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Are you a student dreaming of studying abroad but doesn’t have anything to offer as collateral for a secured education loan? Don’t stress! It’s possible to get an abroad education loan without collateral. These loan come with different limits and terms, offering smart choices for students with different financial backgrounds.
| Education Loan Without Collateral For Abroad Studies Overview | |
| Feature | Description |
| Collateral Requirement | No need to pledge any assets like property or jewellery as security. |
| Accessibility | Open to students from diverse backgrounds, potentially increasing funding options. |
| Loan Amounts | Varies, but typically up to a certain limit (e.g., Rs. 40-50 lakhs in India). |
| Course Coverage | Wide range of courses and colleges, both domestic and international (depending on the lender). |
| Interest Rates | Generally higher than secured loans (e.g., 10.50% – 14% in India). |
| Repayment | Typically, it starts after a moratorium period (e.g., 12 months after course completion or 6 months after securing a job, whichever is earlier). |
What is a Collateral Loan?
Education loans come in two main types: secured loans and unsecured loans. A secured loan requires collateral, which is a valuable asset or property pledged by the borrower to the lender as security for the borrowed amount. This safeguards the lender’s interests in case the borrower is unable to repay the loan.
In return, secured loans typically offer lower interest rates and longer repayment periods, benefiting the borrower. On the other hand, unsecured education loans abroad do not require collateral but may have higher interest rates and shorter repayment terms.
Features of Abroad Study Loan Without Collateral
Abroad loans for students without collateral come with a range of features designed to support students from various backgrounds, making their dreams of studying abroad a reality. Given below are some of the notable features of the education loan without collateral for studying abroad:
- No need for collateral: These loans do not require the borrower to pledge any collateral or security against the borrowed amount.
- Flexible loan limits: Lenders offer varying loan limits depending on factors such as the borrower’s academic profile, course, country of study, and financial background.
- Competitive interest rates: While interest rates may be higher compared to secured loans online, lenders often provide competitive rates to attract students.
- Flexible repayment terms: Borrowers usually have flexible repayment of education loan options, including grace periods, extended repayment periods, and customised repayment schedules.
- Quick processing: Many lenders offer fast and hassle-free processing of loan applications to meet tight admission deadlines and travel schedules.
- No prepayment penalty: Borrowers may have the option to prepay the loan amount without incurring any penalty charges, enabling them to save on interest costs in the period of moratorium on education loans.
- Covers various expenses: These loans typically cover tuition fees, living expenses, travel costs, and other study-related expenses.
- Cosigner requirements: In some cases, lenders may require a cosigner, such as a parent or guardian, to guarantee the loan if the borrower has a limited credit history or income.
Best Banks For Education Loan Without Collateral
When considering education loans without collateral for studying abroad, several banks stand out for their competitive offerings and student-friendly terms. These banks typically prioritise providing financial support to students pursuing higher education overseas, offering flexible loan options, competitive education loan interest rates, and streamlined application processes. Some renowned banks providing education loans without collateral include:
| Lender Name | Loan Amount | Interest Rate |
| SBI Education Loan | Up to 7.5 Lakhs INR | 10.65% – 11.50% |
| UBI Education Loan | Up to 40 Lakhs INR | 9.80% – 11.30% |
| Up to 50 Lakhs INR | 11.00% – 11.50% | |
| ICICI Bank Education Loan | Up to 50 Lakhs INR | 10.85% – 12.50% |
| IDFC Education Loan | Up to 50 Lakhs INR | 11.50% – 13.25% |
| HDFC Credila | Up to 65 Lakhs INR | 11.25% – 13.00% |
| Avanse Education Loan | Up to 75 Lakhs INR | 12.50% – 13.50% |
| Auxilo Education Loan | Up to 65 Lakhs INR | 11.25% – 14.00% |
| Incred Education Loan | Up to 60 Lakhs INR | 12.00% – 14.00% |
Banks That Provide Abroad Education Loan Without Collateral
A few banks offer education loans for studying abroad without requiring collateral or a co-applicant. These loans are designed to assist students in pursuing their academic ambitions overseas without financial constraints.
