissions in their choice of university, GyanDhan has developed a novel strategy to facilitate education loans without collateral at low-interest rates to all aspiring students.

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    GyanDhan's Lender in the Market

    SBI, Bank of Baroda, Axis Bank, ICICI, Incred, HDFC Credila, Prodigy Finance, Auxilo, MPOWER FinancingAvanse - to bring the best-suited education loans to you. 

    In this blog, we will try to provide a general idea about educational loans, with a focus on unsecured education loans or education loan for abroad studies without collateral

    Why Apply for an Education Loan?

    The overall cost that will be incurred including the fees for studying abroad depends a lot on the country you plan to choose. For example, an MS in the USA will typically cost you around the US $65,000- $70,000. Considering the high exchange value and the growing cost of higher education, a considerable number of Indian students need to apply for education loans, especially 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 Click Here

    Why is Collateral Usually Required for an Education Loan?

    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 offer loans up to 7.5 lakhs without the need for arranging any collateral by the borrower.
    However, for a credit limit crossing 7.5 lakhs, most organizations 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.
    Collaterals are a risky business, 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 Existing Education Loans To Study Abroad Offered By Banks?

    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 for unsecured education loans:

    • Axis bank, a prominent private bank, is offering education loans up to INR 75 lakhs with collateral and INR 40 Lakhs without collateral. The interest rates vary from 11.25% to 13% depending upon the applicant’s profile. Applying via GyanDhan ensures you get the minimum possible rates. 
    • 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 11.75% to 16% depending upon the loan amount.
    • 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 40 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 12.65%. Spread is floating and is calculated on the basis of the applicant’s profile. The interest rate broadly ranges from 12.65% to 16%. 
    • 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 12.70% and can go up to 18%.  
    • 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 40 lakhs, though case exceptions can be made. The interest rate offered by Credila is floating with HDFC Credila Benchmark Lending Rate + Spread. The current base rate offered by Credila is 12.05%.

    GyanDhan has partnered with all of the above-mentioned lenders (and more) and will facilitate the loan application in low turnaround time with zero hiccups.

     

     

    How to Get an Education Loan without a Collateral?

    Private banking entities such as Axis and ICICI Bank and Non-bank finance companies, such as InCred Finance, HDFC Credila, and 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 11%, as on the date of this blog) - in a transparent and quick application process. 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 8.35% for boys and 7.85% for girls (these rates are as of the date of publishing this blog and may change with time).

    Calculate Your Education Loan EMI Check Here

    What is the Procedure to Avail Student Loans from Foreign Institutions?

    You can also avail of Education loans from Foreign Lending institutions offered to international students. The procedure to apply 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 with a good credit record. The Co-signer is obliged to repay the loan in the event of the borrower defaulting. Moreover, it is difficult to find a co-Signer in a foreign country.

    Having said that, there are a few foreign lending organizations, like MPower Finance and Prodigy Finance, that offer student loans without requiring co-signers. However the processing fee is typically quite high (2.5%-5%), and the $-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.

    Features\Lender

    Loan Amount

    Interest Rate Range

    Processing Fee

    Loan Tenure

    Axis

    Up to INR 40 lakhs

    11.25% - 13%

    Loan amount up to INR 20 lakhs - Nil
      Above INR 20 lakhs - 0.75% per lakh + GST  

    20 Years

    InCred

    Up to INR 40 lakhs

    Upto INR 10 lakh - 12.75% - 16%
      Above INR 10 lakhs - 11.75% - 16%  

    1% - 1.25% +GST

    10 Years

    Avanse

    Up to INR 40 lakhs

    Starts at 12.65%

    1% - 2% of the loan amount

    10 Years

    Auxilo

    Up to INR 40 lakhs

    12.70% - 18%

    1% to 2% of the loan amount

    10 Years

    HDFC Credila

    Up to INR 40 lakhs

    Starts at 11%

    1% - 1.5% of the loan amount

    10 Years

    Prodigy Finance

      Full tuition fee and living expenses  

    6.7% - 11%

    2.5% - 4% of the loan amount

    7, 10, 15 or 20 Years

      (as per the applicant’s convenience)  

    MPower Finance

      $2001 to $50,000  

    For UG studies - 13.99%, For Graduate studies - 11.99%

    5% of the loan amount

    10 Years

      (as per the applicant’s convenience)  

    What Should You Choose?

    Taking a loan is a liability in itself, and therefore students need a hassle-free process, with economically optimal terms such as low-interest rate, low fee, etc..
    GyanDhan helps you in availing the best deal on education loans without collateral for abroad studies so that you can start realizing your dreams.

    Also, if you are planning to take an education loan via SBI or BOB, then we have launched a new service of door pickup of documents (at zero cost) which will reduce your time and effort substantially.

    How can GyanDhan help you get an unsecured education loan?

    There is a double benefit of applying for your loan through GyanDhan. We have not only partnered with several lenders in the market, we also suggest the lender that will best serve your purpose and needs. Our Education Loan Counselors 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 even negotiate on your behalf. If any problem arises, it is quickly resolved by contacting the concerned official. So that your loan application is processed quickly and smoothly. All these services are provided free of cost to you. Just Check Your Loan Eligibility Here and take the first step to hassle-free funding.

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