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How to Get an Education Loan Without Collateral? Exclusive Guide

This blog covers all the information about the education loan without collateral for students planning to study abroad. To find out the process, eligibility criteria, documents and more, read the blog.

Are you dropping out to pursue your dream of studying abroad due to higher expenses? You do not have collateral to pledge to apply for the loan? If yes, then you must read this blog till the end. Here, you will find a way to remove the financial hurdle. This is possible by taking an education loan without collateral. Yes, you read it right. This is something that makes you achieve your dream of studying overseas. So, read the blog to explore everything about the loan.

What Is an Education Loan for Abroad Studies Without Collateral?

An educational loan without collateral allows aspirants to study abroad and enroll in a degree without worrying about a budget. In other words, it is a financial product designed to support students pursuing higher education abroad without requiring them to provide tangible assets (collateral) as security. Thus, these loans are tailored to ease the financial burden on students and their families by providing access to funds for tuition fees, living expenses, travel, and other educational costs. # Collateral is the guarantee in the form of assets or tangible items that you pledge to the lender against the loan you are receiving. However, non-collateral education loan is only a particular type of loan that students receive. However there are other types of loans that we will be discussing in the upcoming section of the blog.

What Are the Types of Education Loans and Their Differences?

There are two types of education loans to study abroad for Indian students. These are:

  1. Collateral education loan
  2. Non-collateral education loan

Collateral Education Loan

A collateral education loan needs students to pledge some assets to the lender. This is to ensure the security of the loan amount. These include house, gold, property, land or fixed deposit. 

Non-Collateral Education Loan

As the name suggests, in this type of education loan, the depositor is not required to pledge any security. Thus, to get such a loan, you only need to complete the documentation process and meet the eligibility requirements.

Points of Differentiation Collateral Education Loan
(Secured Loan)
Non-Collateral Education Loan
(Unsecured Loan)
Limit for Loan Higher Lower
Need of Collateral Required Not-required
Interest Rate Lower Higher
Eligibility Criteria 18 years or older between 20-65 years
Processing Time 30-45 days 10-15 days
Repayment Period 1 year of job 6 months after job
Moratorium Period Total duration of the course+ six months  Total duration of the course: six months or one year

These are the different types of education loans for students considering studying abroad. Moreover, this section has listed some pointers of differentiation between them for better understanding. Moving ahead, it is time to explore the criteria for the education loan without collateral to evaluate your eligibility for the same.

Who Can Apply for an Education Loan Without Collateral? Eligibility 

Although the eligibility criteria for Non-Collateral Educational Loans may vary between different banks, but certain common factors include:

Know the eligibility criteria with for taking an education loan without collateral.

Age: Several banks have an age limit for the applicants. This often falls between 18 to 35 years.

  • Co-applicant: Usually, a parent or guardian is a co-applicant. They must be someone with a stable source of income to act as a guarantor for the loan.
  • Loan Amount: The loan amount requested by the applicant should be reasonable and within the Bank's specified limits.
  • Course Selection: The program to study and the institution's reputation influence loan approval in many ways.
  • Academic Background: Applicants should have secured admission to a recognised university overseas for a specific course.
  • Academic Performance: Good academic records can enhance your chances of loan approval without much ado.

 These are some of the general criteria on which the eligibility of the applicant depends to get an education loan without collateral. Moreover, there are certain documents needed to submit for a loan. Thus, the following section will list them down for you.


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What Are the Documents Required for Education Loan Without Collateral?

The documents required to seek an education loan can vary slightly from one Bank or financial institution to another. However, the following is a general list of documents that are commonly requested when applying for an overseas education loan without collateral security. 

Documents Required from the Applicant:

  • A valid Passport 
  • Proof of admission 
  • Loan application form
  • Statement of expenses
  • Passport-size photographs 
  • Loan account statement of one year, if any
  • Identity proof (PAN Card, Passport, Voter ID card)
  • Address proof - a copy of the bill (electricity, telephone or water) 
  • Past academic record (10th, 12th, undergraduate mark sheet, test scores of entrance tests like GRE, TOEFL, IELTS)

Documents Required from Co-Applicant

  • Identity proof 
  • Address proof 
  • Income proof

 Self-Employed Co-Applicant

  • TDS Certificate 
  • Last 2 years IT returns 
  • Business address proof 
  • Certificate of qualification
  • Bank account statement for the last six months 

 Salaried Co-Applicant

  • Salary slips for the last 3 months
  • Bank account statement for the last 6 months.
  • Copy of Form 16 for the last 2 years or copy of IT Returns

 These are the different document requirements that aspirants need to fulfil while applying for an education loan without collateral to manage their finances while studying overseas. Now, you know the eligibility criteria along with the document needed. Thus, it is time to perceive the process to apply for the same.