By eliminating the need for collateral or role of a co-applicant in education loan, these banks aim to make the loan application process more accessible and straightforward for students. While giving out collateral free education loans for abroad studies, these banks mainly look into your credit scores and academic performance. Refer to the table below:
| Lender Name | Loan Amount Without Collateral | Interest Rate |
| MPOWER Financing | Up to INR 1.5 Crores | 12.99% – Graduate Programs 13.99 – Undergraduate Programs |
| Prodigy Finance | Up to INR 1 Crore | 12.00% – 14.00% |
Eligibility For Education Loan For Abroad Study Without Collateral
Studying abroad is exciting yet challenging for many students. However, understanding the criteria and options provided by the best banks for securing an education loan without collateral for abroad education is essential for students to make informed decisions and fulfil their dreams of studying abroad. Refer to the points given below:
- The annual income after deducting liabilities and expenses should exceed Rs. 4 lakh.
- The co-applicant must possess a CIBIL score of over 700.
- For studies in the USA, students are required to achieve a GRE score of at least 300.
- For studies in all other countries, applicants must attain an IELTS score of above 6 or 6.5 bands.
- The parents of the applicant must own a residential house.
Documents Required For Education Loan For Abroad Studies Without Collateral
Before applying for an education loan without collateral for studying abroad, applicants and co-applicants need to gather the necessary documents to support their loan application. These documents serve as proof of identity, address, academic qualifications, financial stability, and more.
The list of required documents may vary depending on the lending institution and the specific circumstances of the applicant. Refer to the table below to understand the list of documents required for an education loan abroad without collateral security:
| Document Name | Description |
| Loan Application Form | Application form to be filled out by the applicant requesting the education loan. |
| Identity Proof | Valid identification documents such as PAN Card, Passport, or Voter ID card. |
| Address Proof | Recent copies of utility bills (telephone, electricity, or water) serve as proof of address. |
| Passport | Valid passport for identification purposes. |
| Past Academic Record | Academic records include 10th, 12th, and undergraduate mark sheets and test scores for exams like GRE, TOEFL, IELTS, etc. |
| Proof of Admission | Conditional offer of admission or official admission letter from the educational institution. |
| Statement of Expenses | A comprehensive breakdown of the total cost of education, including tuition fees and living expenses. |
| Passport-size Photographs | Recent passport-size photographs of the applicant. |
| Loan Account Statement (if applicable) | Statement of loan account for the past year if the applicant has previously taken loans from any lender. |
| Business Address Proof (Self-employed co-applicant) | Proof of business address for self-employed co-applicants. |
| Last 2 Years IT Returns (Self-employed co-applicant) | Income tax returns for the past two years for self-employed co-applicants. |
| TDS Certificate (Self-employed co-applicant) | Tax Deducted at Source (TDS) certificate for self-employed co-applicants. |
| Certificate of Qualification (Self-employed co-applicant) | Qualification certificate for self-employed co-applicants. |
| Bank Account Statement (Self-employed co-applicant) | Bank account statement for the last 6 months for self-employed co-applicants. |
| Salary Slips (Salaried co-applicant) | Salary slips for the past 3 months for salaried co-applicants. |
| Copy of Form 16/IT Returns (Salaried co-applicant) | Copy of Form 16 or income tax returns for the past 2 years for salaried co-applicants. |
| Bank Account Statement (Salaried co-applicant) | Bank account statement for the last 6 months for salaried co-applicants. |
How To Apply For Non-Collateral Education Loan For Abroad Through UniCreds?
UniCreds facilitates the loan application process by handling the paperwork and giving you the right guidance while applying for a loan. Applying for a non-collateral education loan for studying abroad through UniCreds is a straightforward process. Here’s a step-by-step guide:
- Step 1: Go to the UniCreds website. If you’re a new user, register on the UniCreds platform by providing your basic details. If you’re an existing user, simply login to your account.
- Step 2: Complete the application form by providing all required basic information accurately. This includes personal details, academic background, course details, and loan amount required.
- Step 3: Soon, our education loan expert will contact you to understand your requirements and scrutinise your eligibility.
