How to Get Education Loan for Abroad Studies without Collateral

Many Indian students are now choosing to study abroad for their higher education, but one question remains for those in a lower stratum of society: “how to get education loan for abroad studies without collateral?” Pursuing higher education in a foreign economy means that you will be paying more than your home tuition, except for some other countries that have a lower exchange rate with India. The concern is that many students from middle-class backgrounds or even those who are from somewhere in between middle and upper and between middle and lower classes worry about arranging funds to pay off their loans for studying abroad.

They don’t have access to much money and resources to support their education costs and give banks a collateral/security guarantee that they will be able to pay back loans. If you are in a similar situation, then remember that you are not alone in this scenario, but is there a silver lining for such students who are constantly looking for an answer to the question: “how to get education loan for abroad studies without collateral?” Yes, the silver lining is the availability of an education loan without collateral to study abroad. We are going to walk through this process and understand how you can get a loan to pay for your education.

Get Loan Without Collateral!

Introduction to a Non-Collateral Education Loan

A non-collateral education loan is a type of student loan offered without the requirement to pledge any security or assets. Also known as an “unsecured loan”, it does not require a mortgage or any other form of security to cover the loan. Students who are thinking about how to get education loan for abroad studies without collateral can be assured that they will get an education loan. Depending on a specific bank’s policy, Indian students can borrow money from the bank for up to ₹40 lakhs or more for certain foreign institutions. The following are two ways to get a loan for study abroad:

• Secured loans – require collateral, such as a property, fixed deposits, or gold, and usually offer lower interest rates
• Unsecured loans – no collateral needed, but generally have a higher interest rate and stricter eligibility requirements

The financial institutions in India (including public and private banks) and other non-banking financial companies (NBFCs) will not use a property or other asset of a specific lender; they will be evaluating the profile of the lender to determine whether they are going to make the best possible investment in their respective countries and fields of study. This is how to get education loan for abroad studies without collateral. Assessing the profile of a lender ensures that a financial institution will be paid off by the lender in the future after utilising their education loan for abroad studies. These financial institutions will look at the following details to assess your profile:

• Academic background
• Academic performance
• Credibility of the university
• Credibility of the program 
• Income of the applicant (more on this later)
• Potential income of the lender in the future

Key Features of Non-Collateral Education Loans

Indian students who are learning how to get education loan for abroad studies without collateral should be aware of the fact that education loans come with a set of parameters that are very specific and relevant to be considered before applying for them. Here are the basic features of a non-collateral educational loan:

• Loan Amount: Up to ₹40 lakhs and can be higher for premier universities.
• Interest Rates: Generally between 10.5% and 14.5% per annum.
• Tenure: Up to 10–15 years, including a moratorium (grace period for the loan).
• Coverage: Tuition fees, living expenses, travel, health insurance, and other costs associated with the program.
• Co-applicant Requirement: A parent, sibling, or close relative with regular income.
• Moratorium Period: Usually covers the duration of the entire course plus an additional 6-12 months.

Eligibility for Non-Collateral Education Loans to Study Abroad

There are a number of factors that can influence how to get education loan for abroad studies without collateral. These include the following factors:

• Good academic background
• Confirmation of admission to a recognized university
• Co-applicant
• Age and income

Each financial institution has its own financial system and might have different policies, such as a specific score in standard tests, a list of countries that are eligible, and/or pre-approved lists of institutions. To apply, you must meet the following requirements for education loan to study abroad:

• Applicant is an Indian citizen 
• Secured admission to a recognised institution or university 
• Generally for full-time graduation, postgraduate education, or professional qualification
• A good academic record in the area of academic achievement (60% and above, depending upon the degree level and policy requirements)
• Financial standing of the co-applicant (stable income source and good credit score)

Required Documents

The next step in how to get education loan for abroad studies without collateral is the list of documents that are required to be provided. You must prepare and arrange the documents in a manner suitable to the degree and policy of the loan. The following documents are generally accepted as part of the requirements for education loan to study abroad:

