Get Education Loan without Collateral: List of Banks 2025

Raghuvamshi Kanukruthi
Updated On:
Mar 7, 2025

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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

  1. The terms of getting a no collateral education loan
  2. Documents & Eligibility required to get an education loan without collateral
  3. 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-

Bank Name Loan Amount Without Collateral Interest Rate Processing Fee Repayment Tenure Moratorium Period
State Bank of India (SBI) Up to ₹7.5 lakh 10.65% - 11.50% Nil (up to ₹20 lakh) Up to 15 years Course duration + 12 months
HDFC Bank Up to ₹7.5 lakh Starting from 9.50% Up to 1% for loans above ₹7.5 lakh Up to 15 years Course duration + 12 months
ICICI Bank Up to ₹20 lakh (UG), up to ₹40 lakh (PG) 10.25% onwards Up to 2% of the loan amount plus GST Up to 12 years + 6 months grace period Course duration + 6 months
IDBI Bank Up to ₹4 lakh 8.55% - 11.15% Nil for studies in India; 1% for studies abroad (Max: ₹5,000) Up to 15 years Course duration + 6 months
Bank of India Up to ₹7.5 lakh 11.05% - 11.85% No processing fee for studies in India Up to 15 years Course duration + 12 months
Punjab & Sind Bank Up to ₹4 lakh Not specified Not specified Not specified Not specified
Axis Bank Up to ₹7.5 lakh 13.70% - 15.20% Contact the bank Contact the bank Contact the bank
HSBC Up to ₹5 lakh Not specified Not specified Not specified Not specified

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 - 

  1. KYC documents 
  2. Passport-size photos of both the applicant and co-applicants
  3. A copy of the official offer letter from the Institute/university, detailing the pricing plan
  4. Past six months Bank statements
  5. Mark sheets and passing certificates from school and degree courses
  6. 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

NBFC Maximum Loan Amount Interest Rate Range
Avanse Education Loans Up to ₹60 lakh 12.5% - 13.5% per annum
HDFC Credila Education Loans Up to ₹80 lakh 11.5% - 13.5% per annum
Auxilo Education Loans Up to ₹50 lakh 12.5% - 13.5% per annum
Propelld Up to ₹50 lakh 11% - 14% per annum
InCred Education Loans Up to ₹65 lakh 12.5% - 13.5% per annum

Benefits of NBFCs over banks for collateral free education loan

  1. 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
  2. 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.
  3. 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:

  1. Interest Rates: Compare the interest rates offered by different lenders. Lower interest rates can significantly reduce the overall cost of the loan.
  2. Repayment Tenure: Longer repayment tenures allow borrowers to spread out their repayments over a longer period, making it easier to manage finances.
  3. Additional Charges: Consider additional charges, such as processing fees and prepayment penalties, which can add to the loan's cost.
  4. Flexibility: Check the lender's repayment terms and flexibility. Some lenders may allow a grace period or provide flexible repayment options.
  5. 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

Loan Parameter Details
Max Loan Amount 50 Lacs
Collateral Not Required
Moratorium Available
TAT 10 Times More than Banks
Disbursal Time 7 Days
Approval Rate Higher than Banks
Special USP Marks Based Approval
% Financed 100% of Fees

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.

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FAQs About Education Loan without Collateral

What are education loans without collateral?

An education loan without collateral is a financial aid where students can secure loans for their education without the need to provide any assets as security.

Is there a higher interest rate for loans without collateral?

Yes, lenders often charge higher interest rates for education loans without collateral since they don't have any security to safeguard their interests.

Do non collateral education loans in India require a co-applicant?

Non collateral education loans in India often require a co-applicant or co-signer based on income and CIBIL score criteria.

Are there any restrictions on the courses eligible for education loans without collateral?

Typically, education loans without collateral cover a wide range of courses, including undergraduate, postgraduate, and professional courses. However, specific eligibility criteria may vary by lender.

Do these loans cover all education-related expenses?

Yes, education loans without collateral typically cover tuition fees, living expenses, and other related costs, providing comprehensive financial support for students.

Can I get student or education loan without collateral?

Top Lenders that Provides Education Loan without Collateral

Some prominent lenders include: Public banks like SBI, Bank of Baroda, etc offer applicants a loan of up to 7.5 Lakhs without collateral. Private banks like Axis Bank, ICICI Bank, HDFC, etc offer students a loan amount of up to 40 lakhs without collateral.

Can I get 20 lakhs education loan without collateral?

There is no restriction on maximum amount of loan that can be sanctioned under the education loan scheme. For NRI students Maximum quantum Rs.20 Lakhs& Rs.30 Lakhs for premium institutes.

Do NBFCs provide no collateral education loan?

Absolutely, NBFCs have more flexible rules than banks and provide loans for higher amount without any collateral.

Can I get 7.5 lakhs education loan without collateral?

Most banks including public and private sector require a collateral above the loan amount of 7.5 lakhs. So, you can get an education loan upto 7.5 lakhs without collateral.

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