- Step 4: Based on the information you provide, our loan expert will present you with the best suitable bank options to choose from.
- Step 5: Once you make a decision, you can proceed by submitting the documents and waiting for your loan approval!
UniCreds doesn’t charge any hidden fees throughout the process. Plus, we help you get a loan at a lesser processing fee.
Differences In Education Loans: Collateral Vs Non Collateral
Understanding the differences between collateral and overseas education loans without collateral is crucial for students seeking financial assistance for their studies.
While both options aim to provide funds for education, they differ significantly in terms of requirements, eligibility criteria, types of collateral, and terms of repayment. The table given below gives a key comparison of both loan types.
| 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 requires a financial co-applicant |
| Loan Amount | Generally higher depending on the value of the collateral | Lower compared to loans with collateral due to the risk of defaults |
| Interest Rates | Interest rates may be low due to security pledged | Interest rates may be high due to the 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 financial stability |
| Loan Processing Time | More due to documentation, property valuation and more. | Less due to relaxed requirements |
How Can UniCreds Help You Get Study Abroad Education Loan Without Collateral?
UniCreds can assist you in obtaining a study abroad education loan without collateral through its streamlined and user-friendly platform. Here’s how UniCreds can help:
1. Eligibility verification and guidance: UniCreds can help you assess your eligibility for a non-collateral education loan based on your academic profile, financial background, and chosen course/university.
2. Customised document checklist: They can provide a customized document checklist tailored to your specific situation, and the chosen lender, reducing the risk of submitting incomplete documents, which can delay the application process.
3. Online document upload and faster processing: UniCreds allows you to upload documents online, eliminating the need for multiple visits to the bank and potentially streamlining the application process.
4. Expert loan consultant support: UniCreds offers expert loan consultants who can guide you through the application process, answer your questions, and address any concerns you might have. This can help understand the complexities of the loan process and navigate the different options available.
5. Negotiating lower processing fees and interest rates: UniCreds might negotiate lower processing fees and interest rates with the lender on your behalf, potentially making the loan more affordable.
In conclusion, education loans without collateral offer a viable solution for students aspiring to pursue higher education abroad. While these loans may come with higher interest rates compared to collateral-backed loans, they provide accessible financing options for those who may not have valuable assets to pledge.
By carefully considering eligibility criteria, comparing loan options, and preparing a strong application, students can secure the funding they need to fulfil their academic aspirations and embark on a transformative educational journey abroad.
FAQs
1. How do you get an education loan for studying abroad without collateral?
To secure an education loan for studying abroad without collateral, applicants typically need to demonstrate strong academic performance, provide proof of admission to an accredited institution, and have a reliable co-applicant with a good credit score.
2. Which bank gives education loans without collateral for abroad?
Several banks offer education loans without collateral for studying abroad, including State Bank of India (SBI), HDFC Bank, Axis Bank, ICICI Bank, and Punjab National Bank (PNB), among others.
3. Can I get an education loan to study abroad without collateral?
Yes, it is possible to get an education loan to study abroad without collateral. Many banks and financial institutions offer non-collateral education loans specifically designed for students pursuing higher education overseas.
4. How much education loan can I get without collateral?
The amount of education loan you can get without collateral varies depending on several factors, including your academic profile, the course and institution you plan to attend, your co-applicants financial status, and the policies of the lending institution.
5. Is there a processing fee associated with an education loan without collateral?
Yes, there may be a processing fee associated with an education loan without collateral ranging between 1-2%.
6. Reasons why your education loan without collateral is being rejected?
Your education loan without collateral may be rejected due to insufficient academic qualifications, lack of a credible co-applicant with a strong credit history, or inadequate repayment capacity as assessed by the lender.
7. Are the interest rates higher for education loans without collateral?
Yes, interest rates for education loans without collateral tend to be higher compared to loans secured by collateral. This is because lenders perceive unsecured loans as higher risk, so they offset this risk by charging higher interest rates to compensate.
8. Can I get a 70 lakh education loan without collateral?
The availability of a 70 lakh education loan without collateral depends on various factors, such as your academic credentials, admission to a reputable institution, and financial stability.
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