How to Apply for an Education Loan Without Collateral?

Know the eligibility criteria with for taking an education loan without collateral.

The process of acquiring an education loan without collateral is quite straightforward. But you need to know the right approach to ensure you do not waste time. Thus, this section will help you know how to get an education loan for studies abroad without collateral.

  • Research: Begin by researching different banks and their loan offerings, comparing interest rates, repayment terms, and other conditions.
  • Eligibility Check: Review the eligibility criteria of the chosen institute's loan scheme to ensure you meet all the requirements.
  • Documentation: Gather the essential papers, including admission letters, academic records, income proof of the co-applicant, etc.
  • Loan Application: Submit the completed application form along with the required documents to the institute.
  • Loan Approval: The institute will assess your application and, if approved, provide a loan offer outlining the terms and conditions.
  • Acceptance: Carefully review the loan offer, ensuring you understand the interest rate, repayment schedule, and other associated things.
  • Disbursement: Upon acceptance, the institute will disburse the loan amount directly to the institution or as required.

To know the process in detail, read: Ultimate Guide to Know “How to Get an Education Loan"?

These are the few steps you need to consider while applying for an education loan without collateral to ensure you get the loan. Besides this, if you are thinking about which banks give loans to Indian students to complete their studies overseas, then the following section will provide you with an answer.

Which Bank Gives Education Loan Without Collateral for Abroad in India?

Several Indian banks recognise the importance of supporting students' aspirations to study abroad. Thus, there are three different categories of lenders that offer unsecured education loans: public banks, private banks and private lenders. However, it is suggested by the experts in the field that one should take a loan from the governmental institutes as they are able to provide good interest rates compared to others. 

  1. Public Banks: SBI, PNB, BOB, Canara, Union, BOI and more. 
  2. Private Banks: Axis, ICICI, HDFC, IDBI, Kotak Mahindra etc.
  3. Private Lenders: InCred and Auxilo

Explore Public sector banks providing education loan without collateral with

So, let's explore the suggested one, that is, public banks, in detail:

State Bank of India

It is an Indian multinational public sector bank providing loans with a customer-centric approach. This means the organisation has the approach designed by keeping its clients in mind. It has gained the title of the world's 43rd-largest Bank. Moreover, it is India's only Bank to be listed among the 500 on the Fortune Global list.

Features Description
Headquarters Mumbai, Maharashtra
Interest Rate 8.15% - 11.15%
Maximum Tenure 15 years

Union Bank of India

It is another public sector bank also recognised as UBI that started its processes on 1st April 2020. It is one of the largest banks owned by the government, along with the largest branch network. Moreover, the Government of India holds 74.76% of the Bank's total paid-up capital.

Features Description
Headquarters Mumbai, Maharashtra
Interest Rate 8.15% - 12.55%
Maximum Tenure 15 years

Bank of Baroda

It is another leading public sector bank in India with a strong domestic presence. In addition, it is India's second-largest Bank after SBI. It has a wide network with over 9,000 branches and 13,000 ATMs across the country.

Features Description
Headquarters Alkapuri, Vadodara
Interest Rate 8.15% -12.50%
Maximum Tenure 15 years

Canara Bank

It is another customer-centric bank founded in 1906 and is among the oldest banks in India. Moreover, it was founded with the principle of inculcating the habit of saving among the citizens of India. 

Features Description
Headquarters Bengaluru
Interest Rate 8.60%-11.35%
Maximum Tenure 15 years

Punjab National Bank

It is India's first Swadeshi bank and was founded in 1894. Besides this, it has spread its wings as per business and network over the years. The spirit behind its establishment was nationalism.

Features Description
Headquarters Bengaluru
Interest Rate 4.00% - 11.25%
Maximum Tenure 15 years

Moving ahead to explore the private banks in detail:

Axis Bank

It is on the third in the list of largest banks that offers comprehensive financial services to all the customers. These include large and mid-corporate, Micro, Small and Medium Enterprises (MSME) and all other retail businesses. 


