Which Bank Gives Education Loan Without Collateral For Abroad?
How to Get an Education Loan without a Collateral? – Private banking entities such as Axis and ICICI Banks and Non-banking finance companies, such as InCred Finance, HDFC Credila, Auxilo and Avanse offer education loans without collateral. But their application procedure and approval policy are unclear.
We pre-assess your profile to determine which lender’s product fits you the best and then recommend that product to you. What’s more – GyanDhan Doesn’t Charge Any Processing Fee! Also, if students can afford to keep their assets as collateral, then interest rates for loans availed from public banks through GyanDhan start from 10.5% for boys and 10% for girls.
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Contents
- 1 Which bank is best for education loan abroad?
- 2 Which banks give unsecured education loans?
- 3 Can I get 80 lakhs education loan without collateral?
- 4 Can I get 50 lakhs education loan without collateral?
- 5 How much loan can I get as a student without collateral?
Can I get education loan for abroad studies without collateral?
Application Procedure to Apply for Education Loan without Collateral – Let us now discuss the application process to apply for an education loan for abroad studies without collateral:
Choose an overseas education loan without collateral secrity, which is the most suitable for you Check all information including moratorium period, repayment tenure, education loan for abroad studies by Indian government interest rate, etc Visit the official website for the education loan you’ve chosen Fill in the application form Scan and upload the required documents Wait for the decision
Suggested: When to apply for an education loan? An education loan for abroad studies without collateral can be easy to get hold of provided you fulfil all the requirements and submit all the relevant documents. It also becomes very important for an international student like you, to understand the terms and conditions, pertaining to the abroad study loan without collateral that you choose.
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Which bank is best for education loan abroad?
Documents required to take education loan from SBI –
Proof of Identity Proof of Residence/ Address Valid Passport Academic Records Proof of admission Statement of cost of study Two passport-size photographs
Some other Top Education Loan Providers in India to study abroad are:
ICICI Bank Union Bank of India J & K Bank Bank of Maharashtra Bank of Baroda Central Bank of India Bank of India
Allahabad Bank The Allahabad Bank offers education loans to Indian nationals who secure admission to professional or technical courses in recognized institutions abroad through the entrance test or merit-based selection process after completion of HSC (10 plus 2 or equivalent). The study abroad courses eligible for the Allahabad Bank Education Loan are :
Graduation: For Job oriented professional or technical courses offered by reputed universities Post Graduation: MCA, MBA, MS etc Courses conducted by CIMA London, CPA in USA etc Regular Degree or Diploma courses like Aeronautical, pilot training, shipping etc, the Institute duly recognized by the competent university, State Body, Local Aviation, or Shipping Authority. The quantum of the loan provided is need-based subject to repaying capacity of the parents or students with a ceiling of Rs.20 Lacs.
Axis Bank Axis Bank The features of the Axis Bank Education Loan for Education are:
Education loans up to Rs.75 lacs are provided. No collateral is required for loans up to Rs.40 lakhs for Prime A category (Postgraduate studies) No collateral is required for loans up to Rs.15 lakhs for Prime B category (Undergraduate studies) 65 per cent of the loan amount should be produced as collateral is required for the Non-Prime category.
Axis Bank’s Education Loan aims to provide financial support to deserving students for pursuing higher professional or technical education in India and abroad. The education loan is provided to students who have obtained admission to career-oriented courses e.g.
medicine, engineering, management etc., either at the graduate or post-graduate level. For students aspiring to study abroad, axis bank education loan is an option for funding. Axis bank is one of the few private banks that offer in-house financing to Indian students aspiring to study abroad or in India.
