Get Education Loan without Collateral

Highest Collateral-Free Limits

Key Highlights:

• ✓ Undergraduate: Up to ₹20 lakhs without collateral
• ✓ Postgraduate: Up to ₹40 lakhs without security
• ✓ Competitive rates starting from 10.25%
• ✓ Processing Fee: Up to 2% + GST
• ✓ Repayment: 12 years + 6 months grace
• ✓ Moratorium: Course duration + 6 months

Best For: Students pursuing postgraduate programs requiring substantial funding.

Most Competitive Interest Rates

Key Highlights:

• ✓ Loan Amount: Up to ₹7.5 lakhs
• ✓ Lowest starting rate at 9.50%
• ✓ Standard ₹7.5L limit without collateral
• ✓ Flexible repayment up to 15 years
• ✓ Processing Fee: Up to 1% (above ₹7.5L)
• ✓ Moratorium: Course duration + 12 months

Best For: Cost-conscious students seeking lowest interest rates.

Zero Processing Fees

Key Highlights:

• ✓ Loan Amount: Up to ₹7.5 lakhs
• ✓ Interest Rate: 10.65% - 11.50%
• ✓ Processing Fee: Completely waived (up to ₹20L)
• ✓ Longest repayment tenure up to 15 years
• ✓ Extended moratorium of course + 12 months

Best For: Students wanting to avoid upfront processing costs.

Most Affordable Rates

Key Highlights:

• ✓ Loan Amount: Up to ₹4 lakhs
• ✓ Lowest interest rates starting 8.55%
• ✓ Processing Fee: Nil (India), 1% abroad (Max ₹5K)
• ✓ Repayment: Up to 15 years
• ✓ Moratorium: Course duration + 6 months

Best For: Students with moderate funding needs seeking lowest rates.

• Bank of India: Amount: Up to ₹7.5 lakhs | Rate: 11.05% - 11.85% | Fee: Free for India studies
• Axis Bank: Amount: Up to ₹7.5 lakhs | Rate: 13.70% - 15.20% | Details: Contact bank for specifics
• HSBC Bank: Amount: Up to ₹5 lakhs | Details: Contact bank for current rates and terms
• Punjab & Sind Bank: Amount: Up to ₹4 lakhs | Details: Contact branch for latest terms

NBFCs offer substantial funding, usually without any collateral requirement compared to banks that typically limit unsecured education loans to ₹7.5 lakh. This dramatic difference makes NBFCs the preferred choice for students pursuing expensive courses or international education.

NBFCs understand student financial constraints and offer:

• Extended moratorium periods during course duration plus 6-12 months
• Longer repayment tenures up to 15-20 years
• EMI holiday options during initial employment phase
• Graduated repayment plans that increase with career growth

Modern NBFCs have revolutionized education loan processing:

• 10X faster approval compared to traditional banks (as demonstrated by Propelld)
• 100% online application and documentation
• Minimal paperwork requirements
• AI-powered credit assessment based on academic performance and career prospects
• Quick disbursal often within 7-15 days

Unlike banks that treat education loans as one of many products, NBFCs like Auxilo and Avanse specialize exclusively in education financing, offering:

• Better understanding of course-specific requirements
• Partnerships with educational institutions
• Tailored loan products for different study destinations
• Expert counseling throughout the loan journey

Banks generally disburse directly to the university in tranches; NBFCs sometimes allow part disbursement to students for living expenses, travel, or laptops.

No, but many lenders recommend it. SBI offers 0.5% rate concession with Rinn Raksha, NBFCs sometimes bundle insurance.

Usually, Banks allow a repayment period of 10–15 years with fixed EMIs. However, NBFCs allow it upto 20 years, flexible EMIs, moratorium, payment holiday etc.

As the name suggests, education loans without collateral do not require the borrowers to pledge any assets as a financial security towards the loan.

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.

Certain lenders offer loans even before a student secures admission, ensuring financial security early in the process.

In many cases, the loan covers the full cost of education, eliminating the need for additional funding sources. Many students opt for collateral-free loans due to the flexibility they offer and the fact that eligibility is often based on academic merit rather than traditional assets or co-applicants.

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.

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.

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.

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.

Even a 0.5% difference can save you thousands over the repayment period. Always compare public banks, private lenders, and NBFCs before deciding.

Longer repayment periods (up to 15 years with some lenders) mean smaller EMIs, but higher overall interest. Shorter tenures reduce interest outgo but increase EMI burden.

Factor in processing fees, prepayment charges, and late payment penalties. Some lenders offer zero prepayment penalty.

Choose lenders that offer moratorium periods (course duration + 6–12 months) and flexible repayment plans. This eases the pressure while you settle into your career.

Almost all banks require a co-applicant; NBFCs may be more flexible. Some NBFCs like Propelld are quite flexible and accept relatives also as co applicant.

Do check the prepayment penalty terms. For example:

• SBI: No foreclosure penalty.
• HDFC/ICICI: Usually 0–2% prepayment charge.
• Most NBFCs: No penalty.

Go with banks or NBFCs that have transparent policies, faster processing, and strong customer support. Reading reviews or real student experiences (on platforms like Quora or Reddit) can help.

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.

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.

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.

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.