It is another private limited multinational bank that serves, all the corporate and retail customers in numerous fields. This is done through a variety of channels, such as delivery and specialised subsidiaries. 


The Housing Development Finance Corporation Limited is one of the largest banks in terms of assets and sixth in terms of capitalisation. Moreover, it is one of the first financial institutions in India to receive “in principle” approval from the RBI to set up a bank in the private sector.


The Life Insurance Corporation is the parent company of IDBI Bank, and it has been offering its services since 1964. Initially, it was the Industrial Development Bank of India. But later, it was merged with IDBI and became known as a public sector bank. 

Kotak Mahindra Bank

It is a flagship company of the Kotak Group and is amongst the fastest-growing banks in India. The services of the bank include transition banking, managing IPOs, providing working capital loans operating lending vehicles and more.

Move ahead to learn more about the private lenders in detail:


It is a new-age financial services platform that holds data science and technology to make money lending a quicker service. Through this, it has simplified the process of lending to the customers. 


It is a non-banking finance that is registered with the Reserve Bank of India. It provides credit facilities through a digital lending platform.

These are the public sector banks, private sector banks and the private lenders that provide education loans without collateral to study abroad aspirants. Moving ahead to resolve another major query of aspirants, which is getting loans without co-applicants and collateral. 

Can I Get Education Loan Without Collateral and Co-Applicant?

An education loan without collateral and co-applicant is a special type of loan that is possible but might have certain things to consider. However, you can get a loan without a financial co-applicant, but you need a primary co-applicant for the same. Confused? Let's look at it in brief:

1. Primary Co-Applicant:

A person who takes a loan with you and is responsible for repaying it within the due time is a co-applicant, co-borrower, or co-signer. They may be anyone, parents, guardian, or family member.

2. Financial Co-Applicant:

A financial co-applicant and a primary co-applicant can be the same person, which depends on the type of loan. He is a the who accepts to share the equated monthly     instalment and other responsibilities. Besides this, you might have to add someone as a financial co-applicant as per the requirements of your loan. 

So, yes, you can take an education loan without collateral, but only without a financial co-applicant. Thus, after going through the blog, you have an idea that applying for an education loan without collateral is a completely possible and easy task. To get this loan, the applicant just needs to fulfil all the essential eligibility criteria and submit the necessary documentation. So, reading the blog must have equipped you with every detail you should know before applying for a loan. However, if you are still baffled, stop, as is your gateway to success. Here, you will meet the experts in the field who will assist you with the insights to achieve your dream of studying abroad, which might not be possible due to the higher expenses. So, hire an expert to sort out the confusion of loans and have a brighter future ahead.


How Much Education Loan Amount Can I Get Without Collateral?

The amount of education loan without collateral depends upon the type of bank you are taking it from. So, public banks such as SBI, Bank of Baroda, etc., offer loans of up to 7.5 lakhs. On the other hand, Private banks like Axis Bank, ICICI Bank, HDFC, etc, offer up to 40 lakhs. 

Are the Interest Rates Higher for Education Loans Without Collateral?

Yes, the interest rates for education loans without collateral are higher as compared to those with collateral. This is so because the lender does not have any security in return for the loan, so they have the higher rates. 

What Are the Benefits of Education Loan Without Collateral?

There are various perks of availing of an education loan without collateral; some of these are:

  • Get up to Rs. 40 lakh 
  • Availed of loan before admission
  • Avail top-up loans
  • Flexible repayment option
  • Quick process
  • No EMIs in moratorium period

Why Education Loan Without Collateral Get Rejected?

Your education loan without collateral can get rejected for several reasons:

  • Fake or No Documents
  • Multiple Loan Inquiries
  • Low Repaying Capacity
  • Academic Performance

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View all comments
Inaya Chaudhary

Can I get another educational loan for studying abroad while I have an existing loan?

Yash Bhattacharya

Is it possible to get an educational loan to study abroad if I have a personal loan?


To fill the gap, we can assist in navigating your options for student loans and looking into grants and scholarships. Let us all finance your study abroad experience!

Rishi Gupta

Can I get half of an education loan for studying abroad?