Financial-Aid • 1 MAR, 2024

Get Student Loan without Collateral, Bachelor's Degree Abroad

Here’s How You Can Secure A Student Loan Without Collateral For Your Bachelor’s Degree Abroad!

As an Indian student aspiring to pursue higher education abroad, you may be faced with the challenge of financing your bachelor’s degree without having collateral to offer as security for a loan. The good news is that you can indeed secure a student loan without collateral, allowing you to fulfil your dreams of studying abroad. In this comprehensive guide, we will explore the process, eligibility criteria, and various options for student loans without collateral for a bachelor’s degree abroad.

Understanding Education Loans Without Collateral

When it comes to financing your education abroad, it’s important to understand what exactly an abroad education loan without collateral entails. This type of loan is granted without requiring any form of security or collateral from the borrower.

Unlike traditional loans that may require assets like property or fixed deposits as security, non-collateral education loans allow you to fund your studies solely based on your academic profile, financial co-applicants income, chosen course and country, and the university you plan to attend.

Eligibility Criteria for Non-Collateral Education Loans

To be eligible for a non-collateral education loan for abroad, certain criteria must be met. These criteria typically include:

Academic Profile: Lenders evaluate your academic profile to assess your employability potential. Most lenders require a minimum of 60% in your 10th, 12th, and undergraduate degrees. Students with more than three backlogs may face challenges in securing an unsecured education loan.
Financial Co-Applicants: The income and creditworthiness of the financial co-applicant play a crucial role in the approval process. Since there is no collateral involved, lenders rely on the financial co-applicant to ensure loan repayment.
Course/Degree: Lenders typically prefer courses in STEM disciplines or those that are job-oriented. While UG and PG programs in these fields have a higher chance of approval, courses like PhD, MBBS, theology, and tailoring may not be eligible for non-collateral education loans.
Country: Major study-abroad destinations such as the US, UK, Canada, Australia, Ireland, and Germany are more likely to be approved for student loans without collateral a bachelor’s degree abroad. Less-known countries may pose greater risks for lenders.
University: Private banks maintain a list of approved universities for a student loans without collateral, Bachelor’s degree abroad. It’s essential to ensure that your chosen university is on this list to increase your chances of loan approval.

Required Documents for Non-Collateral Education Loans

When applying for a non-collateral education loan abroad, you will need to submit certain documents to support your application. These documents typically include:

KYC Documents: Identity proof such as PAN card, Aadhar card, passport, etc.
Passport-size Photographs: Recent photographs of both the applicant and co-applicants.
Bank Statements: Bank statements for the past six months to demonstrate financial stability.
Academic Records: Mark sheets and passing certificates from 10th grade onwards, as well as scores from relevant entrance tests like IELTS or TOEFL.
Offer Letter from the Institute/University: A copy of the offer letter from the university or institute you plan to attend, along with the fee schedule.
Income Proof of Co-Applicant/Borrower: Salary slips or Form 16 to verify the co-applicants income.

It’s important to note that different lenders may require additional documents based on their specific requirements. Consulting with a financial officer or visiting the lender’s website will provide you with detailed information regarding document submission.

Public and Private Lenders for Non-Collateral Education Loans

Now that you understand the eligibility criteria and required documents, let’s explore the options available to you when it comes to student loans without collateral and bachelor degree abroad. Public and private banks, as well as NBFCs (Non-Banking Financial Companies), offer non-collateral education loans to students looking to pursue their bachelor’s degree abroad.

Public Banks: Public sector banks like SBI, Bank of Baroda, and Union Bank can provide non-collateral education loans up to 7.5 lakhs INR. However, for top-tier institutes in India, SBI offers unsecured education loans of up to 40 lakhs INR.
Private Banks: Private banks like Karur Vysya Bank, ICICI Bank, Axis Bank, IDFC First Bank, and HDFC Bank offer higher loan amounts compared to public banks. Loan limits can go up to 1 crore INR for both UG and PG programs.
NBFCs: Non-banking financial Companies such as Avanse, Incred, HDFC Credila, and Auxilo also provide student loans without collateral for a bachelor’s degree abroad. Loan amounts vary based on the preferred country of study, ranging from 20 lakhs INR for Germany to 60 lakhs INR for the United States.
Foreign Lenders: Foreign lenders like Leap Finance and Prodigy Finance can cover up to 80% of your total expenses. However, interest rates for foreign lenders tend to be higher due to currency conversion rates.

For students managing expenses abroad, Niyo offers an organic plugin for its Zero Forex cards. These cards are particularly beneficial for students, simplifying daily transactions such as grocery shopping or paying for essentials, thanks to their wide acceptance at various points of sale and ATMs.

For more information on education loans and to experience a hassle-free application process, visit Niyo Education Loan. Here, you can submit your details and receive guidance from a loan counsellor, making the process of applying for loans across multiple banks more streamlined and less time-consuming.

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Moratorium Period and Additional Costs

Understanding the moratorium period and additional costs associated with student loans without collateral, Bachelor’s degree abroad is essential. The moratorium period consists of your course duration plus an additional 6 to 12 months. During this period, some public banks offer the option to skip interest payments on the disbursed amount. However, private lenders and NBFCs may require partial or full interest payments during the moratorium period.

In terms of additional costs, processing fees are charged by lenders for abroad education loans without collateral. Public banks generally do not charge a processing fee, while private banks may charge up to 1% of the loan amount plus GST. NBFCs and foreign lenders have higher processing fees ranging from 1% to 1.5% of the loan amount plus GST.

Loan insurance is another important factor to consider. Private banks and NBFCs often require loan insurance, which can range from 1% to 1.5% of the loan amount for private banks and 2% or above for NBFCs.

It’s crucial to carefully review and negotiate these additional costs to ensure you’re getting the best deal possible.

Applying for Non-Collateral Education Loans

Applying for a non-collateral education loan abroad can be a straightforward process if you follow the necessary steps:

Visit the lender’s website and fill out the request form.
Provide basic details about yourself, including course details and preferred study destination.
Submit the request and expect a callback from a financial officer within 1-2 working days.
Once connected with the financial officer, provide additional information related to your education loan requirement.
The assigned financial officer will guide you through uploading all the relevant documents required by the banks.
After all documents are uploaded, your financial officer will connect you with multiple lenders best suited to your profile and help you secure the best deal possible. Remember to carefully review all terms and conditions before signing any agreements or accepting a loan offer.