For Student:

• Admission letter from the foreign university
• Academic records (10th, 12th, graduation mark sheets)
• Entrance exam scorecards (NEET, IELTS, GRE, GMAT)
• Valid passport
• Statement of estimated expenses
• Recent passport-size photographs

For Co-applicant:

• PAN card and Aadhar card
• Income proof (salary slips, Form 16, ITR for last 2–3 years)
• Bank account statements for the past 6 months
• Employment proof or business proof (if self-employed)

Top Lenders Offering Education Loans Without Collateral

To learn how to get education loan for abroad studies without collateral, research well and look for the right financial advisor to guide you through this process. There are many different kinds of financial advisors available to help you find an education loan without collateral. When you are looking for a loan, make sure that you assess the following parameters:

• Compare interest rates
• Check loan amount coverage
• Review payment terms and conditions
• Processing time for the educational loan

SBI

State Bank of India (SBI) is a public institution in India that provides financial services and loans to all students in need. The bank offers student loans for studying abroad for up to ₹7.5 lakhs under the standard education loan scheme without collateral. Under the “Global Ed-Vantage Scheme”, students trying to learn how to get education loan for abroad studies without collateral should know that their loans are more likely to be accepted with a stable co-applicant or enrolment in a top-tier university. However, the process is very complicated and might be time-consuming.

HDFC Credila

HDFC is India’s largest financial institution in the private banking sector with a specialised financial system of providing an education loan for abroad studies. A specialised NBFC has been established for assistance to students from India. The bank offers non-collateral loans for up to ₹45 lakhs for select universities in the USA, UK, Canada, and other countries. One of the main benefits is that the processing of loans is done quickly, even before you can get the visa or admission letter. There are customisable options for repayment of loans.

Axis Bank

Axis Bank is a private financial institution in India that guides students on how to get education loan for abroad studies without collateral. The bank provides loans up to ₹40 lakhs without collateral for well-known international institutions. They have attractive interest rates for students with a quick turnaround time and a user-friendly online loan process. However, the income of the co-applicant will play a circumstantial role in the approval of how to get education loan for abroad studies.

ICICI Bank

ICICI Bank is a multinational bank and financial services institution that offers student loans up to ₹40 lakhs for studies abroad, based on the academic profile and co-applicant’s financial background. Keep in mind that such high-value loans (exceeding the value of ₹20 lakhs) may still require additional documentation. Their student loans for studying abroad are popular for quick disbursement and flexible repayment.

Avanse Financial Services

Established in 2013, Avanse Financial Services is an NBFC offering Indian students a loan covering 100% of the total cost of education and living expenses. Students who try to find an option for how to get education loan for abroad studies without collateral often choose the Avanse education loan, which has customisable repayment plans and no upper limit if the profile is considered strong. They might have options to cover GRE/IELTS coaching fees.

InCred

Approved by the Reserve Bank of India (RBI), InCred Financial Services Limited is an NBFC offering loans without collateral up to ₹40 lakhs for selected countries and institutions. This group is known for its easy processing and a tech-driven approach for loan disbursement. While it is especially useful for students with an average academic score, a strong co-applicant is significantly necessary in how to get education loan for abroad studies.

Final Thoughts

Studying abroad can be exciting, yet there are challenges to managing the costs of studying and living in a foreign country. Fortunately, students who find themselves looking for options to learn how to get an education loan for abroad studies without collateral can be assured, as there are possibilities for getting such kind of financial aid. Thanks to numerous banks and financial institutions operating either privately or as NBFCs, rather than looking at your assets, they evaluate your academic performance and future earning potential to approve educational loans. You can ensure a smooth transition in the application process for an education loan with the right planning, keeping in mind what the eligibility criteria are and the required documents. The dream to study abroad is true now!

Want to know more about how to get an education loan for abroad studies? Education Vibes will help you to understand the parameters of such kind of education loans and guide you through the process of starting with your higher education in a prestigious university.