Education Loan

Education Loan for Abroad Studies without Collateral

Education Loan for Abroad Studies without Collateral

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Learn how to get an education loan without collateral. Check eligibility, interest rate, to get non collateral loan for abroad: UBI, Axis, ICICI and 8 more.

GyanDhan
Rohit Gidwani
Updated on:  08 May 2024  | Reviewed By: 
Aman 
| 130K | 13  min read

Are you a student who dreams of studying abroad, but having no collateral raises a self-doubt ‘Can we get study loan without collateral?’ 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 study loan 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. 

Check Your Education Loan Eligibility

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What is 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.

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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

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

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Lenders that provide abroad education loan without collateral

The different lenders that can provide you with collateral free education loan for abroad are listed below.

  • list items Public sector banks - SBI and UBI.
  • list items Private sector banks - Axis Bank, ICICI Bank, and IDFC FIRST Bank.
  • list items NBFCs - HDFC Credilla, Avanse, Auxilo, and Incred.
  • Now that you have the answer to the question ‘Can we get student loan without security?’ let’s have a look at different lender’s education loan amounts and interest rates. 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.

    Lender Name Loan Amount Interest Rate

    SBI

    Up to 7.5 Lakhs INR

    10.65% - 11.50%

    UBI

    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%

    IDFC FIRST Bank

    Up to 50 Lakhs INR

    11.50% - 13.25%

    HDFC Credila

    Up to 65 Lakhs INR

    11.25% - 13.00%

    Avanse

    Up to 75 Lakhs INR

    12.50% - 13.50%

    Auxilo

    Up to 65 Lakhs INR

    11.25% - 14.00%

    Incred

    Up to 60 Lakhs INR

    12.00% - 14.00%

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    Lenders that provide abroad education loan without collateral and co-applicant

    Many of you often ask one question, in particular, i.e. Can I get education loan without guarantor? The table below mentions international lenders that can provide you education loan for abroad studies without collateral and co-applicant / gurantor.

    Lender Name Loan Amount Interest Rate

    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%

     

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    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-

  • list items Academic profile of the client
  • list items Co-applicant finances
  • list items Chosen country, university, and course
  • list items Test scores
  • Let’s discuss the eligibility for foreign education loan without collateral in detail

  • list items Academic profile of client - Since the bank does not demand collateral as security for your study loan without collateral, 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. 
  • list items Co-applicant finances - The co-applicant must have a very good CIBIL score and meet the prescribed requirements in order 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.
  • list items 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. 
  • list items 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.  
  • Calculate your Education Loan EMI

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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

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

  • list items Identity proof 
  • list items Address proof 
  • list items 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 -

  • list items Business address proof 
  • list items Last 2 years IT returns 
  • list items TDS Certificate 
  • list items Certificate of Qualification 
  • list items Bank account statement of the last 6 months 
  • Salaried co-applicants - 

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

  • Read more about: Education Loan For Management Quota Students

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    How to Get 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 below-mentioned steps.

  • list items 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.
  • list items 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.
  • list items Submit and Verify Documents: Gather and submit required documents, including academic and income records. Lenders verify your application, reviewing admission details, financials, and more.
  • list items 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.
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    Benefits of Student Loan Without Collateral

    There are several benefits of abroad education loan without collateral. Few of them are listed below - 

    1. 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.
    2. 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.
    3. Encourages academic excellence: Often, eligibility for an unsecured education loan is based on academic performance, motivating students to maintain high grades and perform well.
    4. 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.
    5. 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.

    If you have any further questions about education loan without collateral, please visit our YouTube channel. We have a detailed video that explains the topic thoroughly

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    How can GyanDhan help you get a study abroad loan without collateral?

  • list items 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.
  • list items 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.
  • list items 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. 
  • list items 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 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

  • list items 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.
  • list items 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. Therefore if you have a question “Can I get 50 Lakhs education loan without collateral” then you have your answer now.
  • list items 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.
  • list items 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.
  • 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. Do not worry if you are still confused, let GyanDhana help you in choosing the best lender. All you have to do is check your loan eligibility.

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    Frequently Asked Questions

    Which bank gives education loan without collateral India for abroad?

    Several banks provide education loans without collateral for studying abroad. Some notable examples include:

    1. State Bank of India (SBI)
    2. Union Bank of India (UBI)
    3. Axis Bank
    4. ICICI Bank
    5. HDFC Credila

    It's important to note that the availability of these loans and their specific terms may vary. Check your loan eligibility and determine the best loan option based on your academic and financial profile. 

    Can I get a US education loan without collateral?

    Yes, you can get a US education loan without collateral as well all you got to have is a good application for applicant and co-applicant. The loan amount can vary but for a general idea -

  • list items Private Banks - up to 50 Lakhs INR
  • list items NBFCs - up to 70 Lakhs INR
  • list items International Lenders - up to USD 100,000
  • How to get an education loan for abroad studies without collateral and a co-applicant?

    In cases where the lender does not require collateral and a co-applicant, they mostly check your academic profile, the course and university you have opted or, and 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. 

    How much loan can I get without collateral?

    One of the best types of lenders for education loans without collateral is private banks. Apart from that, you can also get an education loan without collateral from NBFCs and International lenders. Now coming to the amount, can maximum limit for private banks and NBFC ranges somewhere between 50 - 70 Lakhs INR, and for International lenders, you can get a loan upto USD 100,000.

    Is there a processing fee associated with an education loan without collateral?

    Yes, you will have to incur processing fees when you take an education loan without collateral. Depending on the lender you may be asked to pay 0.5% - 1.5% of the loan amount as the processing fee. 

    Reasons why your education loan without collateral is being rejected?

    A few reasons that lead to the rejection of your application to get an education loan without collateral are - 

  • list items Lenders majorly prefer to fund postgraduate programs. In case you apply for an undergraduate program and the targetted university is not on the approved list, then it can be rejected. 
  • list items Improper FOIR i.e. Fixed Obligation to Income Ratio can get your application for an education loan without collateral rejected. Usually, lenders require approx 35,000 - 40,000 INR as minimum income without obligations.
  • Can I get 15 Lakh education loan without collateranl?

    Yes, you can secure an education loan of up to 15 Lakhs without collateral from public banks like Union Bank of India (UBI), as per the bank's lending policies for higher education.

    Can I get 20 Lakhs education loan without collateral?

    Private banks such as Axis, ICICI, and IDFC FIRST may offer up to 20 Lakhs in education loans without requiring collateral, depending on the course and applicant's eligibility.

    Can I get 25 Lakhs education loan without collateral?

    Both public banks like UBI and private banks such as Axis, ICICI, and IDFC FIRST can provide up to 25 Lakhs for education loans without collateral, subject to specific terms and eligibility criteria.

    Can I get 40 Lakhs education loan without collateral?

    For an education loan amounting to 40 Lakhs without collateral, NBFCs like HDFC Credila, Avanse, InCred, and Auxilo are viable options, offering specialized loan products for higher education.

    Check Your Education Loan Eligibility


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