Did you know that many study abroad aspirants are unable to pledge collateral to secure an education loan for studying abroad? However, they do not give up on their dreams; instead, they turn to lenders that provide education loans without collateral. Lots of different lenders, like private banks like NBFCS and more, can give you a loan for education abroad without collateral. This blog is here to teach you all about it.
Eligibility for non-collateral education loan
To qualify for an education loan without collateral, you must meet certain eligibility criteria. While these criteria may differ among various lenders, some common factors include:
● Co-applicant requirements: the co-applicant should have a healthy credit score (usually known as CIBIL), meet specific income requirements (typically ranging from 30,000 INR to 40,000 INR without financial commitments), and meet the lender’s defined criteria.
● Test Results: Your performance in English proficiency and standardized exams like IELTS, TOEFL, GRE, SAT, and more should meet or surpass the benchmarks established by your lender. This is an important consideration for loan approval.
● Academic Performance: Non-collateral education loans place a strong emphasis on your academic track record, using your past achievements to predict your potential future earnings. This is a key factor since no collateral is needed.
● Country, University, and Course Selection: It’s important to ensure that the country, university, or college and the course you’ve chosen align with the lender’s approved list for an education loan abroad without collateral.
Non-collateral education loan lenders
Now, addressing the central question: Which bank gives education loans without collateral abroad? It’s important to note that not only banks but also NBFCs and international lenders provide education loans without the need for collateral. We have compiled a table listing these lenders, along with their maximum loan amounts and interest rates.
|Lender Name||Loan Amount Interest Rate|
|UBI||Up to 40 Lakhs INR 9.80%–11.30%|
|Axis Bank||Up to 50 Lakhs INR 11.00%–11.50%|
|MPOWER Financing||12.99%: Graduate Programs, Up to 100,000 USD 13.99%: Undergraduate Programs|
|ICICI Bank||Up to 50 Lakhs INR 10.85%–12.50%|
|HDFC Credila||Up to 65 Lakhs INR 11.25%–13.00%|
|SBI||Up to 7.5 Lakhs INR 10.65%–11.50%|
|Prodigy Finance||Up to 100% of cost 12.00%–14.00%|
|IDFC FIRST Bank Incred Avanse Auxilo||Up to 50 lakhs, INR 11.50%–13.25% Up to 60 Lakhs INR 12.00%–14.00% Up to 75 Lakhs INR 12.50%–13.50% Up to 65 Lakhs INR 11.25%–14.00%|
Required document for non-collateral education loan
Here is an extensive compilation of the typical documents required for obtaining an education loan without the need for collateral.
Applicant document for non-collateral education loan
● Loan application form
● Address proof: a recent copy of the telephone bill, electricity bill, or water bill. ● Statement of expenses: the entire cost of education
● Proof of admission: you can submit a conditional offer of admission as well. ● Past academic record: 10th, 12th, undergraduate mark sheet, test scores of entrance tests like GRE, TOEFL, IELTS, etc.
● Identity proof: PAN Card, Passport, Voter ID card
● Loan account statement of one year, if there are any previous loans taken from any lender
● Passport-size photographs
Co-applicant documents for non-collateral education loan
● 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.
● Last 2 years, IT returns
● TDS Certificate
● Business address proof
● Bank account statement for the last 6 months
● Certificate of Qualification
● Salary slips for the last 3 months
● Copy of Form 16 for the last 2 years or copy of IT returns for the last 2 years. ● Bank account statement for the last 6 months
How do I apply for a non-collateral education loan?
To begin your journey to obtain an education loan without collateral, follow the below-given steps:
● Check eligibility: Start by visiting GyanDhan’s website or using their eligibility form to see if you qualify for a loan to study abroad without needing collateral. Your eligibility depends on your academic background, getting admission to a recognized foreign school, and your financial situation.
● Apply and get help – A GyanDhan Education Loan Counselor (ELC) will guide you through the application process and give you a personalized checklist. After you submit your application, the system will connect you with two lenders that fit your situation.
● Submit and verify documents. Collect and provide the necessary paperwork, which includes your academic and financial records. Lenders will review your application by checking your admission details, financial information, and more.
● Get loan approval: Once the lender gives the green light to your application, you’ll get a notice with the approved loan amount. If you’re happy with the terms, you can proceed by signing the agreement, and the money you need will be given to you.
Benefits of non-collateral education loan
If you opt for a non-collateral education loan for studying abroad, you’ll enjoy various advantages. Here’s a breakdown of what you can expect:
● Streamlined paperwork: With non-collateral loans, the documentation process is much simpler compared to secured loans. You’ll only need to provide easily manageable documents.
● Freedom to choose your institution: While many lenders have specific lists of universities, colleges, or courses they support with education loans, several now offer non-collateral education loans for studying abroad with a wide range of options. This means you can study wherever you prefer.
● Co-Applicant as a viable option If you have a suitable co-applicant willing to assist you, you won’t have to worry about providing collateral. Your co-applicant should have a good credit history that meets the lender’s requirements. A strong co-applicant can serve as an alternative to collateral.
● Extensive coverage of study expenses: Non-collateral education loans often provide substantial amounts that cover all your overseas study expenses. Most of your costs are taken care of if your application profile is strong and your loan amount falls within the lender’s maximum limit.
If you are ever unsure or have questions, do not hesitate to contact GyanDhan. We are available to support you in comprehending the loan process and discovering the ideal lender for your unique circumstances. Simply check your loan eligibility with us, and we will gladly guide you through each stage of the process.