Pursuing higher education abroad is a dream for many students, but the financial burden can often be overwhelming. Tuition fees, living expenses, and other costs make studying overseas an expensive affair. To bridge this gap, many students seek education loans. However, most traditional education loans require collateral, which can be a major hurdle. But is it possible to get an abroad education loan without collateral? The answer is yes! Let’s explore how students can secure an unsecured education loan and make their study abroad dreams come true.
A collateral-free education loan, also known as an unsecured loan, does not require the borrower to pledge any asset, such as property, fixed deposits, or other valuable assets. These loans are primarily offered based on the applicant’s academic profile, future earning potential, and co-applicant’s financial stability.
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Different lenders have varying eligibility criteria, depending upon the type of education a student is seeking for. Following are the top most eligibility criteria followed by the different lenders:
Achieving a minimum of 50% marks in HSC and graduation. Gain admission to career-focused courses such as medicine, engineering, management, etc., at either graduate or postgraduate levels. Securing admission in India or abroad based on entrance exams or a merit-based selection process after completing HSC (10+2).
Loans are more readily approved for STEM (Science, Technology, Engineering, and Mathematics) courses or management from reputed universities. You can also Google the top most institute available who provides in-house education loan to the students.
A co-applicant, typically a parent or guardian, is required for an unsecured education loan. His/her income, credit score, and financial stability play a crucial role in loan approval. A good CIBIL score (700 and above) increases the chances of loan approval and can lead to better interest rates and loan terms.
Countries like the USA, Canada, the UK, Australia, and Germany have higher chances of getting unsecured loans due to better prospects after graduation.
Several financial institutions offer unsecured education loans for studying abroad. Here are some popular options:
State Bank of India (SBI): Offers SBI Global Ed-Vantage but usually requires collateral for high amounts. Bank of Baroda: Provides education loans under the Baroda Scholar scheme.
ICICI Bank: Offers collateral-free education loans based on student profiles. Axis Bank: Provides unsecured loans up to INR 40 lakhs for select universities.
HDFC Credila: Provides customized education loans without collateral. Avanse: Offers flexible repayment options with unsecured loans. InCred: Specializes in education loans for top global universities.
Prodigy Finance: Provides loans without collateral based on a student’s future earning potential. MPower Financing: Offers unsecured Abroad Education loans without the need for a co-signer.
Compare various lenders based on interest rates, repayment terms, and eligibility criteria.
Ensure you meet the lender’s requirements regarding university, course, and co-applicant financial status.
Once the application is submitted, the lender assesses eligibility and approves the loan within 2-4 weeks.
After signing the loan agreement, the loan amount is disbursed directly to the university.
Pros
✔️ No need to pledge assets
✔️ Faster processing compared to secured loans
✔️ Suitable for students without property or collateral
✔️ Flexible repayment options
Cons:
❌ Higher interest rates compared to secured loans
❌ Requires a financially stable co-applicant
❌ Loan approval depends on the university and course
Most public sector banks require a co-applicant or collateral. However, schemes like the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) offer loans up to ₹7.5 lakhs without collateral or a co-applicant
Several banks in India offer personal loans without the need for collateral or security. These loans are also known as unsecured loans, and banks will assess your eligibility based on factors like your income, credit score, and repayment history.
7.5 lakhs with no collateral. These loans support undergraduate, postgraduate, and doctoral studies, including foreign universities. With 38 banks involved, the initiative targets students with family incomes below Rs. 4.5 lakhs, offering interest rates from 7% to 13%
Yes, it is absolutely possible to secure an abroad education loan without collateral, but it requires careful planning and the right approach. Students with strong academic backgrounds, co-applicants with stable incomes, and admission to top universities have better chances of approval. By researching lenders, understanding eligibility criteria, and preparing a solid application, you can finance your dream education abroad without the burden of pledging collateral.
If you’re planning to study abroad but lack collateral, start exploring your loan options today and take a step closer to achieving your global education goals!
