How to Get a Collateral-free Education Loan for USA?

How to Get a Collateral-free Education Loan for USA

Getting education loans without collateral is a perfect way to secure funds for higher studies. One can secure funds without mortgaging an asset with the lending institution. Many aspiring students prefer to take collateral-free education loans for the USA from various sources like public banks, private banks, and NBFCs. The maximum amount of education loans without collateral to study in the USA may differ based on the sources it is availed from. In this blog, we will help you discover and learn all about collateral-free education loans in the USA.

What are Collateral-free Education Loans?

Collateral-free education loans are unsecured loans which do not require a property/ asset to be pledged with the banks, but, a financial co-applicant may be required. The loan processing time is less due to relaxed requirements and minimal documentation relating to assets.

However, the eligibility criteria are stringent considering the creditworthiness and financial stability of the applicant and co-applicant. Interest rates are also a little high due to the absence of collateral/security. 

Also Read: Check this article to find out how to get an education loan without a guarantor and fund your education abroad without risking your assets.

Collateral-free Education Loan for the USA

Despite high expenses, many Indians aspire to pursue higher education in the USA, one of the top 5 study-abroad destinations. The reasons include academic excellence, a flexible education system, vibrant campus life, and easy availability of collateral-free education loans for USA studies.

In this section, we will explore the different lenders in India providing unsecured study loans for the USA. 

Collateral-free Education loans from NBFCs

NBFCs are non-banking financial companies that provide collateral-free loans to study in the USA up to INR 75 lakhs at interest rates starting from 11.50% p.a. They offer higher loan amounts and more flexibility in repayment options. The table below includes the maximum financing by the top 5 NBFCs and the interest rates-

NBFCsQuantum of FinanceInterest Rates
InCred FinanceUp to INR 60 lakhsStarting at 12.25% p.a
Avanse Financial ServicesUp to INR 75 lakhsStarting at 14.25% p.a
AuxiloUp to INR 40 lakhsStarting at 12.70% p.a
Prodigy FinanceUp to 100% cost of studying abroad Starting at 11.50% p.a
HDFC CredilaUp to INR 7.5 lakhs
Up to INR 20 lakhs can be offered to exceptional students without collateral
Starting at 13.80% p.a

Also Read: Know all about LLB education loans to study abroad and the best public banks, private banks, and NBFCs providing education loans for LLB students. 

Collateral-free Education Loans from Private Banks

Private Banks like Axis Bank, IDFC Bank, HDFC Bank and others provide collateral-free education loans for the USA up to INR 1 crores. Education loans from private banks are sanctioned within 15 days of submitting the application form and required documents. One of the advantages that students can avail of is income tax rebates on education loans under Section 80E.

The table below includes the quantum of finance and interest rates on collateral-free education loans for the USA- 

Private BanksQuantum of FinanceInterest Rates
ICICI BankUp to INR 1 crore Starting at 10.95% p.a
Axis BankUp to INR 75 lakhs Starting at 10.70% p.a
IDFC First BankUp to INR 75 lakhs Starting at 10.50% p.a
HDFC BankUp to INR 45 lakhs Starting at 9.55% p.a
YES BankUp to INR 45 lakhs Starting at 12% p.a

Collateral-free Education loans from Public Banks

Public Banks are allowed to lend education loans of up to INR 7.5 lakhs as per the RBI guidelines on education loans. Students can avail of collateral-free study loans for the USA from top public banks like SBI, Bank of Baroda, Union Bank of India, and Canara Bank. Take a look at the table below and check out the interest rates.

Public BanksInterest Rates
SBI Bank10.40% – 14% p.a.
Bank of Baroda11.40% – 14% p.a.
Punjab National Bank9.25% – 14% p.a.
Canara Bank10% -14% p.a.
Union Bank of India10.50% – 14% p.a.

FAQs on Collateral-free Education Loans for the USA

Can I take a collateral-free education loan for the US?

Yes, an aspiring student can take study loans for the USA subject to fulfilment of eligibility criteria 

What are the best ways to get collateral-free study loans in the USA?

Many aspiring students prefer to take collateral-free education loans for the USA from various sources like public banks, private banks, and NBFCs.

Can I get a 20 lakhs education loan without collateral for the USA?

Yes, as per the RBI guidelines on education loans 2024, commercial banks can provide education loans of up to 20 lakhs to study abroad in the US or any other desired country.

Which bank is best for collateral-free education loans in the USA?

Public banks like SBI, Canara Bank, and Bank of Baroda are the best providers of non-collateral education loans for the USA up to 7.5 lakhs. Public banks like Axis, ICICI, and HDFC provide loans of up to 40 lakhs and prominent NBFCs including Avanse, Prodigy, and InCred lend up to 75 lakhs.

This was all about getting collateral-free education loans for the USA from public banks, private banks, or NBFCs based on their needs and requirements. This way applicants can pursue their global dreams without worrying about pledging an asset to the bank. 

To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.

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About Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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