Every year, more than 500,000 Indian students dream about pursuing a degree abroad but only a few hundred thousand students can actually make it a reality. What do you think is the biggest turn-off for these many students? It’s the finances that are related to their preferred study destinations. Although there are a lot of loan options, grants, and scholarships available for them that they are unaware of most of the time.

So, to answer some of the commonly asked questions on the internet like what is the best study loan for Australia without security or types of scholarships to study in the UK, or what things I can keep as security to pursue my master’s degree in the USA, etc., understanding the types of loans becomes important. So let us go ahead in this article and list down the popular loan options for overseas higher education along with some popular financial institutions,

Types of Overseas Education Loans

When considering financing higher education abroad, it is essential to understand the available loan options, mainly there are two types of Overseas Education Loans,

1. Non-Collateral Loan

A Non-Collateral Loan doesn’t require any security or collateral, making it an attractive option for students who lack assets to pledge or prefer not to risk their belongings. With non-collateral loans, students can access funds for tuition fees, accommodation, and other study-related expenses without the need for collateral. Additionally, these loans often offer flexible repayment terms and competitive interest rates, providing students with financial assistance while minimizing financial risk.

Popular Banks for Non-Collateral Loans

1. Nationalized Banks
The listed below are some of the government banks that give non-collateral loans,

  • State Bank of India: Nationalized banks like State Bank of India (SBI) offer non-collateral education loans for studying abroad. For instance, SBI’s Global Ed-Vantage scheme provides financial assistance for higher studies in recognized overseas institutions without needing collateral.
  • Punjab National Bank: Similarly, Punjab National Bank (PNB) offers the PNB Udaan scheme, catering to Indian students’ financial needs for studying abroad. These loans cover expenses like tuition fees, accommodation, and travel.

2. Private banks
Some non-nationalized banks and financial institutions also provide non-collateral education loans. Some of these banks are,

  • Axis Bank: The Axis Bank education loan for abroad without collateral funds tuition fees, travel expenses, and other study-related costs. This option allows students to pursue education aspirations without requiring security.
  • HDFC Bank: The HDFC Credila Financial Services PVT. Ltd is the branch of HDFC Bank that provides overseas education loans without collateral.


2. Collateral Loan

Collateral loans demand students to provide collateral or security against the loan amount. These can include assets such as property, fixed deposits, or life insurance policies. While collateral loans may offer higher loan amounts and lower interest rates than non-collateral loans, they involve more risk as borrowers must pledge their assets. Some of the popular private and government banks for collateral loans are listed below,

Nationalized Banks
Almost all the nationalized banks give a collateral loan but some of the popular ones are,

  • Bank of Baroda: Bank of Baroda’s Baroda Scholar scheme offers financial aid to Indian students for pursuing higher education overseas against tangible collateral security.
  • Canara Bank: Similarly, this bank provides education loans against collateral under its Canara Vidya Jyothi scheme.

Private Banks
The following private banks give collateral loans at favorable terms to Indian aspirants,

  • ICICI Bank: ICICI Bank offers collateral education loans for studying abroad. Students can avail of loans against residential or commercial property, fixed deposits, or other assets. The ICICI Bank Education Loan for Abroad provides competitive interest rates and flexible repayment options.
  • Kotak Mahindra Bank: Kotak Mahindra Bank provides collateral education loans to finance higher education abroad. Under their loan scheme, students can pledge assets such as property, fixed deposits, or securities to secure the loan amount. This loan option also offers attractive interest rates and repayment terms suited to the student’s financial situation.

In conclusion, collateral and non-collateral education loan for abroad offer viable options for Indian students aspiring to study abroad. While non-collateral loans offer flexibility and accessibility, collateral loans provide higher loan amounts and lower interest rates.

Students should assess their financial situation carefully and choose the loan option that best suits their needs. To make this informed decision don’t forget to take help from a financial advisor.