Education Loan Without Collateral

Looking to study abroad after 12th but worried about student loan collateral? This comprehensive guide will explain you, how Indian students can secure education loans without collateral. Make your higher education dreams a reality without financial barriers and pledging your house, FD or any other asset.

Want to borrow a student loan to pursue higher education after Class 12th? You are not alone. It is a dream for many Indian students. Another thing relatable to most students is that their family does not have enough money or property to pledge as collateral for education loan. In this case, you need to apply for a student loan without collateral.

Such types of loans are known as unsecured loans. Banks and NBFCs offer study loans to meritorious students without any collateral. In this guide, we'll explore how you can borrow an education loan without collateral, including eligibility, the application process, and more.

Related Blogs: 

• Steps to Apply for an Education Loan
• How to Repay Education Loan Faster?
• Public Vs. Private Education Loan Providers

What is Education Loan Without Collateral?

Education loan without collateral is also known as an unsecured education loan. It allows students to borrow money for their studies without pledging any property.

Imagine you want to borrow money from banks for your studies, but banks will ask you to pledge something against the loan. These could be things like a house, land, or any other valuable assets (like fixed deposits or gold) that you can offer to the bank as a guarantee. This "guarantee" is called collateral.

There are several factors on which banks decide whether to offer you a study loan without security or not, such as:

• Your academic profile.
• The popularity of the course you choose.
• The university's reputation where you secured admission.
• The co-applicant's credit profile.

Eligibility to Get Non Collateral Education Loan?

Lenders offer loans to those students only who have fulfilled the education loan eligibility criteria set by them. Canadidate's age, education, and co-applicant's CIBIL profile are important points of eligibility. Other than these, there are some other points which play an important role to get non collateral education loan. 

Here we have mentioned some point-wise eligibility for students, co-applicants:

Is It Possible to Get a Loan After 12th Without Collateral?

Yes, many students who have just passed 12th can apply and get study loan without collateral. Especially if they have secured admission into top-ranked universities. Basically, lenders consider factors like:

• University/institution ranking
• Type of course (preferably high-ROI ones like STEM, management, etc.)
• Co-applicant’s creditworthiness and income
• Your academic record (10th & 12th marks)

These factors help lenders reduce the lender’s risk, making them more comfortable offering unsecured loans.

Education Loan Providers With No Collateral

Here is a quick comparison of top education loan providers, providing unsecured loans with interest rates:

Popular Courses and Countries For Non-Collateral Education Loans

Unsecured education loans offer a significant advantage for students seeking to pursue higher education. Note that banks offer student loan without collateral only for selected courses in selected countries. If you have secured your admission in a highly demanding course offered by top universities, both internationally and within India, then your loan will get approval easily.

Countries for International Study

Most unsecured education loans are specifically designed to support students admitted to prestigious institutions in the following countries:

• USA

• Canada

• UK

• Germany

• Ireland

• Australia

• New Zealand

• Finland

• Singapore

Other than this, you can check the eligibility of the bank for the list of approved countries.

High Demand Courses

A diverse range of academic disciplines and professional programs are typically covered under unsecured education loan schemes, reflecting the demand for skilled professionals in these fields:

Documents Required for Education Loan

The list of documents required for an education loan is same for secured and unsecured types. Check out the list here:

How to Apply for Education Loan Without Collateral

To apply for a student loan without collateral, you need to follow these steps mentioned below:

1. Research & Shortlist: Analyse the loan offers from different banks and lenders. Then identify lenders offering collateral-free loans for your desired course/university.
2. Check Eligibility: Verify criteria on their website or with an agent, focusing on university ranking, academic profile, and co-applicant's financial standing.
3. Gather & Submit: Collect all required documents (admission letter, academic records, ID, income proof) and submit your application.
4. Await Approval: Expect a 5-10 working day approval period.
5. Loan Disbursal: Funds will be directly disbursed to your university, often in tranches.

Useful Reads

How to Improve Your Chances of Getting a Loan Without Collateral

• Get admission into a top-ranked or reputed university
• Score well in academics, especially in 10th & 12th grade
• Have a strong co-applicant (good CIBIL score & stable income)
• Organize your documents clearly (admit letter, fee structure, ID, etc.)
• Choose job-oriented courses with good career prospects (e.g., STEM, MBA)
• Take expert help if needed. Loan advisors can connect you with the right lenders.

That's all about the topic. Remember, you can get a student loan without collateral from a bank to study abroad or in India. There are some pros and cons for this. You need to analyse it well and then make a decision.

Students who wish to study abroad may get in touch with India’s top-rated loan providers and apply for an education loan through Shiksha Study Abroad.