Thousands of students venture abroad for quality education. Education loans are the most common way in which the enormous costs that come with studying abroad are covered. Seeing the ever-growing need, organizations are trying to support students from all backgrounds. Education loans without collateral or unsecured education loans are ways in which students can avail of loans. If they do not have assets to offer as collateral. This is beneficial for those who have offers from reputed universities from around the world. Briefly if they are stuck in arranging funds for their education.
This Blog Includes:
- Education Loan without Collateral: Meaning
- What if You Don’t Have any Collateral or Security?
- Education Loan without Collateral: Process
- Options for Securing Education Loan without Collateral
Education Loan without Collateral: Meaning
Just like any normal loan, banks that give education loans also require some collateral. This is to be put in as cover against the amount of the loan. In case, the repayment stops midway, this collateral can be used by companies to recover the loan amount. Besides the Collateral can be anything from an asset such as land or house to an insurance corpus. It can also be time deposits like a fixed deposits. Education loans that do not require any such collateral are termed education loans without collateral or unsecured education loans. Typically, such loans carry a higher interest or rigid repayment mechanism.
What if You Don’t Have any Collateral or Security?
There are plenty of education loans available without collateral as for some it is difficult to have such securities. Many popular finances of the country offer education loans without collateral. Listed below are the important points you must keep in mind while seeking the same-
- You may not pledge to any government bank for collateral if you are availing loan of up to INR 4 Lakh
- As per RBI, all the banks of the country have the provision to grant education loans without collateral up to INR 7.5 Lakh when all the criteria are met.
- For those seeking a loan more than INR 7.5 lakh, they can opt private or NBFCs as they provide a loan of upto INR 50 lakh without collateral
Education Loan without Collateral: Process
- Submission of Application Form: This can be submitted online or at the office location.
- General documents:
- Passport Photos
- Residence Proof
- Photo Identity Card
- Academic Qualification Certificates:
- 10th and 12th Marksheets
- Graduation Marksheets (if applicable)
- Proof of Admission: This is the official offer of admission. It states that this particular student has been offered admission at the university. It also lists the deposit amount to be submitted to block the seat. Also, other conditions on which the offer has been given.
- Last 8 months bank statement of co-applicant
- Income proof of co-applicant
- Collateral details (if available)
Options for Securing Education Loan without Collateral
Here are some of the best options for education loan without collateral in 2021-
Incred Financial Services is a non-banking financial corporation registered with the Reserve Bank of India. It gives an education loan without collateral of up to INR 40 lakhs. This includes a variety of fees and other expenses. Incred covers over 700 universities in the USA, Canada, France, Netherlands, Germany, Singapore, Ireland, and Australia.
Study abroad loans offered at Auxilo are tailor-made according to the needs of the applicant. It also offers unsecured education loans which are evaluated according to the talent and aptitude of the individual. Factors considered are the university of admission, previous record, and test scores amongst others. There is no condition of a higher limit of loan. A number of expense heads are covered by the company.
Education loans without collateral of fewer than 20 lakhs can be availed through HDFC Credila. Similarly, an HDFC Ltd company that was among the first companies to offer education loans in India. It also provides 100% loan cover with the provision of no margin money. Also, 10-year repayment, and a host of other facilities.
KC Mahindra Scholarships for Postgraduate Studies Abroad
This is a competitive scholarship scheme for prospective postgraduate students run by the K. C. Mahindra Education Trust. As part of the award, a handful of deserving applicants are selected. The students who have been accepted to reputable universities abroad will get the interest-free loan scholarships.
Gyandhan is an education-centered platform that serves as a marketplace for students and relevant lenders. It has partnered with a large number of financial institutions. Gyandhan helpsstudents looking for an education loan without collateral. It is the evaluation of schemes in terms of interest rates charges, repayment structure, margin money, hidden fees, etc. It does not charge students for any of its services.
An education-focused non-banking financial company, Avanse offers educational loans without collateral for studies in over 40 countries and 100 universities. It affords students with 100% tuition fee coverage, complete living expenses cover, and partial travel expenses cover. Such loans are subject to a high degree of scrutiny before approval.
Started 11 years ago, Prodigy Finance is an international education-financing company that provides student loans for international postgraduate education. It is a unique company that specifically focuses on education loans without collateral. Rather, it takes into account the offer of admission. The future earning potential of the candidate to evaluate the loan amount.
Punjab National Bank (PNB) Pratibha Education Loan
For the merit students willing to pursue higher education in elite institutes of India, the PNB bank offers Pratibha scheme. As a popular education loan without collateral, it offers assistance up to 4 lakh. Available for the ones willing to pursue business, engineering, medical, or other courses. Students shall have a parent as a co-applicant to secure the loan. They must repay it within a tenure of 15 years.
SBI Loan for Vocational Education and Training
Best scheme for the students who aspire to set up a career in the vocational field. Also, eager to pursue vocational courses, this can be the best scheme for them. They can avail loan of INR 50,000 if the duration of the course is less than 6 months. In case the course lasts for a duration of one year or more, the amount goes up to 1 lakh. Under the scheme, there is no process charging for The lone and parents can act as co-borrower.
Axis Bank Education Loan
For students who are exploring education loans without collateral to study abroad, this can be the best option for them. Without any collateral, they can seek a loan of INR 400000 without any margin being applicable. Applicants must know that, in this scheme, the collateral requirement is optional. It is similarly subjective and will be proceeded on if there is no job security for repayment capacity.
Here is a guide on Loans to Study Abroad.
Some of the popular lenders are: Public banks like SBI, Bank of Baroda, Private banks like HDFC Banks and ICICI bank, NBFCs like Auxilo and Incred to name a few.
In contrast to commercial banks, which are known to charge up to 1% of the loan amount plus GST, public banks do not impose processing fees for loans made without collateral for international education.
Two main advantages of applying for a loan without collateral for abroad education are: Faster processing time and Hasslefree paperwork.
An education loan without collateral is an innovative 21st-century technique that is helping thousands of students in achieving their dreams. But arranging to fund is still a back-breaking task. Leverage Edu experts have always lent a helping hand to students who are in need of funding or loans, you can opt for our Value Added Services so that nothing comes between you and your dreams.