The education from Axis bank will be provided to those students who have obtained admission to career-oriented courses like medicine, engineering, management etc., either at the graduate or post-graduate level. Below is the criteria students need to fulfil to be eligible for Axis bank education loan-
Secured at least 50% marks during Higher Secondary School and Graduation, if applicable Secured admission to a graduate or postgraduate course in India or abroad through an entrance test or merit-based selection process
Punjab National Bank (PNB) The PNB offers the PNB Saraswati scheme for providing education loan to meritorious students to pursue higher professional and technical education in India and abroad. The major aspects of the PNB education loan scheme are:
Courses approved.Quantum of Finance: need based. Graduation: For job oriented professional or technical courses offered by reputed universities. Post graduation: MCA, MBA, MS, etc. Courses conducted by CIMA – London, the CPA in the USA etc. Degree or Diploma courses like Aeronautical, pilot training, shipping etc. provided these are recognized by competent regulatory bodies abroad for the purpose of employment in India or abroad. Repayment period: up to 10 years for loans of Rs.7.50 lacs or below and up to 15 years for loan above Rs.7.50 Lacs The margin of 5% for loan above Rs.4 Lacs
IDBI Bank Expenses Covered under Education Loan by IDBI Bank:
Fee payable to college / school / hostel Examination / Library / Laboratory fee Purchase of books / equipment / instruments / uniforms Caution deposit / building fund / refundable deposit supported by Institution bills / receipts Travel expenses/passage money for studies abroad Purchase of computers – essential for completion of the course Any other expense required to complete the course – like study tours, project work, thesis, etc. Insurance premium for student borrower, if insurance cover sought
IDBI Bank offers education loan to deserving and meritorious students for pursuing higher education in India and abroad. The facility is also being offered to the meritorious students who have secured admission through Management Quota. The quantum of finance is a maximum of Rs.20 lacs for studying abroad.
Cosmos Bank Lakshmi Vilas Bank DCB Bank Abhyudaya Co-Operative Bank Ltd Karur Vysya Bank Vijaya Bank United Bank of India State Bank of Hyderabad Indian Bank Andhra Bank Punjab & Sind Bank Oriental Bank of Commerce Tamilnad Mercantile Bank
HSBC Bank HSBC, in affiliation with Global Student Loan Corporation, offers education loan to students who are seeking to attain a world-class education at a college or university in the USA. HSBC India Student Education Loan Program enables students to borrow funds to cover the cost of education – tuition, fees, room charges, boarding, books, and other education-related expenses.
Some of the special features of the HSBC education loan to study abroad offered are that up to Rs.1 crore is given against residential property and the tenure is up to 15 years. Indian Overseas Bank (IOB) The IOB provides education loans to Indian nationals who have secured admission to professional or technical courses abroad.
The loan is offered only for Graduation and Post Graduation Courses offered by reputed universities. The quantum of loan available is up to Rs.40 lacs for studies abroad. The repayment period is for a maximum period of 5 – 7 years excluding holiday period of six months after getting the job or 12 months after completion of the course, whichever is earlier.
Avanse Financial Services Avanse provides education loans to Indian citizens above 18 years of age for pursuing graduation or post-graduation for job oriented professional or technical courses offered by reputed universities outside India as well as courses and universities approved by Avanse for education financing.
With a minimum amount criterion of Rs.1 lacs, and maximum 40 lakhs. The loan amount is calculated as per need. The repayment period can be 12 month to ten years depending on the loan amount. Syndicate Bank The Syndicate Bank’s comprehensive Education Loan Scheme, SyndVidya, provides need based finance to cover expenses related to education such as fees payable to college, hostel, examination, library, laboratory fees, caution deposit, building fund, or refundable deposit up to 10% of tuition fee, cost of books, equipment, travel expenses for studies abroad etc.
Graduation: for job oriented professional or technical courses offered by reputed universities Post-graduation: MCA, MBA, MS etc. Courses conducted by CIMA-London, CPA in USA etc.
Canara Bank The Canara Bank offers education loans to study abroad for job oriented, technical or professional graduation and post-graduation courses. The quantum of finance is up to Rs.40 lacs and the repayment period is up to 10 or 15 years depending on the loan amount. Also read:
SBI education loan Education loan to study in UK Education loan to study in Ireland
Is non collateral education loan easy to get?
Students must fulfil the below eligibility criteria to avail an education loan without collateral: After all liabilities and expenses, annual income should be above Rs.4 lakh. Co-applicant should have more than 700 CIBIL score.
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Can I get education loan without collateral in USA?
How to get an education loan without security – Though it’s not the norm everywhere, you don’t need security to take an education loan in other countries. In the US, for example, study loans don’t require any form of security. We do the same because we believe in your future.
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Does SBI give non collateral education loan?
