Education Loan Without Collateral for Students
Higher education aka college education comes with a higher fees. While education loans can be a life saver here, many a times they require a collateral or security. Many students might face a challenge in providing collateral due to lack having any valuable property or assets to pledge. But don't worry, you can still get a no collateral education loan, but how????
In this blog, we read
- The terms of getting a no collateral education loan
- Documents & Eligibility required to get an education loan without collateral
- Compare list of banks who provide no collateral education loans
What is a Collateral (or Secured) Education Loan?
There are two main types of education loans: secured and unsecured. A secured loan, also known as a collateral loan, involves providing collateral, which could be a valuable asset or property, to the lender. This collateral acts as security in case the borrower is unable to repay the loan, thereby protecting the lender's interests.
What is a Non Collateral (or Unsecured) Education Loan?
In education loan without collateral, you get your loan amount without any collateral or security pledged. Any security or asset like home, land, or property doesn't need to pledged to given a security deposit to the lender.
Compare List of Banks Offering Education Loans without Collateral in India
Here are some of the top banks where you can get an education loan without collateral-
How much education loan can I get without collateral
- In public banks for any institution, education loan below 7.5 lakhs, you don't need any collateral
- In public banks for premier institutions (Like IITs, IIMs etc.), you can get loan up to 40 lacs without any collateral
- Based on your profile, you can get a maximum of 1.25 Crores of education loan without any collateral
Wondering how much education loan you can secure without collateral? Check out this Calculator
Benefits of Education Loan without Collateral
The major benefits of an education loan without collateral are:
1. No Collateral Required
As the name suggests, education loans without collateral do not require the borrowers to pledge any assets as a financial security towards the loan.
2. High Loan Amounts
In collateral loans, high loan amount would require you to put high value assets as pledged security. No collateral education loans provide you access to higher amount of education loan. Hence, no collateral education loan can cover your additional expenses like travel, laptop etc.
3. Loan Availability Before Admission
Certain lenders offer loans even before a student secures admission, ensuring financial security early in the process.
4. 100% Financing for Higher Education
In many cases, the loan covers the full cost of education, eliminating the need for additional funding sources
You can get get an education loan without collateral - Apply here
Eligibility Criteria for Education Loan Without Collateral
How would ensure or know that you're eligible for an education loan without collateral? Check the below points and know!
1. Academic Background
Lenders often consider the applicant's academic performance, such as their grades and previous educational qualifications, to assess their commitment to studies and potential for success. Generally, government-run banks give preference to students who have scored more than 60% marks.
2. Course and Institution
The choice of course and institution also plays a crucial role in the loan approval process. Lenders prefer courses and institutions that have good reputation and offer promising career prospects.
3. Future Earning Potential
Lenders evaluate the borrower's future earning potential based on their chosen field of study and the country they are going to. Courses that lead to high-paying careers are more likely to be approved for a non-collateral education loan.
4. Creditworthiness
While collateral is not required, lenders still evaluate the borrower's creditworthiness which includes factors such as the borrower's credit score, employment history, and income stability.
Apply & Check if you're eligible for No Collateral Education Loan
Documents Required for Education Loan without Collateral
When applying for a non collateral education loan, these are the documents required in order of importance -
- KYC documents
- Passport-size photos of both the applicant and co-applicants
- A copy of the official offer letter from the Institute/university, detailing the pricing plan
- Past six months Bank statements
- Mark sheets and passing certificates from school and degree courses
- Income Proof of the guarantor or co-applicant (salary slips/Form 16).
NBFC Education Loan Without Collateral
Non-Banking Financial Companies (NBFCs) in India offer education loans without requiring collateral, making higher education more accessible to students who may not have assets to pledge.
Top NBFCs Offering Education Loans Without Collateral
Benefits of NBFCs over banks for collateral free education loan
- Higher Loan Amounts: NBFCs offer high loan limits as much as up to 50 lacs without a collateral, while in banks, it's mostly 7.5 lakhs
- Flexible Repayment Terms: NBFCs provide student-friendly repayment options, including longer tenures and moratorium periods, allowing students to repay the loan at their own pace.
- Hassle Free Loan Processes: NBFC are usually much more efficient in their loan processes. For example, Propelld provides an education loan 10X faster than banks. They require minimum documentation, have 100% online processes and much flexible terms.
How to Choose the Right Non-Collateral Education Loan
Consider these factors while applying for a non-collateral education loan:
- Interest Rates: Compare the interest rates offered by different lenders. Lower interest rates can significantly reduce the overall cost of the loan.
- Repayment Tenure: Longer repayment tenures allow borrowers to spread out their repayments over a longer period, making it easier to manage finances.
- Additional Charges: Consider additional charges, such as processing fees and prepayment penalties, which can add to the loan's cost.
- Flexibility: Check the lender's repayment terms and flexibility. Some lenders may allow a grace period or provide flexible repayment options.
- Reputation of the Lender: A reputable lender with a good track record is more likely to provide excellent customer service and a hassle-free loan experience.
Do you know you can also insure your education loan?
Tips for Getting Approved for an Education Loan Without Collateral
Getting approval for a student loan without collateral requires careful preparation and planning. Here are some tips to increase the chances of loan approval-
Start Early and Explore all Options
To increase your chances of securing a good education loan, it's essential to meet the eligibility criteria set by each lender. Start early by identifying the factors and researching reputable loan providers.
Maintain a Good Academic Record
Lenders often consider the academic performance of borrowers as an indicator of their commitment to studies. Maintaining a good academic record can positively impact the chances of an education loan application.
Strong Credit History
Even though non-collateral loans do not require collateral, having a strong credit history can improve the chances of loan approval. Maintaining a habit of paying the bills and credit card dues on time can build a positive credit record.
Choose a Marketable Course
Opt for a course that has good career prospects and higher chances of employment. Lenders are more likely to approve loans for courses that lead to well-paying jobs.
Education Loan Without Collateral at Propelld
Propelld is an RBI registered NBFC that provides, hassle free education loans without any non collateral or co-applicant.
Here are the major benefits of Propelld education loan:
Benefits of Propelld Education Loan
Pro-Tip: If you can't get education loan without co-applicant when you loan amount is more than 7.5 lacs, consider taking a loan amount a little lesser than that.
Are you parent of a JEE/NEET aspirant?
.png)
.svg)
