Education Loan Without Collateral for Abroad Studies

Thinking of getting an education loan, however, what you hear from every lender is the “collateral”. This hassle brings you to the Google search, ‘Can we get study loan without collateral?’. Yes, you can get an education loan for abroad studies without collateral.

However, these loans come with terms and conditions, and you should be aware of them. The first mandatory requirement of these non-collateral education loan for abroad requires a financial co-applicant. Yet, there are international lenders such as MPOWER Financing and Prodigy Finance that can provide education loans even without a financial co-applicant.

All this information was just to help you know the basic related requirement, but the details about the public banks, private banks, and NBFCs are explained in the information below. Read to know and understand about the no-collateral education loans. 

What is an Education Loan Without Collateral?

A non-collateral education loan for abroad is a type of loan provided to students for their higher education expenses without requiring any security or guarantor. These loans are offered based on the applicant's academic record, admission to a recognized institution, and future earning potential. They are generally unsecured education loans, meaning borrowers do not need to pledge assets like property or shares. Interest rates may be higher compared to secured loans, and the loan amount can vary based on the lender's policy and the borrower's profile.

Education Loan With Collateral Vs Without Collateral

As the headline states, one education loan requires collateral, however, the other doesn’t require collateral. But, this is not the only thing that makes them different loan products. Below is the table that elaborates on the difference in detail:

To know more in detail, read:

• 
  Collateral Vs No-collateral Loan
• 
  Bonafide Certificate for Education Loan

Lenders Offering Abroad Education Loan Without Collateral

‘Can we get student loan without security?’ Yes, and this is possible because of the lenders mentioned below. All these provide an education loan for abroad studies without collateral but a financial co-applicant is required.

Lenders Offering Abroad Education Loan Without Collateral And Co-Applicant

‘Can I get education loan without guarantor?’ The answer to this question is “No” if we are talking about the Indian lenders. But, if you welcome an international lender, then the answer is “Yes”. They provide the education loan for abroad studies without collateral and co-applicant / guarantor.

Compare Top Education Loan Offers 2025

Even though all these lenders provide unsecured education loans for the abroad education. Still, they have their loan features, which make them different from one another. We have tried to include every single difference in the table below:

Eligibility Criteria for Abroad Education Loan Without Collateral

To arrange the funds from the lender, one needs to fulfil some eligibility criteria. The general eligibility criteria for the non-collateral education loan abroad are mentioned below. However, the eligibility for foreign education loan without collateral might become specific based on the lender you withdraw the loan from. 

Academic Profile:

The lender isn’t demanding security on your study loan without collateral, or your academic background plays a crucial role. 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 performance.

Co-applicant Finances:

The co-applicant must have a good CIBIL score and meet the prescribed requirements to get study loan without collateral. 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.

Course & University:

Almost all the lenders that provide you with non-collateral education loan for abroad have a list of universities/colleges and courses. All you have to ensure is that your target country, course, and university/college fall 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.

Documents Required for Abroad Education Loan Without Collateral

Below is a generalized list of documents required for getting an education loan to study abroad without collateral. All these documents should be prepared in advance to ensure the swift approval of a 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.
• 
  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 for one year, if there are any previous loans taken from any lender.

Documents Required from 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 the last 3 months
• 
  Copy of Form 16 for the last 2 years or a copy of IT Returns for the last 2 years.
• 
  Bank account statement for the last 6 months.

Maybe this is something that might interest you: Education Loan for Management Quota Students

Expenses Covered in an Unsecured Education Loan for Abroad

This section will guide you about the expenses that are been covered in abroad loan for students without collateral. However, the expenses covered may vary depending on the country, course, and specific schemes of these education loans. Here are the expenses that are covered in the education loan.

Tuition Fee:

Full or partial coverage of tuition fees, depending on the loan amount approved.

Accommodation:

Under a foreign education loan without collateral, the costs of on-campus or off-campus housing are also included.

Travel Expense:

Travel costs include flight tickets and other transportation expenses.

Study Materials:

Study material expenses could be expenses for books, e-resources, and academic tools. Costs for laptops or other necessary equipment may also be included under this category.

