An education loan without collateral, also known as an unsecured education loan, is a type of financial assistance provided by banks and financial institutions to help students and their families cover the expenses associated with education. Unlike traditional loans, a non-collateral education loan does not require the borrower to provide any collateral or security against the loan amount.
Key Features of Education Loan without Collateral
The significant features and benefits offered by education loans without collateral are mentioned below:
- No Collateral Required: The absence of collateral eliminates the need for borrowers to pledge assets such as property, jewellery, or fixed deposits as security for the loan.
- Accessible to a Wide Range of Applicants: These loans are available to domestic and international students, enabling individuals from various socio-economic backgrounds to access quality education.
- Flexible Loan Amounts: Depending on the lender, the loan amount may cover a substantial portion or the entire cost of tuition fees, accommodation, books, equipment, and other related expenses.
- Competitive Interest Rates: Although interest rates for unsecured loans may be slightly higher than secured loans, on-collateral education loans often have competitive rates.
- Flexible Repayment Terms: Repayment terms and conditions for these loans are generally student-friendly. It offers moratorium periods where borrowers do not need to repay loans until the course's completion or for a specified period after obtaining employment.
Documents Required for Education Loan without Collateral
To apply for a non-collateral education loan, one must submit the required documents that are listed below:
- KYC documentation.
- Two passport-size photos of the applicant and co-applicants.
- Copy of the Institute/university's offer letter, including the pricing plan.
- Bank statement for the previous six months.
- Guarantor Form - Optional.
- Mark sheets / passing certificates for S.S.C., H.S.C., Degree courses, admission exams such as IETLS, TOEFL, and so on.
- Proof of income for the guarantor or co-applicant/borrower (pay stubs/Form 16).
List of Banks Offering No Collateral Education Loans
Given below are the different banks that offers educational loans without any collateral for foreign education:
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Bank Name
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Loan Amount
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HDFC Bank
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Domestic Education - Up to Rs.30 lakh lakhs Foreign Education - Up to Rs.45 lakh.
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State Bank of India (S.B.I.)
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Domestic Education - Up to Rs.15 lakh Foreign Education - Up to Rs.1.5 crore.
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IDBI Bank
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Domestic Education - Up to Rs.20 lakh Foreign Education - Up to Rs.20 lakh.
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Bank of India
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Domestic Education - Up to Rs.10 lakh Foreign Education - Up to Rs.20 lakh.
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HSBC
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Loan up to Rs.5 lakh.
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Punjab and Sind Bank
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Domestic Education - Up to Rs.15 lakh. Foreign Education - Up to Rs.20 lakh.
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ICICI Bank
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Domestic Education - Up to Rs.50 lakh Foreign Education - Up to Rs.1 crore.
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