SBI Bank Education Loan: An Overview – The State Bank of India is one of the country’s leading nationalized lenders. SBI generally offers upto 7.5 lakhs for SBI education loan without collateral, SBI also grants subsidies on interest rates for female candidates as well as a 0.5% discount on Rinn Raksha Credit Life Insurance policyholders. It offers 6 different types of education loans namely:
- SBI Student loan Scheme- applicable for study in India as well as abroad
- SBI Global Edvantage Scheme- applicable only for abroad studies
- SBI Scholar Loan-applicable for study in top institutes of India like IITs, NITs, IIMs, BITS etc.
- SBI Skill Development Loan- applicable for smaller skill development or vocational courses in India
- SBI Part-time education courses- applicable for Part-time education courses in top 15 institutes in India
- SBI Takeover of education loan- Students who are willing to transfer their education loan to SBI bank
Which banks give unsecured education loans?
Some of the banks to get unsecured loan are: SBI, BOB, Axis, ICICI, Avanse, Incred etc.
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Can I get full loan for studying abroad?
Education Loans for Studying Abroad – FAQs – What is the maximum loan amount you can get for studying abroad? As such, there is no limit set by the banks for offering education loans to students wanting to study abroad. It depends from bank to bank. The majority of the banks offer loans of up to INR 20-30 lakhs.
Also, if the loan amount is more than INR 20 lakhs then the interest rate also increases. For which type of courses, do banks offer education loans for studying abroad? Generally, banks and NBFCs prefer to give loans for undergraduate and postgraduate courses. Also, the majority of banks prefer to give education loans abroad for pursuing job oriented and professional courses.
Which is the best bank to receive an education loan for studying abroad? Popular banks providing education loans to students wanting to study abroad include HDFC, State Bank of India (SBI), Axis Bank, ICICI Bank, Punjab National Bank and the Bank of Baroda to name a few.
Can I get an education loan without any collateral? Students can avail of a loan of up to INR 4 lacs without collateral. For loans, up to INR 7.5 lacs, parents or guardians are made joint borrowers and a third party guarantee is obtained. For a loan exceeding INR 7.5 lacs property or any other asset is required as collateral.
Can I get the total cost of studying abroad as an education loan? Private banks and private lenders like Non-Banking Finance Companies (NBFCs) do cover the full cost of studying abroad. However, public banks may ask the students to cover 10-15% of the cost through self-financing the rest would be taken care of with the education loan.
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Can I get 20 lakhs education loan without collateral from SBI?
Overview : State Bank of India Education Loan Online For overseas education, SBI primarily offers education loan with collateral. Unsecured loans, i.e. loans without collateral are available only for the best of the best colleges, and that too up to ₹ 7.5 lakhs only.
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Does HDFC bank provide education loan without collateral?
No collateral required for an education loan of up to Rs.7.5 lakh.
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Can banks reject education loans?
Education loan rejection due to Poor CIBIL Score: – To those who have applied for any kind of loan previously, CIBIL score may not be an alien subject. The Credit Bureau of India Ltd, or as it famously called CIBIL is the major governing body that examines every loan applicant’s credit score.
- This is done so in order to determine an applicant’s worthiness to receive any particular loan.
- When it comes to education loans, most lenders have very strict policies regarding the CIBIL scores of both, education loan applicants, as well as their co-applicants.
- A CIBIL score lower than 600 is one of the reasons behind an education loan rejection in a majority of the cases.
In order to know whether you qualify for an abroad education loan with your current CIBIL score, get in touch with the financial team of WeMakeScholars at the earliest. Let us move on to understand the next factor which invites an education loan rejection.
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Can I get loan for study in Canada without collateral?
Frequently Asked Questions for Student Loan in Canada – Ques. Can international students apply for student loans in Canada? Ans. Yes. There are various options of funding for international students in Canada, one of them being student loans. Ques. What are the requirements to apply for student loans in Canada? Ans.
To avail of student loans one has to first acquire a letter of acceptance from a Canadian university, and then begin with the application process. Identity proof, age proof and presence of funds in case of secured loans are mandatory requirements to apply for a student loan in Canada. Ques. Is it worth taking a student loan for international students in Canada? Ans.