Health Insurance:

Health insurance is a mandatory requirement for universities or countries. Health insurance is also covered under a foreign education loan without collateral.

Examination and Application Fees:

Study abroad education loan without collateral also covers additional costs like examination costs and other miscellaneous expenses.

How to Get an Education Loan for Abroad Studies Without Collateral?

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

Benefits of Student Loan Without Collateral

There are several benefits of an abroad education loan without collateral. A few of them are listed below -

• 
  Wider access to education: Study loan without collateral democratize access to higher education, especially for students who may not have significant assets but possess strong academic credentials and potential.

• 
  No asset risk: Since these loans do not require collateral, students and their families do not risk losing assets in case of financial difficulties or inability to repay the loan.

• 
  Encourages academic excellence: Often, eligibility for an unsecured education loan is based on academic performance, motivating students to maintain high grades and perform well.

• 
  Simplified loan approval process: The absence of collateral speeds up the loan approval process, making funds available more quickly and efficiently than secured loans, which require asset valuation.

• 
  Flexible repayment terms: Many lenders offer flexible repayment terms, including grace periods during the study and low-interest rates, making repayment more manageable for students once they graduate and start working.

Countries Accepting Unsecured Education Loans for Abroad Studies

Unsecured education loans are widely accepted in many countries for students pursuing higher education. These loans provide financial support without requiring collateral, making them a popular choice for students. This section will provide you with the top countries where unsecured education loans are generally accepted.

Loan Repayment Options and Moratorium Periods

For an international education loan without collateral, you can take advantage of different repayment options that align with your financial needs. This flexibility is offered during the moratorium period that covers the course duration plus 6 to 12 months. Below is the repayment option you can consider for your foreign education loan without collateral. 

Common Challenges and How to Overcome Them

Even though you are going for a foreign education loan without collateral, the complexities can occur. Thus, this also provides more clarification to the question, “How to get unsecured education loan?” and many more such questions. 

Co-Applicant Requirements:

Students generally struggle to meet the co-applicant requirements, as many lenders require a co-applicant with a stable income and good credit history to approve the loan. However, you must explore lenders that offer no-co-applicant loans or those that consider alternative income proofs for loan approval.

Missing or Incorrect Documents:

Missing or incorrect documents can delay or reject your loan applications. Hence, you must first create a checklist of required documents, including identity proof, admission letter, fee structure, etc, to avoid any delays in the approval process.

Higher Interest Rates:

Unsecured loans generally have higher interest rates compared to secured loans, leading to a greater financial burden of repayment. Always compare lenders that suit your financial needs and negotiate rates.

Loan Amount:

Some lenders approve amounts that do not cover the full cost of education and living expenses, making students struggle to arrange additional funds. However, you should choose lenders that provide higher loan amounts. You must also explore education loan schemes by the Indian government that offer additional financial support.

Limited Loan Options:

Lenders may limit loans to certain universities, countries, or courses. Lenders generally offer high loan amounts to students flying for top study-abroad destinations and universities with good QS rankings. Hence, always research and apply to lenders with flexible loan policies.

How can GyanDhan Help You Get a Study Abroad Loan Without Collateral?

GyanDhan simplifies the process of securing an education loan without collateral for students who are aiming to study abroad. With their expertise, you can access a wide range of options from various lenders, ensuring you get the best deal based on your needs. Here's how GyanDhan can assist you in obtaining an unsecured loan for your education:

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.

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:

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 concerning 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 for student loan unsecured 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

• 
  Your priority should be public banks, as they can provide you with low interest rates. However, the loan amount that you can get from them is low for unsecured education loans.
• 
  Private banks should be your next priority as the loan amount provided by them can go up to 50 Lakhs INR, and they will be able to provide you with reasonable interest rates. Therefore, if you have a question, “Can I get 50 Lakhs education loan without collateral?” then you have your answer now.
• 
  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.
• 
  International lenders will be a great last option, especially when you do not have a proper co-applicant. They can provide you with loans up to 100,000 USD, but the interest rate will be higher 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. Still, confused? Let GyanDhan help you in choosing the best lender. All you have to do is check your loan eligibility.

Frequently Asked Questions