Education Loan Without Collateral for Abroad Studies

Numerous Indian students have a desire to pursue their education abroad but might lack the capacity to provide collateral for a student loan. Nevertheless, it’s important to stay dedicated to your ambitions and explore options offered by lenders who offer unsecured education loans (education loans without collateral). Many financial institutions, including private banks and non-banking financial companies (NBFCs), offer education loans without the need for collateral. This article aims to provide a thorough insight into this alternative.

Eligibility for education loan without collateral

The criteria for qualifying for an unsecured education loan can differ from one lender to another, but there are standard factors that should be taken into account. 

• Requirements for a Co-Applicant: Your co-applicant needs to meet specific income criteria, generally ranging from 30,000 INR to 40,000 INR without financial commitments, have a healthy credit score (often referred to as CIBIL), and fulfill the lender’s specified criteria.
• Academic Performance: Emphasis is placed on your academic track record in the context of education loans without collateral. Your past achievements are used to predict your potential future earnings, making this a crucial factor since collateral is not needed.
• Country, University, and Course Selection: It’s crucial to ensure that the country, university, or college, and the course you’ve chosen align with the lender’s approved list for non-collateral education loans for studying abroad.
• Test Results: Your performance in English proficiency and standardized exams like IELTS, TOEFL, GRE, SAT, and others should meet or exceed the benchmarks set by your lender, as this plays a crucial role in loan approval.

Lenders offering education loan without collateral

Education loans without collateral for abroad studies are not only available with banks but NBFC and international lenders can also provide you with the same. To read more about detailed unsecured loan offerings by different lenders click here. To give you an overview a list  for the same has been compiled below. 

• • Public Banks 
    • SBI – Maximum loan amount of up to 7.5 Lakh INR with an interest range between 10.65% – 11.50%.
    • UBI – Maximum loan amount of up to 40 Lakh INR with an interest range between 9.80% – 11.30%.

• Private Banks

• • • Axis Bank – Maximum loan amount of up to 50 Lakh INR with an interest range between 11.00% – 11.50%. 
    • ICICI Bank – Maximum loan amount of up to 50 Lakh INR with an interest range between 10.85% – 12.50%.
    • IDFC FIRST Bank – Maximum loan amount of up to 50 Lakh INR with an interest range between 11.50% – 13.25%.

• NBFCs

• • • HDFC Credila – Maximum loan amount of up to 65 Lakh INR with an interest range between 11.25% – 13.00%.
    • Avanse – Maximum loan amount of up to 75 Lakh INR with an interest range between 12.50% – 13.50%.
    • Auxilo – Maximum loan amount of up to 65 Lakh INR with an interest range between 11.25% – 14.00%.
    • InCred -Maximum loan amount of up to 60 Lakh INR with an interest range between 12.00% – 14.00%. 

• International Lenders

• • MPOWER Financing – Maximum loan amount of up to 100,000 USD with an interest of 12.99% for graduate programs and 13.99% for undergraduate programs. 
  • Prodigy Finance – It can cover up to 100% cost of your abroad education with an interest rate that ranges between 12.00% – 14.00%. 

Documents required for education loan without collateral

When applying for an education loan without collateral, you will be expected to furnish a specific set of documents. Here’s an inclusive list of the standard documents needed for both the applicant and co-applicant:

Applicant Documents:

1. Passport
2. Loan application form
3. Address proof (recent utility bill)
4. Statement of education expenses
5. Proof of admission
6. Academic records (10th, 12th, undergraduate transcripts, and entrance test scores)
7. Identity proof (PAN Card, Passport, Voter ID)
8. Loan account statement (if applicable)
9. Passport-size photographs

 

Co-applicant Documents:

1. Identity proof
2. Address proof
3. Income proof (varies based on employment type)

1. Self-employed:

      – Last 2 years IT returns

      – TDS Certificate

      – Business address proof

      – Bank account statement (last 6 months)

      – Certificate of Qualification

1. Salaried:

      – Salary slips (last 3 months)

      – Copy of Form 16 (last 2 years) or IT Returns (last 2 years)

      – Bank account statement (last 6 months)

Application process for education loan without collateral

To initiate the process of obtaining an education loan without collateral, follow the steps below:

• Assess Eligibility: Start by visiting GyanDhan’s website or using their eligibility form to determine if you meet the criteria for a non-collateral loan to pursue your education abroad. Your eligibility is contingent on your academic background, securing admission to an accredited foreign institution, and your financial situation.
• Apply with Guidance: A GyanDhan Education Loan Counselor (ELC) will assist you throughout the application process and provide a tailored checklist. Once you submit your application, the system will connect you with two lenders suitable for your specific situation.
• Document Collection and Verification: Collect and provide the necessary documents, including academic and financial records. Lenders will evaluate your application by reviewing your admission details, financial information, and more.
• Loan Approval: Upon approval from the lender, you will receive notification of the approved loan amount. If you are satisfied with the terms, you can proceed by signing the agreement, and the required funds will be disbursed to you.

Advantages of education loan without collateral

Advantages of pursuing an education loan without collateral for overseas studies include a streamlined documentation process, the flexibility to choose your preferred institution, the option of a co-applicant instead of collateral, and extensive coverage of study expenses.

• Institution Flexibility: You have the freedom to select your desired institution, as many lenders now offer non-collateral education loans with a broader range of eligible options for study.
• Simplified Documentation: Non-collateral loans come with simplified paperwork, reducing the document requirements to manageable levels.
• Comprehensive Expense Coverage: These loans often offer substantial amounts to cover a significant portion of your study expenses abroad, provided your application profile is strong and falls within the lender’s maximum limit.
• Co-Applicant Option: If you have a co-applicant with a strong credit history meeting the lender’s requirements, it can serve as an alternative to collateral, eliminating the need for pledging assets.

 

Opting for an unsecured education loan for international studies presents multiple benefits, such as streamlined documentation, the freedom to select your preferred institution, the option of a co-applicant, and extensive coverage of study-related expenses. If you have any inquiries or doubts, do not hesitate to reach out to GyanDhan. They are here to provide guidance and aid you in identifying the perfect lender for your individual situation. Just assess your loan eligibility through them, and they will walk you through each phase of the procedure.