The biggest difference between a loan and other forms of financial aid like grants and scholarships is that the latter does not need to be paid back, but loans do. This means that borrowing money to pay for your studies places a burden on your shoulders.
This is why a loan should be the last option to fund your education. Ques. Which bank is best for education loans for canada banks without collaterals? Ans. Some non-banking finance companies (NBFC) or Private Banks provide collateral-free or unsecured education loans for Canada. These include Incred, Avanse, Auxilo, ICICI etc.
Ques. What are the student loan repayment terms in Canada? Ans. The student loan repayment terms will depend upon the agreement with the lender. The repayment schedule will be set by the lender before granting your loan.
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Can I get 80 lakhs education loan without collateral?
Education loan: How to get education loan without any collateral Getty Images The bank may ask you to deposit margin money and seek third-party guarantee in some cases. To get a from a, you generally have to pledge such as house property, fixed deposits, shares, bond, etc., to take the loan. This is done so that in case you default on the loan, lenders can recover it by selling the pledged security.
The security pledged against a loan is termed as collateral. However, you can get an without pledging any security. The Credit Guarantee Fund for Education Loans (CGFEL) provides a guarantee for education loan dispersed by banks under the Model Education Loan Scheme of Indian Banks’ Association (IBA).
Under this scheme, you can get a collateral-free loan amount for up to Rs 7.5 lakh without providing any third-party guarantee. There is no margin requirement if you apply for a loan within this limit through a scheduled commercial under the CGFSEL scheme.
It means that the bank can finance up to 100 percent of the loan, if the loan is up to the limit of Rs 7.5 lakh. Under the CGFEL scheme you can get a loan up to Rs 10 lakh for study in India and up to Rs 20 lakh for studying abroad. But, if you take a loan of more than Rs 7.5 lakh, the bank may ask for collateral for the loan amount.
The bank may also ask you to deposit margin money and seek third-party guarantee. Gaurav Aggarwal, Director & Head of Secured Loans, Paisabazaar.com said that normally lenders require third-party guarantee or tangible collateral as security, depending on the loan amount.
He said, “You do not have to provide collateral and present a third-party guarantee for a loan up to Rs 7.5 lakh under the CGFSEL scheme.” Do all banks provide collateral-free education loan benefit? IBA has formulated the ‘Model Education Loan Scheme’ to financially support meritorious students for pursuing higher education in India and abroad.
The guidelines issued by IBA for the CGFSEL educational loan scheme is generally followed by banks. However, the banks may vary in providing loans under the scheme as per their own internal rules. Aggarwal said that some banks do provide collateral-free loan option to students looking to pursue higher education from premier institutes.
However, it’s the bank’s sole discretion to waive off third-party guarantee or tangible collateral security requirement. He further explains, for instance, for loan up to Rs 4 lakh, lenders only require parents/guardians as joint borrower(s). But, lenders can ask for suitable third-party guarantee for loan amount in the range of Rs 4 lakh to Rs 7.5 lakh, besides having parents/guardian as a joint borrower.
However, “You will be required to provide tangible collateral security if the loan amount is more than Rs 7.5 lakh, along with the assignment of future income of the student for payment of instalments,” he added Can you get a collateral-free loan above Rs 7.5 lakh? However, if your education loan requirement is more than Rs 7.5 lakh or even more than Rs 10 lakh, you can reach out to other lenders to get a collateral-free loan.
Adhil Shetty, CEO, BankBazaar.com said, “Non-banking financial companies (NBFCs) and private lenders can provide you collateral-free loans for a higher amount, but these collateral-free loans are sanctioned at a slightly higher as compared to education loan taken with collateral.” Process to apply for an education loan Before applying for a collateral-free education loan, you must know that the student is the main borrower of the education loan and parent, spouse or sibling can be the co-applicant., Banks generally ask for co-applicant details when you apply for a collateral free loan.
Not only this, banks also ask for the income documents such as salary slips or income-tax returns (ITR) of the co-applicant before sanctioning the education loan. As per the Reserve Bank of India (RBI) guidelines, there are no restrictions on the upper age limit, but some banks may have it as per their own internal rules and regulations.
