In the globalized world, pursuing higher education abroad has become a favoured choice for many students who want to step out of their comfort zones and gain a competitive edge in their careers. However, the cost associated with this aspiration can be overwhelming and financially burdening. Thus, a lot of students often prefer to take financial assistance through education loans.

Traditionally, obtaining an education loan meant pledging collateral as security against the loan amount. Fortunately, advancements in the financial sector have opened avenues for students to access substantial funds without the need for collateral security. Let’s discuss more about this ahead in the article.

Eligibility Criteria for an Education Loan Without Collateral

Before getting into the specifics of obtaining an education loan without collateral, it is essential to understand the eligibility criteria set forth by lending institutions. While the requirements may vary slightly between financial lenders, the following are common prerequisites for education loan for students to study abroad.

  • Academic Credentials: Applicants are generally required to have a strong academic background, including a high GPA or equivalent academic performance.
  • Admission to Accredited Institutions: Lenders often require proof of admission to recognized and accredited institutions abroad.
  • Financial Stability of Co-borrower: In the absence of collateral, lenders may require a co-borrower with a stable financial background to guarantee repayment.
  • Credit History: A healthy credit history, either of the applicant or the co-borrower, is usually a prerequisite for loan approval. CIBIL score of 700+ is highly recommended.
  • Repayment Capacity: Applicants must validate their ability to repay the loan through future earnings or existing financial resources.


Lenders Offering Loans Without Any Collateral for Foreign Education

Numerous prominent financial institutions cater to the growing demand for education loans without collateral, offering loan amounts with no minimum values and that go up to a maximum of 75 Lakhs INR. Let’s have a look at them.

Popular Financial Lenders Loan Amount for Collateral Free Loans
Union Bank of India Up to 40 Lakhs INR
Yes Bank Up to 50 Lakhs INR
ICICI Bank Up to 60 Lakhs INR
Axis Bank Up to 75 Lakhs INR
Avanse Up to 75 Lakhs INR (For USA) & up to 35 Lakhs INR (For Other Countries)
Prodigy Finance Up to 100K US$ for Masters

Steps Involved to Get an Education Loan Without Collateral

Applying for an education loan without collateral is much simpler than a loan application with collateral. Let’s discuss more about how to get education loan for abroad studies without collateral ahead.

  • Research and Shortlisting of Suitable Options: Begin by researching various lenders offering education loans without collateral and shortlist the ones that align with your financial needs and eligibility criteria.
  • Collecting Documents: Pile up all necessary documents required for the loan application process as specified by your lender.
  • Loan Application & Submission: Complete the loan application form accurately and submit it along with the requisite documents to the lender. Be sure that all information provided is true and verifiable to avoid any delays or discrepancies in your loan approval process.
  • Bank Verification and Approval: The lender will verify the submitted documents and assess your eligibility for the loan based on the predetermined criteria. If your loan application is approved, then the loan amount will be disbursed directly to the university or institution, as per the terms and conditions agreed upon.

The best part about taking a collateral-free education loan is that the entire process is quick and sometimes you get your loan sanctioned within 48 hours as well. So, be it a non collateral education loan for USA or any other leading study destination, your funding is sorted.

This is everything that you need to know about the collateral-free loan application process if you want a loan amount of 20 lakhs and beyond.

Be mindful of repaying the loan amount on time so that you don’t have to pay a lot of interest or loan penalties. Explore various options and schemes offered by popular banks and financial lenders and follow the stepwise process for your loan application.

Make the most of this funding assistance and be responsible with your financial management while you live abroad to have a brighter future ahead.