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How To Get An Education Loan For Abroad Studies Without Collateral

Without providing any collateral as a guarantee to the lender, an education loan for abroad studies without collateral, or a non-collateral education loan, can be obtained. That implies that borrowers can obtain loans without providing any form of security, such as a home, a piece of land, or anything else. Up to 50 lakhs can be borrowed by students for their education. In this blog, you will gain insights into non-collateral loans, including eligibility requirements, procedures, and some additional reasons why lenders might have rejected loan applications.

We will also review all the required information before applying for a non-collateralized education loan for international studies. In recent years, the Indian study-abroad market has seen a significant increase in the use of education loan in India for study abroad as financial aid. Education loans are becoming more popular and in demand, whether it's due to their ease of accessibility or the large number of Indian students who want to study overseas. As there is no need for security when applying for an education loan, a loan for study abroad without collateral is even more alluring. Numerous banks in India provide uncollateralised loans for international schooling.

What is a Collateral Loan?

There are two sorts of educational loans. A secured loan is one that includes collateral, whereas an unsecured loan does not. A collateral loan is one in which the borrower provides the lender with a specific value, asset, or piece of property as security for the amount borrowed. This helps the borrower acquire a loan at a cheap interest rate for the long term while protecting the lender's interest in the event that the borrower is unable to repay the loan amount.

A collateral is a piece of property that borrowers can use to secure the loan amount. Any asset, including real estate, fixed deposits, farmland, gold, etc., can be used as collateral. Numerous Indian banks provide study abroad loans without collateral up to a specific quantity or amount, making it simpler for international students to continue their education at the top colleges throughout the world. Additionally, it has been shown that unsecured study-abroad loans have slightly higher interest rates and shorter repayment terms.

Benefits of Education Loan without Collateral

  • Includes a broad range of courses and colleges in several nations
  • The typical range of interest rates for unsecured student loans is 10.50% to 14%.
  • Students may apply for this loan with a co-signature applicant
  • These loans have no grace period.
  • The student is eligible to borrow between Rs. 40 lakh and Rs. 50 lakh without putting up any collateral.
  • Loans are available before admission, and the moratorium period's EMI payments are not necessary.
  • 100% of the cost of higher education is covered.
  • Top-up loans are also available to students.
  • No early payment fee
  • Flexible options for repayment
  • A speedy and paperless procedure

Types of Education Loan without Collateral

Without putting up any security, the student is qualified to borrow between Rs. 40 lakh and Rs. 50 lakh. Loans are available prior to admission, and EMI payments during the moratorium period are not required.The full cost of higher education is subsidised & students may also apply for top-up loans. Zero early payment penalty & Flexible repayment alternatives, a quick and paperless process.

● Unsecured Education Loans – Loans without collateral

An education loan for international studies without collateral does not require the borrower to pledge any collateral as security, in contrast to an education loan with collateral. Borrowers who are applying for an education loan for abroad studies without collateral must provide supporting documentation and meet all qualifying standards. They are only approved for applicants and co-signers who have a solid credit history and the academic and professional credentials to succeed financially following upskilling at the master's programme they have applied to. Because the lender does not require any security, these loans typically have higher interest rates. However, lenders with strong financial foundations and credit engines can provide borrowers with cheaper interest rates.

● Secured Education Loans – Loans with collateral

Collateral is a pledge of an asset as security to the lender for the repayment of your student loan. Personal real estate, home equity, and personal automobiles are examples of tangible assets that can be used as collateral. An education loan can be secured with pay stubs, cash or savings accounts, investment accounts, paper investments, fine art, jewels, or collectables. If you and your co-signer are unable to repay your student loan, the lender may seize these assets to make up for the loss they suffer.

What are the eligibility criteria for an abroad education loan without collateral?

A loan without collateral for study abroad requires applicants to meet specific eligibility criteria like

  • A high school GPA of at least 60% is required to ensure employability
  • Income of the financial co-applicant
  • degree course of study that the applicant hopes to enrol
  • Country of the applicant's choice Institution to which the applicant is applying
  • Some private banks only offer services to certain nations and academic specialisations.