To apply for the loan, you should be an Indian citizen, having secured an admission into a college/university recognised by a competent authority (NAAC/NBA accredited Institutions/programmes or Institutions of National Importance or Central Funded Technical Institutions (CFTIs)) in India or abroad. The lender will ask for the admission letter of the college/university with the fee structure of the course for which you have applied for the education loan.
Apart from this, lenders may also require documents such as Class X, XII and graduation (if applicable) mark sheets. When your loan application is accepted by the lender, then the lender disburses the amount directly to the college as per the given fees structure.
All students taking education loan under the CGFSEL educational loan scheme also get one-year moratorium for repayment after completion of studies. Basically, lenders can give a relaxation of about one-year time to start re-paying the loan after you complete your education.
Shetty said that the tax deduction benefit under Section 80E of Income Tax Act for interest paid on education loans is available only when you have taken the loan from a financial institution operating under the Banking Regulation Act, 1949 or an eligible trust/institution as per the prescribed rule. “So, when applying for a collateral-free loan of more than Rs 7.5 lakh from non-qualified institutions, you may miss out on the tax deduction benefit under Section 80E of the Income Tax Act,” he said.
Generally, repayment period of education loan is 15 years. However, you should try to repay the loan amount at the earliest as tax-saving deduction benefit is available for up to 8 years only.
( Originally published on Sep 18, 2019 ) (Your on estate planning, inheritance, will and more.) Download to get Daily Market Updates & Live Business News. : Education loan: How to get education loan without any collateral
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Can I get 35 lakhs education loan without collateral?
How to get a Student Loan without collateral for loan amounts up to INR 7.5Lakhs? – The Credit Guarantee Fund for Education Loans (CGFEL) Scheme guarantees Education Loans up to INR 7.5Lakhs without collateral. The one-year moratorium period is available for taken under the CGFEL scheme.
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Which private bank is best for education loan?
Top Banks with Interest Rates Offering Indian Students an Education Loan – As per the recent revaluation in interest rates in 2022, the interest rates have risen since 2020 quarter. Check: Indian Banks offering Education Loans for Studying Abroad The following table elaborates a brief estimate upon how much the Indian students would be charged while studying abroad:
| Indian Public / Private Banks | Interest Rates | Minimum Loan Amount | Loan Tenure |
|---|---|---|---|
| Indian Public Banks | |||
| PNB Educational Loan | 8.80% to 9.50% | based on requirement or need based | 15 years |
| SBI Education Loan | 7.95% | varies | 15 + 1 years |
| Axis Bank Education Loan | 13.70% to 15.20% | INR 50,000 | 15 years |
| Bank of Baroda Education Loan | 8.50% to 9.85% | INR 12,50,000 | – |
| Private Banks | |||
| Kotak Mahindra Bank Loan | Upto 16% | INR 7,50,000 | 5-7 years |
| Federal Bank Education Loan | 11.95% | INR 10,00,000 | 15 years |
| HDFC Bank Education Loan | 9.55% to 13.25% | INR 30,00,000 | 15 years |
| Union Bank of India Education Loan | 8.8% to 10.05% | INR 4,00,000 | 15 years |
Note: The interest rates are subject to change as per the regulations of the bank. A lot of banks (both public an private) have the clause for collateral that is, propoerty or other immovable assests to be submitted with the bank against the loan taken till repayment. Also Check:
Indian Banks offering Education Loans for Studying Abroad Top Education Loans Providers in India for Study Abroad How to choose your bank for Education Loan to Study Abroad
Apart from the public and private sector banks, NBFCs (non-banking financial companies) are also active in education loan segment. The average loan amount of the NBFCs is more than what the banks disburse as it is their main source of income generation.90% of the NBFCs education loan portfolio is over INR 10 lakh i.e.
They are preferred for big-ticket loans. While deciding on a student loan, always consider the above-stated facts and then take your decision wisely. Calculate the overall amount you have to return after adding both the principle and the interest then go for the one which is not heavy on your pocket. And in case you need faster and better service then go for the private sector banks.
Note: Always consult an expert before taking the final decision.
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What type of loan has no collateral?
An unsecured loan is a loan that does not require you to put up items you own, such as your car or home, as collateral to qualify for the loan. Approval for an unsecured loan typically requires an evaluation of your creditworthiness, income and ability to pay.
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Does Icici provide non collateral education loan?
