How to get Education Loan for higher studies abroad without collateral?

Dreaming of studying in a foreign country is exciting. But, figuring out how to pay for it can be tough, especially if you don't have something valuable like a house or land to use as collateral for a loan. That's where non-collateral Education Loans for abroad come into the picture. They let you borrow money for your studies abroad without any collateral, like a property. They make it easier for you to chase your dream of foreign Education Loan without worrying about collateral.

What is a Collateral Loan?

When you hear about a Collateral Loan, it simply means a loan where you need to give the lender something valuable you own, like a house or land, as security. If you are unable to pay back the loan, the lender can seize this asset. However, this can be a significant barrier for those without substantial assets, making dreams like studying abroad seem unattainable. Banks often ask for collateral for bigger loans because it reduces their risk.

What is a Non-collateral Education Loan?

A Non-Collateral Education Loan is a loan where you don't have to provide any security to the bank. It's a helpful option for students who want to study abroad but don't have significant assets to use as collateral. These loans are based on other factors, like your academic record, the course you want to study and your future job prospects. Banks like Axis Bank understand that students might not have big assets, so they offer these loans to help you get the education you want without the stress of providing collateral.

Benefits of Education Loan without collateral

No need for big assets: The biggest advantage is that you don't need to own something like a house or land to get this loan.
Focus on your studies: With no collateral at stake, you can concentrate on your education without worrying about losing your asset.
Broader access: These loans open doors for more students to study abroad, especially those who might not have significant assets.
Quicker process: Generally, the approval process for non-collateral loans is faster since there's no need to evaluate and approve assets.

Application procedure to apply for an Education Loan without collateral

Applying for an Education Loan with Axis Bank is a straightforward process. Here's how you can get started:

1. Online application: You can easily begin by filling out your application form online. This is a convenient option if you prefer to handle things digitally.

2. For existing customers: If you're already an Axis Bank customer, you have the added convenience of logging into Internet Banking or the Axis Bank mobile app. Here, you can browse through pre-approved personal loan offers, which might include Education Loans.

3. Visit a branch: You can visit your nearest Axis Bank branch. This is a good choice if you prefer face-to-face assistance or have specific questions.

4. Contact a Relationship Manager: If you have a Relationship Manager at Axis Bank, getting in touch with them can provide personalised assistance tailored to your needs.

Eligibility for Axis Bank's Unsecured Abroad Education Loan

1. Indian citizenship: Both the applicant and the co-applicant must be Indian citizens.

2. Academic record: At least 60% in Higher Secondary and Graduation.

3. Co-applicant's credit score: A credit score above 600.

4. Financial stability of co-applicant: Monthly income should be over ₹35,000 with no existing EMIs.

5. Income documentation: Co-applicant must provide either 3 years of ITR or 2 years of Form 16.

6. Family Relation: Co-applicant should be an immediate family member - father, mother, brother, sister or spouse.

7. Course restriction: The loan is applicable only for Master’s courses.

8. Admission Letter: Must have an admit letter for approved MS courses.

9. Listed institutions: The chosen university or college must be in the bank's approved list.

These criteria ensure that students can pursue their foreign Education Loan without collateral, subject to meeting Axis Bank's eligibility requirements. For further details, visit Axis Bank's Education Loan Page.

Differences in Education Loans: With collateral vs without collateral

Understanding the difference between these two types of loans is crucial in making an informed decision:

Aspect	Collateral Loan	Non-Collateral Loan
Collateral	Requires assets like property or investments as security	No need for any security or collateral
Loan amount	Typically offers higher loan amounts due to the presence of security	Might have a lower maximum limit due to no collateral
Interest rates	Often lower, as these loans are seen as less risky.	Slightly higher, reflecting the increased risk without collateral
Approval process	More complex and involves property evaluation.	Simpler and faster, with less documentation required

Types of Education Loans

1. PRIME ABROAD: This loan is ideal for full-time premier courses abroad. It is an unsecured loan of up to ₹75 lakh. It includes door-step service and a multi-currency Forex Card. The loan tenure can range up to 15 years.

2. GRE-based funding: It is an unsecured loan for abroad universities based on GRE score. It offers loan amounts up to ₹50 lakh and the loan tenure can range up to 10 years.

3. Income-based funding: This unsecured loan offers amounts up to ₹50 lakh based on the co-applicant's income. It covers all full-time abroad and domestic courses. The loan tenure can range up to 10 years.

4. Loan for higher study: This loan can be used for higher education in India or abroad. No collateral security is required here and it offers loan amounts up to ₹7.5 lakh. There are no pre-closure charges for clearling this loan early.

5. Loan for working professionals: This is an unsecured loan offering amounts up to ₹40 lakh for working professionals. There is no need for a co-applicant. The loan repayment tenure can range up to 10 years.

6. Balance transfer: This loan provides the option to switch your existing high-cost Education Loan to reduce your monthly EMI. There are no pre-closure charges applicable on this loan.

Each of these loan variants is designed to meet different educational and financial needs, ensuring that students and professionals alike can find a suitable option for their academic pursuits.

Documents required from the applicant for a Study Abroad Loan without collateral

KYC documents: Government-issued identity proof, address proof, and other necessary KYC details
Academic records: Mark sheets and passing certificates from your previous educational qualifications (SSC, HSC and Degree courses)
Admission proof: Copy of Admission Letter from the institute you'll be attending, along with the fee schedule
Financial documents: Bank statements or passbook details of the last 6 months
Optional guarantor form: Though optional, this can be an added advantage in the application process

Important points to keep in mind

Start planning early: Begin researching and applying for loans well in advance of your study abroad timeline.
Compare and choose wisely: Evaluate different lenders based on interest rates, fees and repayment terms.
Maintain good credit score: A good credit score can improve your loan approval chances and potentially secure lower interest rates.
Seek guidance: Consult financial advisors or Education Loan specialists for personalised advice and support.

Also Read: How to select the right Education Loan for you?

Conclusion

Embarking on an educational journey abroad is an exciting but often challenging endeavour, especially when it comes to financing. Understanding the nuances of Education Loans, particularly those without collateral, is crucial in making informed decisions. Axis Bank's diverse range of Education Loan options, including the Prime Abroad, GRE-based funding, and more, cater to various needs and circumstances. Whether you're a student aiming for higher studies or a working professional looking to upskill, these loans offer financial support without the burden of collateral.

Axis Bank's commitment to providing comprehensive, customer-friendly loan options underscores its dedication to empowering educational aspirations. With a focus on flexibility, Axis Bank offers Education Loans starting from ₹50,000, ensuring coverage of up to 100% of the education costs (including tuition, living and travel expenses). The swift disbursal process, pre-admission sanction letters for students post-GRE, refinancing options, and the ability to cover comprehensive costs beyond tuition fees highlight Axis Bank's effort to support students' educational journeys abroad.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.