Education loans are a lifeline for students aiming to pursue higher studies in India or abroad, especially when personal funds fall short. However, the collateral requirement can often become a barrier for many, particularly for those without valuable assets. This is where students can get an education loan without collateral, offering an alternative solution. These loans provide the financial support needed for education, without the need for assets to back the loan, making higher education more accessible for a wider range of students. Let’s explore the details here.
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Can I get an Education Loan without Collateral for Domestic Studies?
Yes, you can avail of education loans without collateral for domestic studies. However, you must fulfil the eligibility requirements. The primary eligibility factors include your academic performance, admission to a recognized institution, and the course’s credibility.
Banks typically offer non-collateral loans to students with good academic records and for courses at reputed institutions.
For domestic studies, banks generally offer unsecured loans up to INR 7.5 lakh. For loans exceeding this amount, collateral may be required, especially if the course is at a non-premium institution.
| Can I get collateral-free education loans for higher studies in India? | Yes |
| What is the maximum loan amount? | Up to INR 7.5 lakhs |
| Can I get collateral-free loans higher than INR 7.5 lakhs? | Yes, with HDFC Bank, ICICI Bank, Axis Bank, Bank of Baroda, etc. you can get it. |
Here’s a table listing some of the banks offering collateral-free education loans for domestic studies-
| Bank | Loan Amount (Collateral-Free) | Eligibility Criteria |
| State Bank of India (SBI) | Up to Rs. 7.5 lakh | For recognized institutions and courses |
| Bank of Baroda | Up to Rs. 40 lakh | For recognized institutions in India |
| HDFC Bank | Up to Rs. 50 lakh | For select institutions and recognized courses |
| ICICI Bank | Up to Rs. 1 crore | For selected courses and institutions |
Also Read: Check out the FAQs on the Restructuring 2.0 Scheme of RBI that provides benefits to the borrowers affected by the COVID-19 pandemic.
Can I get an Education Loan without Collateral for Abroad Studies?
Yes, you can get education loans without collateral for higher studies abroad. You can avail of higher loan amounts for collateral-free education loans abroad. Some banks like ICICI Bank offer collateral-free education loans of up to INR 1 crore for premium institutes.
These loans can be availed even before admission, providing financial assistance at an early stage. During the moratorium period, no EMI payments are required, making it easier for you to focus on your studies.
Additionally, these loans provide 100% financing, flexible repayment options, and no pre-payment penalties. The loan process is often quick, paperless, and hassle-free. However, these loans require a co-borrower (such as a parent or guardian) to enhance eligibility.
Check out the list of banks offering higher loan amounts for education loans without collateral to study abroad-
| Banks | Maximum Loan Amount |
| ICICI Bank | Up to INR 1 crore |
| Axis Bank | Up to INR 75 lakhs |
| HDFC Bank | Up to INR 50 lakhs |
| IDFC First Bank | Up to INR 50 lakhs |
| Union Bank of India | Up to INR 40 lakhs |
Also Read: The majority of applicants are unaware of the reasons behind their education loan rejection. Read this blog to find out about the same.
Overview of RBI Guidelines on Education Loans without Collateral
The Reserve Bank of India (RBI) has established comprehensive guidelines for education loans, particularly focusing on loans without collateral. These RBI guidelines on education loans aim to make education loans accessible to a larger section of students.
- You can avail of education loans up to INR 4 lakh without needing any collateral. For loans between INR 4 lakh and INR 7.5 lakh, a third-party guarantee is required, while loans exceeding INR 7.5 lakh necessitate tangible collateral
- The RBI mandates that banks offer education loans at reasonable interest rates, which are typically linked to the Marginal Cost of Funds-based Lending Rate (MCLR) or Repo Linked Lending Rate (RLLR). This regulation helps prevent excessively high rates.
- To qualify for unsecured loans, students typically need a co-signer with a strong credit profile and must meet specific academic and institutional admission criteria.
- The funds from education loans can be used for various educational expenses, including tuition fees, hostel charges, and other related costs, enhancing accessibility for students pursuing higher education.
This is about getting education loans without collateral to study in India or abroad. While unsecured loans do not require collateral, they typically come with higher interest rates to mitigate the lender’s risk due to the absence of security.
To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
FAQs
Yes, education loans can be availed without collateral, especially for amounts up to INR 7.5 lakh in India for recognized institutions.
Interest rates on collateral-free loans typically range from 8% to 14%, depending on the bank, loan amount, and type of course.
Public banks like SBI, Bank of Baroda, and Punjab National Bank offer education loans without collateral for amounts up to INR 7.5 lakh.
Generally, loans above INR 7.5 lakh require collateral, but some banks may offer unsecured loans up to INR 20 lakh for high-ranking institutions.
Yes, banks offer 100% financing without collateral for certain courses at recognized institutions, especially within a specified loan amount.
There is no fixed minimum income, but banks typically require a stable income from co-borrowers, especially for loans above INR 7.5 lakh.
Banks like SBI, HDFC, and ICICI provide easier access to collateral-free education loans, especially for students with a good academic record.
Yes, students from low-income families can qualify for collateral-free loans, especially if they have strong academic credentials and choose recognized institutions.
Benefits include no need to pledge assets, quicker loan processing, and repayment flexibility. It’s ideal for students lacking collateral.
A CIBIL score of 650 or above is typically required for unsecured education loans, though a co-borrower’s score can also play a role in approval.
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