The max. education loan amount offered by ICICI Bank is INR 40 Lakhs without collateral and INR 1 Cr.
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Who is eligible for collateral free loan?
Frequently asked questions: Collateral Free Loans – 1. Who is eligible for the collateral-free CGTMSE loans? Micro/ Small Enterprise (manufacturing/ services) as defined under MSMED Act, 2006 and by RBI is eligible for this loan. Retail sector and Education sector are exclusions to this loan.2.
- What is the purpose of this loan? The funds from this loan can be utilized by MSEs for financing Working Capital, Term Finance for Capex, product development, business expansion etc.3.
- What is the maximum loan amount that can be sanctioned under the CGTMSE loan? A maximum of Rs 1 crore will be sanctioned under this scheme.4.
What is the interest charged on these loans? The interest charged is left to the discretion of the bank and charged as per the bank base rate.5. What is the tenure of these loans? The tenure for cash credit is 12 months, while for the Term loan it is a maximum of 5 years.
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Can I get 80 lakhs education loan without collateral?
Education loan: How to get education loan without any collateral Getty Images The bank may ask you to deposit margin money and seek third-party guarantee in some cases. To get a from a, you generally have to pledge such as house property, fixed deposits, shares, bond, etc., to take the loan. This is done so that in case you default on the loan, lenders can recover it by selling the pledged security.
The security pledged against a loan is termed as collateral. However, you can get an without pledging any security. The Credit Guarantee Fund for Education Loans (CGFEL) provides a guarantee for education loan dispersed by banks under the Model Education Loan Scheme of Indian Banks’ Association (IBA).
Under this scheme, you can get a collateral-free loan amount for up to Rs 7.5 lakh without providing any third-party guarantee. There is no margin requirement if you apply for a loan within this limit through a scheduled commercial under the CGFSEL scheme.
It means that the bank can finance up to 100 percent of the loan, if the loan is up to the limit of Rs 7.5 lakh. Under the CGFEL scheme you can get a loan up to Rs 10 lakh for study in India and up to Rs 20 lakh for studying abroad. But, if you take a loan of more than Rs 7.5 lakh, the bank may ask for collateral for the loan amount.
The bank may also ask you to deposit margin money and seek third-party guarantee. Gaurav Aggarwal, Director & Head of Secured Loans, Paisabazaar.com said that normally lenders require third-party guarantee or tangible collateral as security, depending on the loan amount.
He said, “You do not have to provide collateral and present a third-party guarantee for a loan up to Rs 7.5 lakh under the CGFSEL scheme.” Do all banks provide collateral-free education loan benefit? IBA has formulated the ‘Model Education Loan Scheme’ to financially support meritorious students for pursuing higher education in India and abroad.
The guidelines issued by IBA for the CGFSEL educational loan scheme is generally followed by banks. However, the banks may vary in providing loans under the scheme as per their own internal rules. Aggarwal said that some banks do provide collateral-free loan option to students looking to pursue higher education from premier institutes.
- However, it’s the bank’s sole discretion to waive off third-party guarantee or tangible collateral security requirement.
- He further explains, for instance, for loan up to Rs 4 lakh, lenders only require parents/guardians as joint borrower(s).
- But, lenders can ask for suitable third-party guarantee for loan amount in the range of Rs 4 lakh to Rs 7.5 lakh, besides having parents/guardian as a joint borrower.
However, “You will be required to provide tangible collateral security if the loan amount is more than Rs 7.5 lakh, along with the assignment of future income of the student for payment of instalments,” he added Can you get a collateral-free loan above Rs 7.5 lakh? However, if your education loan requirement is more than Rs 7.5 lakh or even more than Rs 10 lakh, you can reach out to other lenders to get a collateral-free loan.
Adhil Shetty, CEO, BankBazaar.com said, “Non-banking financial companies (NBFCs) and private lenders can provide you collateral-free loans for a higher amount, but these collateral-free loans are sanctioned at a slightly higher as compared to education loan taken with collateral.” Process to apply for an education loan Before applying for a collateral-free education loan, you must know that the student is the main borrower of the education loan and parent, spouse or sibling can be the co-applicant., Banks generally ask for co-applicant details when you apply for a collateral free loan.
