Education Loan Without Collateral to Study Abroad
Introduction:
With the help of educational loans, students with limited funds can pursue their desired degree programme overseas. Up to a certain sum, a number of banks provide education loans without requiring collateral or security. Students who might not have the means to provide such supporting documentation will gain from this. All the details you require regarding collateral-free student loans for foreign studies are provided below for your perusal.
Share this Blog
Facebook
LinkedIn
WhatsApp
Twitter
Email
Need guidance? Let us help you.
Introduction:
With the help of educational loans, students with limited funds can pursue their desired degree programme overseas. Up to a certain sum, a number of banks provide education loans without requiring collateral or security. Students who might not have the means to provide such supporting documentation will gain from this. All the details you require regarding collateral-free student loans for foreign studies are provided below for your perusal.
Table of Contents
What is Unsecured/Non-Collateral Education Loan?
Banks and other financial organisations offer education loans without collateral, commonly referred to as unsecured education loans, as a kind of financial aid to assist students and their families in meeting the costs of higher education. A non-collateral education loan, in contrast to conventional loans, does not need the borrower to offer any security or collateral for the loan amount.
Key Characteristics of Student Loans Without Collateral
- No Collateral: The lack of collateral removes the requirement for borrowers to guarantee the loan with assets like real estate, jewels, or fixed deposits.
- Greater Reach: Students from both domestic and foreign universities can apply for these loans, which make high-quality education accessible to people from a range of socioeconomic situations.
- Wider Coverage: The loan amount may pay for all or a significant portion of the cost of books, equipment, tuition, housing, and other associated costs, depending on the lender.
- Faster & more convenient: Even though unsecured loans may have marginally higher interest rates than secured loans, however, they generally offer a much higher convenience and faster processing to the borrowers.
- Suitable Terms: These loans typically have terms and conditions that are favourable to students for repayment. It provides moratorium periods, during which borrowers are exempt from loan repayment until the end of the course or for a predetermined amount of time after starting work.
Advantages of Student Loans Without Collateral
- Students may obtain a loan of between Rs. 40 lakh and Rs. 50 lakh without having to pledge any collateral.
- Before being admitted, a loan can be obtained.
- EMIs are not due during the moratorium.
- Complete funding is granted for advanced studies.
- Additionally, students are eligible for top-up loans.
- No penalties for early payments
- Choice for flexible repayment
- Fast and digital procedure
Documents for Collateral-Free Education Loan
- Loan application form
- A copy of the offer letter from the university or institute, along with the payment plan.
- Mark sheets and passing certificates for SSC, HSC, degree programmes, and admission tests like TOEFL and IETLS, among others.
- Proof of income (pay slips or Form 16) for the co-applicant/borrower, or guarantor.
- Two passport-size photos of the applicant and co-applicants.
- Operational bank account statement for the last 6 months.
- The Guarantor Form is optional.
- PAN Card
- Aadhar Card
- Academic Transcripts
Eligibility Standards for Unsecured Loan
- Annual income should be more than Rs. 4 lakh after all liabilities and expenses are deducted.
- The co-applicant’s CIBIL score ought to be higher than 700.
- Students must have a GRE score of at least 300 in order to study in the United States.
- IELTS scores for all other nations should be greater than 6 or 6.5 bands.
- The applicant’s parents must possess a home of their own.
Courses Not Applicable for Unsecured Education Loans
- MBBS degree
- Pilot Aviation programs
- Integrated courses
- UG degree or certificate courses
- Pathway course
- Foundation courses
List of Banks for Education Loan without Collateral
- HDFC Bank: Up to Rs. 45 lakh
- State Bank of India: Up to Rs. 1.5 crore
- IDBI Bank: Up to Rs.20 lakh
- Punjab and Sind Bank: Up to Rs.20 lakh
- Bank of India: Up to Rs.20 lakh
- HSBC: Up to Rs 5 lakh
- ICICI Bank: Up to Rs.1 crore
Application Process for an Unsecured Education Loan
Step 1: Determine which non-collateralized foreign education loan best suits your needs.
Step 2: Carefully check over all the loan details, including the interest rates, repayment terms, moratorium period, and any unique features provided by the Indian government for education loans for overseas study.
Step 3: Go to the lender’s official website and fill out the application for the education loan you want to apply for.
Step 4: Complete the online application form that the lender has provided. Give accurate and comprehensive information.
Step 5: Scan and upload the required paperwork. These papers could include financial statements, an acceptance letter, academic transcripts, or any other documentation the lender requests.
Step 6: Submit the application form once it has been filled out and the necessary files have been uploaded.
Step 7: Wait for the outcome of your loan application from the lender. Depending on the lender, the processing time may differ, but often you will hear back within a specific time frame.
FAQs
What aspects are taken into account when granting an Unsecured education loan?
Future income of the borrower and co-borrower, as well as their creditworthiness, are the two distinct criteria taken into account when offering an education loan without collateral.
Is there a processing fee if I apply for an education loan without putting up any collateral?
Indeed, obtaining an education loan without collateral may result in a processing charge. Processing fees vary based on the lender.
What benefits come with student loan without collateral?
In brief, the following are some benefits of an education without collateral: a speedy turnaround time, paperwork is reduced.
Do student loans without collateral carry a higher interest rates?
Yes, since the lenders do not require any collateral to protect their interest in the event that the borrower defaults on the loan, they do charge higher interest rates for education loans without collateral.
Which banks provide an education loan without collateral?
Collateral-free education loans are offered by the majority of private and public banks. Public banks offer education loans up to Rs. 7.5 lakh, while private banks offer loans up to Rs. 40 lakhs without the need for security. In addition, a number of NBFCs offer education loans devoid of security.
What documents are required in order to apply for an education loan without collateral?
Documents such as an offer letter from the institution, family income proof, academic records, a birth certificate, a PAN card, an Aadhar card, a bank statement, proof of address, a properly completed loan application form, and a self-declaration are required in order to apply for a collateral-free education loan to study abroad.