Apply Education Loan without Collateral for Abroad Studies | GyanDhan

Published date: 19 Nov 2016 Updated on: 06 Apr 2020 Studying Abroad is Now Easier with GyanDhan’s Education Loan Without Collateral for Abroad Studies. Many students aspire to get into their dream universities abroad for their higher studies. However, due to the complicated process of getting an education loan for abroad, many among them settle for a job in India or choose an Indian Institute for further studies. Why should students kill their aspirations because of financial shortage? To help students get admissions in their choice of university, GyanDhan has developed a novel strategy to offer education loans at low-interest rates to all aspiring students. In this blog, we will try to provide a general idea about educational loans, with a focus on unsecured education loans or education loan for abroad studies without collateral Why Apply for an Education Loan? The overall cost that will be incurred including the fees for studying abroad depends a lot on the country you plan to choose. For example, an MS in the USA will typically cost you around the US $65,000- $70,000. Considering the high exchange value and the growing cost of higher education, a considerable number of Indian students need to apply for education loans, especially from mid-income families. Apart from this, it is a smarter financial move to take an education loan rather than spend your savings. Looking For Without Collateral Study Abroad Loan? Fill this form and get in touch with an expert Why is Collateral Usually Required for an Education Loan? A number of public sector banks, private banking institutions, and financial corporations offer different kind of education loans at varied rates of interest. Most of them offer loans up to 7.5 lakhs without the need for arranging any collateral by the borrower. However, for a credit limit crossing 7.5 lakhs, most organizations ask for a deposit of any asset as collateral. The collateral is asked to handle the NPAs i.e. the Non-Performing Assets in case the borrower defaults on the loan payments. Collaterals are a risky business, and many get uncomfortable at the thought of taking a loan against their personal assets as security. But worry not, GyanDhan is India’s leading education loan startup. We make it possible to get study abroad education loan with or without collateral from Indian banks and non-banking financial institutions! What Are The Existing Education Loans To Study Abroad Offered By Banks Our motto is to make higher education accessible to maximum numbers, so we have included all kinds of players from the public to private. The existing Banking and Non-Banking financial organizations offer education loans at differing interest rates. A couple of examples: Education Loan from Bank of Baroda, one of the largest banking institutions in our country, offers education loans of up to INR 80 lakh for the listed institutes and 60 lakh for the unlisted ones. The interest rates start from 9.90% for the listed institutes and 10.65% for the unlisted ones for all loans above the INR 4 lakhs ceiling. Note that these interest rates are floating, and may change with time The bank also offers a concession of 0.50% for girl students planning to study abroad irrespective of the institute listing. Axis bank, a prominent private bank is offering education loans up to INR 75 lakhs for studying abroad. One of the key features of the bank is that it offers education loan for abroad studies without collateral up to 40 lakhs. Like any other lending institutions, the interest rates vary from 11% to 13% depending upon the applicant’s profile. InCred is an NBFC that offers education loans with collateral up to 1 Crore for abroad studies and the amount without collateral is 40 lakh (can be increased with exception). The interest rates broadly range from 11.75% to 16% depending upon the loan amount. In recent years, many Non-Banking Financial Corporations and private lenders have emerged to provide loans without collateral. How to Get an Education Loan without Collateral Private banking entities such as Axis and ICICI Bank and Non-bank finance companies, such as InCred Finance and Avanse, offer education loans without collateral but their application procedure and approval policy are unclear. Now, this is where GyanDhan comes into the picture. It facilitates sanction of education loans without collateral at low-interest rates (starting at 11%, as on the date of this blog) - in a transparent and quick application process. 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 9.90% for boys and 9.40% for girls (these rates are as on the date of publishing this blog and may change with time). What is the Procedure to Avail Student Loans from Foreign Institutions You can also avail the Foreign Student Loans offered to international students in abroad Universities. However, here the borrower needs to have a co-signer as a guarantor who should be a permanent citizen of the respective country with a good credit record. The Co-signer is obliged to repay the loan in the event of the borrower defaulting; moreover, it is difficult to find a co-Signer in a foreign country. Although, recently, a few foreign lending organizations have started offering student loans without requiring co-signers. However the processing fee is typically quite high (2.5%-5%), and the $-based interest rates are high as well (10%-12% typically). For example, if you assume that 10% in USD is a low-interest rate – think again! 10% in USD is comparable to 15% in INR due to some factors. More Detail Guide !! Download Here


This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/how-to-get-an-education-loan-without-collateral-for-MS-in-US

Why should we favor Indian lenders over international lenders when we can get an unsecured loan from them at a lower rate?

Loans in INR are always more beneficial to Indian students. Loans in USD tend to be expensive in the long run due to the fluctuations in the foreign exchange rate. Let’s understand this with an example. Let’s suppose you took an education loan of USD 50,000 from an international lender at 9% in 2012 when 1 US Dollar was equal to INR 45. The same loan amount in INR would have been INR 22.5 lakhs. When you start repaying the amount after two years of study in 2014, you will repay more as in 2014, $1 = INR 60. So, it might seem that the international lender is offering a lower rate of interest, but down the line, you’d have to repay more than you initially owed.
This concept is wonderfully explained in this short video -


Moreover, you can get secured education loans from Indian lenders which are more cost-effective than unsecured education loans. The loan limit is more with a lower rate of interest.

Who can be a co-applicant for an education loan in India?

Would it be possible to get a loan without a co-applicant?

Your immediate family members - father, mother, brother, or sister - can be your co-applicants. Banks accept family members only as co-applicants. In case you take the loan from NBFCs, then you can have additional co-applicants such as a your cousin, uncle, or aunt. There will be multiple co-applicants. The earning members would be financial co-applicants and your parents would be the primary co-applicants.

If you are looking for an unsecured education loan, then a co-applicant is mandatory. The requirement of a co-applicant is dropped in the case of secured education loans. You will have to pledge collateral to get a secured loan.