If you are a student planning to study abroad and are looking for an education loan, then you are not alone in the process. With this article we will guide you through the process of how you can get an education loan without collateral. You will learn all about getting an education loan without collateral also known as unsecured loan in this article.
Furthermore, if you require our assistance in getting the loan, we will be happy to help you. But before getting to know about the process of availing an education loan for abroad studies without collateral let’s have a look at the details you need to know about before proceeding with the application of the loan.
What is an Education Loan Without Collateral?
An unsecured loan is one that is granted entirely on the basis of the borrower's creditworthiness, with no collateral pledged as security in the case of failure or non-payment of dues. Unsecured loans, sometimes known as personal loans, are typically given to borrowers with excellent credit ratings.
Where to Get the Education Loan Without Collateral?
The main source providing an education loan without collateral are NBFCs, private banks, and international lenders. But NBFCs are the ones that are the major financers of unsecured loans or collateral loans.
An NBFC is a financial institute which has the permit to manage transactions similar to that of a bank. However, they do not hold full banking license which also means that they cannot perform certain activities which a bank can such as they cannot accept demand deposit, circulate cheques drawn on themselves, indulge in Agricultural, Industrial Activity, sale-purchase, construction of immovable property, etc. NBFCs can provide banking services to people without holding a full-time license.
And because of all the reasons listed above, NBFCs majorly focuses on providing collateral free loans and thus are a great option if you are looking for collateral free education loan in India for study abroad. Some NBFCs that provide these loans in India are Credila, Avanse, Incred, Auxilo, Credenc.
To avail this education loan there are certain criteria which are needed to be met by the student and co-applicants applying for this loan.
• The student applying for the loan must be 18 years old or above.
• The student must have an admission in a reputed and recognised institute
• The student’s academic profile should meet the eligibility criteria laid by the NBFC. The NBFC scrutinizes the academic profile secondary and higher secondary certificate as well as GRE, IELTS, TOEFL, SAT grades.
• The co-applicant must have a fixed income.
• Financial documents such as ITR, Salary slips, and bank account statements of the co-applicant are necessary.
Points to Consider
If you find yourself eligible to apply for unsecured loans you can proceed with the applications. But keep these important factors in mind before applying for an education loan at an NBFC:
• The interest rates range from 11%-14% and also depends on country to country, so check with your lender before getting the loan.
• You can get a loan amount of up to 40 – 50 lakhs on a non-collateral loan.
• The payment of the interest amount starts from the month following the loan disbursement period.
• The moratorium period for these loans is the same as your course duration and additional six months after that. A NBFC might extend this time period for a year depending on your case.
• The maximum loan tenure is of 10 years if you avail the loan from an NBFC.
• NBFC charges 1% of the total processing fees with additional GST charges.
• We will help you create you profile so you can know your eligibility for the loan and whether or not you qualify for it.
• We will also assist you with the documentation and application process.
• Our aim will always be to help you achieve the loan. Assisting you throughout the entire process to the last step of the process which is getting the loan sanctioned and disbursed.
We will guide you entirely from the process of selecting the right financial institute as per your needs to help you through the entire process of getting the education loan for abroad studies without collateral.