Education Loans Without Collateral For Studying Abroad: Guide

Studying abroad often comes with a significant financial burden from tuition fees and living expenses to travel, insurance, and more.

While education loans have made higher studies more accessible, not every student or family has the assets to pledge as security. This is where education loans without collateral come in.

Also known as unsecured education loans, these are designed for students who have strong academic potential but may lack property or financial backing.

These loans don’t require you to pledge any assets, making them a lifeline for many middle-income households and first-generation learners.

This blog covers how study abroad education loans without collateral work, their eligibility, application process, top lenders and key benefits for students pursuing higher education abroad without financial strain.

What Is a Study Abroad Education Loan Without Collateral?

An international education loan without collateral does not require the student or their family to pledge any personal assets, such as property, fixed deposits, or gold, as security while you decide to study abroad.

These loans are also known as unsecured education loans. They are granted primarily based on the student’s academic record, the reputation of the university/course, and the financial standing of the co-applicant (usually a parent or guardian).

These loans benefit students who may not have access to high-value assets but still want to pursue higher education abroad. With faster processing, minimal documentation, and no legal property verification, education loans without collateral are becoming an increasingly popular option among middle-income families and first-generation learners.

While the loan amount may be comparatively limited and interest rates slightly higher, this type of loan provides access to quality education without the burden of asset-based risk.

Types of Education Loans

Education loans can be classified based on various factors, such as whether you are studying abroad, the course type, the presence or absence of collateral, and the type of lender (bank, NBFC, or fintech).

Education Loan With Collateral (Secured Loan)

These loans require the borrower to pledge an asset, like a house, fixed deposit, or property as security. The lender holds this asset until the loan is fully repaid.

Education Loan Without Collateral (Unsecured Loan)

No asset or security needs to be pledged. Instead, the loan is sanctioned based on your academic profile, university/course ranking, co-applicant’s financial background and future earning potential.

Feature	With Collateral (Secured)	Without Collateral (Unsecured)
Security Required	Yes (property, FD, etc.)	No
Loan Amount	Typically higher, depending on the value of the asset	Generally lower than secured loans
Interest Rates	Usually lower due to reduced lender risk	Slightly higher due to the absence of collateral
Approval Time	Longer (due to property verification)	Faster (less paperwork)
Co-Applicant Requirement	Optional	Mandatory
Common Lenders	Public banks, private banks	Private banks, NBFCs, fintechs

Eligibility Criteria For Education Loans Without Collateral

To secure an education loan without collateral for studying abroad, students and their co-applicants must meet specific academic, financial, and documentation-related requirements.

While these criteria may vary slightly depending on the lender, here are the standard benchmarks:

• Income Requirements: The co-applicant’s annual income after liabilities and expenses should typically exceed Rs. 4 lakh.
• Credit Score: The co-applicant must have a good credit history, usually a CIBIL score above 700 is required. Depending on the lender, some banks accept a minimum score of around 600.
• Citizenship: Both the applicant and the co-applicant must be Indian citizens.
• Academic Performance: Minimum academic performance criteria may be required, such as at least 60% marks in higher secondary and graduation.
• Co-applicant Relationship: The co-applicant should be an immediate family member, such as a parent, guardian, sibling, or spouse. The applicant’s parents must own their own residential home. 
• GRE Scores: Students applying to study in the USA must have a GRE score of 300 or more.

Process To Apply For An Education Loan Without Collateral To Study Abroad 

Applying for a collateral-free education loan has become easier and more accessible, especially with the rise of online lending platforms and fintech partners.

Here’s a step-by-step breakdown of how students can apply for an unsecured education loan for abroad studies:

1. Research and Shortlist Lenders

Begin by identifying banks, NBFCs, or loan aggregators that offer unsecured education loans. Look for lenders that support your country of study, chosen university, and course type. Leading providers include private banks, NBFCs, and digital loan platforms.

2. Check Your Eligibility

Before applying, review the lender’s eligibility criteria such as academic scores, GRE (if applicable), university ranking, and your co-applicant’s income and credit score. This helps avoid unnecessary rejections.

3. Gather the Required Documents

Keep the following documents ready for a smooth application process:

• Student and co-applicant KYC (ID & address proof)
• Academic records (mark sheets, certificates)
• An admission letter from the university or institution
• Course fee structure or invoice
• Co-applicant’s income proof (salary slips, bank statements, ITR)
• Recent passport-size photos
• Credit report of the co-applicant

4. Submit Your Loan Application

Most lenders allow online applications via their official websites or apps. Fill in the form, upload documents, and submit for initial review. If you need guided support, you can also visit a branch or connect with an education loan advisor like Unicreds. 

5. Loan Evaluation by the Lender

The bank or NBFC evaluates your profile based on:

• Your academic track record
• University/course credibility
• Country of study
• Earning potential after graduation
• Co-applicant’s financial background and credit history

6. Loan Sanction and Disbursement

Once your application is approved, the lender issues a sanction letter outlining the terms and loan amount. The disbursed funds are usually sent directly to the educational institution as per the fee schedule.

7. Additional Formalities (if applicable)

If you are applying for study abroad, you may be asked to submit:

• Visa approval documents
• Proof of travel or accommodation
• Insurance or foreign remittance forms

No collateral? No problem!

Apply for an unsecured abroad education loan today and take the first step towards your study abroad dream.

Apply For Loan

Top Lenders Offering Education Loans Without Collateral To Study Abroad

Several public and private banks offer unsecured education loans to international students pursuing higher studies.