Let's move on to the documentation, which is particularly important when requesting the best education loan for abroad studies. in order to apply for a student loan without collateral for studying abroad. A few relevant documents, which are stated below, must be submitted:

  • Application form for the loan
  • Income proof for the family (income tax returns, property proof, etc.)
  • Standardised test scores
  • Academic transcripts
  • Aadhar card (KYC documents)
  • Birth certificate
  • Bank statements for the past 6 months
  • PAN Card
  • Residential proof
  • Acceptance letter from university abroad
  • Self-declaration

Application Procedure to Apply for Education Loan without Collateral

There are several ways of applying for a student loan:

  • Apply Online:

Step 1: This is the quickest and most practical method of application. There are two ways to submit an online application. The first is a simple online application form that you fill out, attach the required paperwork, and submit.

Step 2: In the second step, you apply by supplying all the necessary information. The lender will then contact you to go through the loan's terms before moving forward with the application.

  • Offline

Step 1: Go to a Branch: To apply for a loan, go to your local branch with the required paperwork, speak with a representative about the terms of the loan, fill out the application in person, and submit it.

Step 2: Call the Lender: You can call the lender or, by expressing your interest, ask for a callback. After that, you can discuss the loan's terms and submit an application.

Documents Required for Education Loan without Collateral

The following is the list of documents required to avail of an education loan without collateral:

  • University offer letter mentioning tuition fees
  • Academic documents
  • Employment documents
  • KYC documents of both applicant and co-applicant
  • Address proof along with electric bill
  • For salaried co-applicant, income proof to be provided are as follows:
  • ITR
  • Form 16
  • Salary slip
  • Salary account detail
  • For business owners, income proof to be provided are as follows:
  • ITR
  • Profit & loss account
  • Balance sheet
  • business registration certificate
  • Business current account
  • Applicant's saving account details

What is the processing fee for an education loan?

Bank

Collateral

Loan Amount

Punjab National Bank Education Loan

Nil Up to Rs.7.5 lakh

Need Based

SBI Education Loan

No collateral or third-party guarantee required up to Rs. 7.5 lakh

Zero processing fees for loans up to Rs.20 lakh

Axis Bank Education Loan

Can secure a loan before admission based on profile.

Unsecured loans up to Rs.20 lakh for working professionals.

Bank of Baroda Education Loan

---

Maximum Loan Amount: Rs.150lakh

HDFC Bank Education Loan

No collateral required up to Rs.7.5 lakh

Maximum loan amount is Rs.1.5 crore

Tata Capital Education Loan

Collateral: Nil Up to Rs.4 lakh

Maximum loan amount of Rs.30 lakh

Top Lenders to Apply for Education Loan without Collateral

Name of Bank

Interest Rate (p.a.)

Processing Fees

PNB

8.80% onwards

0.35% of loan amount

SBI

7.95% onwards

Up to Rs.10,000

No charge required for loan amount below Rs.20 lakh

Loan amount above Rs.20 lakh: Rs.10,000 (plus taxes)

Axis Bank

13.70% to 15.20%

2.00% of the loan plus GST

Bank of Baroda

8.50% onwards

No processing charges up to Rs.7.50 lakh1% of loan amount up to Rs.10,000

HDFC Bank

9.55% to 13.25%

(full-time course)

12.75% (part-time study)

Up to 1% of the loan amount or a minimum of Rs.1000 (whichever is more) or Abroad/Part Time/Special Initiative cases

Kotak Mahindra Bank

Up to 16%

Nil

Federal Bank

11.95% onwards

Contact the bank

Which Banks give education loans without collateral for abroad?

  • HDFC Bank
  • State Bank of India (SBI)
  • Punjab and Sind Bank
  • IDBI Bank
  • ICICI Bank
  • Kotak Mahindra Bank
  • Federal Bank 

Well, that was extensive coverage, but we have got more information for you at AECC. AECC is the right place to expedite your education endeavours with assistance in all aspects, from finding accredited courses to an ideal destination and a leading institution. The expert counsellors provide guidance and will bring your dreams to life.


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