Not only this, banks also ask for the income documents such as salary slips or income-tax returns (ITR) of the co-applicant before sanctioning the education loan. As per the Reserve Bank of India (RBI) guidelines, there are no restrictions on the upper age limit, but some banks may have it as per their own internal rules and regulations.
To apply for the loan, you should be an Indian citizen, having secured an admission into a college/university recognised by a competent authority (NAAC/NBA accredited Institutions/programmes or Institutions of National Importance or Central Funded Technical Institutions (CFTIs)) in India or abroad. The lender will ask for the admission letter of the college/university with the fee structure of the course for which you have applied for the education loan.
Apart from this, lenders may also require documents such as Class X, XII and graduation (if applicable) mark sheets. When your loan application is accepted by the lender, then the lender disburses the amount directly to the college as per the given fees structure.
All students taking education loan under the CGFSEL educational loan scheme also get one-year moratorium for repayment after completion of studies. Basically, lenders can give a relaxation of about one-year time to start re-paying the loan after you complete your education.
Shetty said that the tax deduction benefit under Section 80E of Income Tax Act for interest paid on education loans is available only when you have taken the loan from a financial institution operating under the Banking Regulation Act, 1949 or an eligible trust/institution as per the prescribed rule. “So, when applying for a collateral-free loan of more than Rs 7.5 lakh from non-qualified institutions, you may miss out on the tax deduction benefit under Section 80E of the Income Tax Act,” he said.
Generally, repayment period of education loan is 15 years. However, you should try to repay the loan amount at the earliest as tax-saving deduction benefit is available for up to 8 years only.
( Originally published on Sep 18, 2019 ) (Your on estate planning, inheritance, will and more.) Download to get Daily Market Updates & Live Business News. : Education loan: How to get education loan without any collateral
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Can I get 50 lakhs education loan without collateral?
FAQs – Q1. Who are the top education loan providers for foreign education? Ans: Axis Bank, Canara Bank, Bank of Baroda, Federal Bank, HDFC Bank, State Bank of India, and Punjab National Bank (PNB) are among the top providers of educational loans if you want to pursue education abroad.
Q2. What are the different types of educational loans financial institutions offer? Ans: Secured education loans and collateral-free education loans (unsecured education loans) are the two types of educational loans offered by financial institutions. Apart from loans, scholarships and educational funding are common ways to get financial support for higher studies.
Q3. On what basis is a student loan without collateral provided? Ans: The lenders assess two major factors for providing an educational loan without collateral, including the potential income of the borrower after completing the education and the creditworthiness of the applicant and co-applicant.
- Q4. Are collateral-free educational loans subject to a processing fee? Ans: Yes, lenders can levy a processing fee for providing an education loan without collateral.
- The processing fees vary from one lender to another.
- The processing fee is completely up to the discretion of the lender.
- The necessary documents and the fee statement are the mandatory requirements to procure this form of a loan.
Q5. Do educational loans with no collateral have high-interest rates? Ans: Yes, the interest rates for an educational loan without collateral have higher interest rates as compared to secured loans. The risk factor involved is the major reason for a higher rate of interest.
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How much loan can I get as a student without collateral?
Looking for an education loan without collateral? Here’s how to avail one An education loan is the easiest way to fund your higher studies. With several sources to get an education loan, it is equally difficult to choose one that will cover the cost without the need for collateral, since several borrowers do not own collateral or it is not eligible as per the lender’s criteria.
In such a case, students can opt for an education loan without collateral from Indian lenders. Here are some of the frequently asked questions answered for students hoping to get an education loan without collateral How to get an education loan up to Rs 7.5 lakh without collateral? The Government of India launched a Credit Guarantee Fund Scheme for Education Loans (CGFSEL) to help students get an education loan of up to Rs 7.5 lakh without any collateral and third-party guarantee.
The credit risk guarantee fund scheme provides a guarantee on education loans given by banks under the Model Education Loan Scheme of the Indian Banks’ Association. Read | Students can apply for the loan under this scheme if they belong to the Economically Weaker Section (EWS) category, and the family income is less than Rs 4.5 lakh.
- Students are eligible under this scheme even if the loan amount they require is more than the amount stipulated in the same.
- Features of this scheme that students should be aware of: 1.