These loans are granted based on academic merit, university/course reputation and the co-applicant’s financial profile, without requiring any collateral.

Public Sector Banks

• State Bank of India (SBI): Offers up to ₹7.5 lakh without collateral for domestic education and up to ₹1.5 crore for premier foreign institutes under specific schemes. Interest rates range from 8.30% to 11.50%.
  
• Punjab National Bank (PNB): Provides unsecured loans up to ₹1 crore. Interest rates for unsecured loans are slightly higher than the average 8.55% to 11.25% offered for secured loans.
  
• Bank of Baroda: Offers up to ₹80 lakh without collateral for overseas studies with interest rates ranging from 9.10% to 12.45%.
  
• Bank of India: Provides up to ₹1 crore in unsecured loans for foreign education. Interest rates range from 8.25% to 11.60%.

Private Sector Banks

• HDFC Credila: Offers unsecured education loans up to ₹75 lakh with no margin money and zero collateral required. Loan tenure extends up to 15 years, with early repayment allowed without charges. Covers living expenses and charges a nominal processing fee of 0.85% to 1%.
  
• ICICI Bank: Offers unsecured education loans up to ₹1 crore with no margin money and zero collateral required. Loan tenure goes up to 14 years, with early repayment allowed at no extra cost. Covers living expenses and has a low processing fee of 0.5% to 1%.
  
• Axis Bank: Provides unsecured education loans up to ₹75 lakh with no margin money and no collateral required. Loan tenure is up to 15 years, with zero charges on early repayment. Covers living expenses and has a processing fee between 0.5% and 1%.

Loan amounts, eligibility, and interest rates may vary based on the university, country of study, and co-applicant’s financials.

What does an Unsecured Education Loan Cover?

Unsecured education loans for studying abroad are designed to cover a broad range of expenses associated with overseas education. While the exact coverage may vary by lender, the following are the most commonly included expenses:

Tuition Fees: Full or partial tuition fees can be covered depending on the loan amount and other factors.

Living Expenses: Loans typically cover living costs such as accommodation (on-campus or off-campus), food, and daily expenses. The extent of this coverage may differ between lenders, so it’s essential to clarify with your bank or NBFC.

Travel Expenses: Most education loans include travel expenses or passage money for a one-way ticket to the country of study. Some lenders may require you to request the inclusion of airfare specifically.

Books, Equipment, and Study Materials: Most loans include the cost of purchasing textbooks, laptops, equipment, and other study materials necessary for your course.

Health and Travel Insurance: Many lenders, especially private banks and NBFCs, include health and travel insurance as part of the loan package. Nationalised banks may not always cover these, but you can request their inclusion.

Visa Fees: Some private banks and NBFCs include visa fees in their list of covered expenses, but not all public sector banks do. Always confirm with your lender if this is included. 

Examination, Library, and Laboratory Fees: Fees payable to the university or college for exams, library usage, and laboratory access are generally covered.

Benefits Of Education Loans Without Collateral

Non-collateral education loans are an excellent option for students who don’t have assets to pledge but still want to pursue higher education abroad.

These unsecured loans offer generous funding, cover a wide range of expenses, and come with flexible repayment options, making quality education more accessible and less stressful for students and their families.

No Collateral Required

No need to pledge assets like property or FDs, ideal for students without significant financial backing.

High Loan Amounts

Get up to ₹7.5L for regular institutes and ₹40L or more for top-tier or overseas universities.

Fast & Hassle-Free Process

Minimal paperwork and no asset verification, some lenders offer instant online approval.

Loans Before Admission

Financial support, even before securing university admission, eases the application process.

Flexible Repayment

Enjoy longer tenures, moratorium periods, and custom repayment plans post-study.

Builds Credit Score

Timely repayments help students build a strong credit history early on.

Education loans without collateral have opened doors for thousands of students who dream of pursuing higher education but lack the financial assets to pledge.

They offer a viable solution with quicker processing, minimal paperwork, and flexible repayment terms. While the interest rates may be slightly higher than secured loans, the benefits of access, speed, and asset-free approvals make them a popular choice, especially for students from middle-income families and first-generation learners.

UniCreds can help you compare multiple education loan options, get the lowest interest rates, and apply for unsecured education loans up to ₹1 crore with no collateral or margin money.

Whether you need pre-admission loans, living cost coverage, or expert guidance, the entire process is seamless.

FAQs

1. Can I get a student loan without collateral?

Yes, you can get an education loan without collateral from banks and NBFCs. These loans are approved based on your academic profile, course, institution, and your co-applicant’s financial background.

2. Which bank gives an education loan easily?

Banks like State Bank of India (SBI), HDFC Credila, Axis Bank, and ICICI Bank are known for offering education loans for abroad studies with relatively easy approval processes, especially for recognised courses and institutions. HDFC Credila and Axis Bank are often preferred for quicker processing and flexible terms.

3. Which factors influence approval for a non-collateral education loan?

When approving a study loan without collateral, lenders consider factors like the student’s academic record, course type, and university ranking. They also assess the co-applicant’s income, credit score, and overall repayment capacity.

4. Can I get 20 lakhs without collateral?

Yes, it’s possible to get a ₹20 lakh education loan without collateral, especially through private banks and NBFCs, provided you have a strong academic record, a reliable co-applicant, and admission to a reputable course. For example, ICICI Bank offers unsecured loans up to ₹75 lakh.