- Eligible students get a subsidy on the loan amount of up to Rs 7.5 lakh.2.
- The subsidy is valid during the course period and the moratorium period only.3.
Students can avail of this subsidy only once in their lifetime.4. Aspirants have to submit income proof.5. The lending institution can charge a maximum interest of 2 per cent per annum above the base rate on loans under this scheme. How to get an education loan of more than Rs 7.5 lakh? There are several lenders in the market that provide education loans without collateral to study in India and abroad.
Public banks offer loans without collateral only up to Rs 7.5 lakh. However, private banks and Non-Banking Finance Companies (NBFCs) have numerous without-collateral loan products that cover the cost of education up to Rs 75 lakh. Also read | Some salient features of loans without collateral: 1. The loans without collateral cover a wide range of courses, colleges, and countries as opposed to loans with collateral.2.
The interest rate starts from 10.5 per cent, and can go up to 14 per cent.3. Any student without collateral to pledge can apply for an education loan as long as they can arrange for a co-applicant to co-sign the loan.4. Almost all loans without collateral come without a holiday period.
The interest charged during the study period has to be paid by the co-applicant fully or partially depending on terms and conditions. To be eligible for a loan without collateral, students should – — Arrange a co-applicant with sufficient income to take on the liability of paying the interest/partial interest amount during the study period.
— Have a good academic record and should be attending a university on the lender’s list of pre-approved universities. These universities are shortlisted by the lender, based on the employment opportunities after graduation. Also read | Apart from this, the co-applicant needs to submit income proof, such as the ITR of the last two years, bank statements, and salary slips.
If the co-applicant is self-employed, they will have to submit further business documents, such as the P/L statements and GST registration. The process to apply for a loan without collateral is to approach a lender after performing due diligence about the lender and the loan product. Fill in the application form and submit the required documents.
Since these loans do not come with the requirement of collateral, the document list is short and so is the processing time. Finding the right loan product confuses students as the market is flooded with lenders promising to offer the best ‘without-collateral’ loan product in the market.
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Can I get 4 lakhs education loan without collateral?
Basic Criteria for Educational Loan One of the most vital questions that you may wonder about is the amount of the educational loan. In general, you can get up to 4 lakhs of educational loan for higher studies without any collateral. Under education loan scheme, you can get a maximum of 15 lakhs for studies in India and more 25 lakhs for abroad studies.
When you take education loan up to 4 lakhs, only the student and the parent have to sign the document and no collateral are necessary. However, if your loan amount is between 4 lakhs and 7.5 lakhs, you will have to provide third party guarantee to the bank. If the loan is above 7.5 lakhs, you will have to furnish the bank with collateral documents.
These are documents of any securities like NSC which the bank can sell to recover the amount if you fail to pay. How to apply for an educational loan for higher studies? In order to apply for an educational loan, you will have to prepare a number of documents beforehand.
- The process goes as follows: Once you have determined to study at an institution and completed the process of admission, then you will have to concentrate on taking out an educational loan.
- Here are the documents which you should keep ready: You will have to provide a proof of admission to the selected recognized institution.
Proof of your consistently high academic performance along with the last mark sheet will need to be produced. The cut-off marks generally differ from general students to reserved students. You need to produce a schedule of fees. Depending on the amount that you are applying for, you will need to produce income statement, statement of assets and liabilities etc.
If you are going to study abroad, you need to produce your passport with a valid visa also. Your education loan will cover a number of things in addition to your tuition fees. These include hostel fees, exam fees, library fees, purchasing books, travel and other expenses for educational projects. After all the documents have been submitted and verified, you will have to appear for an interview.
It is best to know as much as possible about the course and the institutions that you have chosen. It takes around 15 days for an educational loan to be sanctioned. Once it has been sanctioned, you will get a promissory note which you will have to sign.
- In most cases, banks pay the institution directly and or to you.
- You should check the repayment clause.
- In most cases, repayment starts six months after the end of the course or as soon as you get a job – whichever comes earlier.
- Interest rates on educational loans depend on a number of factors.
- In general, they vary between 10% and 15% rates of interest.
You can claim tax deduction on the interest of the education loan. However, no deduction can be claimed on the principal. : Basic Criteria for Educational Loan
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