Study Abroad Education Loan: No Collateral or Co-applicant Needed

Can you get an education loan to study abroad without pledging collateral or a financial co-applicant? The answer is yes! In this guide, you will explore different types of education loans, the eligibility criteria, and options for obtaining an education loan without collateral or a financial co-applicant.

Understanding Secured and Unsecured Education Loans

1. Secured (Collateral) Loans: These loans have collateral, immovable property (house, land), or liquid assets (fixed deposit, insurance policies). The rates of such loans are lower, and eligibility is less restrictive.

2. Unsecured (Non-Collateral) Loans: No collateral is required for an unsecured loan. However, a financial co-applicant is most commonly required. These loans are usually required to have a strong financial co-applicant with a steady income, who files income tax returns (ITRs).

Is it Possible to get an Education Loan Without Collateral and a Co-applicant?

Yes, you can obtain a study abroad loan without having to provide collateral or include a co-applicant. Nowadays, a large number of financial institutions and foreign lenders offer education loans without collateral and a co-applicant to students with solid academic records and verified admissions to reputable universities. These loans help students who can support themselves but don’t have enough money to pay for their studies abroad.

Top Lenders Offering Education Loans Without Collateral or a Co-applicant

When you don't have a co-applicant or collateral, it's crucial to find the right lender. Nowadays, several banks and global financing platforms provide unsecured education loans without a co-applicant to worthy students based on their academic standing, university ranking, and future employment opportunities. These are a few of the top choices.

State Bank of India

SBI offers a collateral-free education loan without the need for a co-applicant. In order to get a collateral-free education loan from SBI, the student needs to secure admission from the top 100 universities. But a primary co-applicant is required to get an education loan.

ICICI Bank

ICICI Bank provides a great range of abroad education loan products.It offers collateral-free loans of up to 50 lakhs or more for students who have been admitted to top universities. ICICI also allows loans without a financial co-applicant, provided they meet the eligibility criteria.

Prodigy Finance

Prodigy Finance is one of the major NBFCs that provides an education loan abroad without collateral and a co-applicant. Prodigy Finance ensures a hassle-free financing solution. Additionally, there are no prepayment penalties, allowing students to repay early without extra charges.

MPOWER Financing

MPOWER Financing offers study abroad loans without any collateral or a co-applicant, at reasonable interest rates to students. The lender provides education loans only for educational institutions that are located in either the USA or Canada. The loan amount is provided in CAD or USD based on your university.

Benefits of Taking a Loan Without Collateral and a Co-applicant

There are so many benefits of taking a loan without collateral and a co-applicant. A few of them are

• No need to provide collateral or property.

• Faster loan process

• Covers all the expenses, which include tuition fees, living expenses, and travel costs.

• Ideal for students who do not have a financial co-applicant.

Eligibility Criteria for the Study Abroad Loan Without Collateral and Co-applicant

To be eligible for the study abroad loan without collateral and a co-applicant, students need to meet these conditions:

• Admission from a recognized university

• Good academic records

• Strong test scores in entrance exams such as GRE, IELTS, or TOEFL.

• A course with good job prospects after graduation.

Documents Required for Loan 

When applying for a non-collateral loan with no co-applicant, make sure to have the following documents ready:

• University admission letter.

• Copy of the passport.

• Academic transcripts.

• Entrance test scores

• Course fees structure

• Basic documents such as Aadhar, PAN Card.

How to apply for a Study Abroad Loan Without Collateral and Co-applicant

With the growth of online lending platforms and foreign lenders, it is now easy to apply for a study abroad loan without collateral or a co-applicant. From eligibility checks to disbursement, the entire procedure can be finished online. This brief, step-by-step guide will help you apply more easily and have your loan approved more quickly.

Check if our university and course are eligible with the lender.

1. Fill out the application form.

2. Upload the required documents that are requested by the lender.

3. Wait for the approval. 

4. Sign the loan agreement after the loan approval.

Drawbacks of taking a Loan through USD Lenders

USD Lenders like Prodigy Finance and MPOWER Financing make it easier to study abroad without collateral and a co-applicant, but taking a loan in USD can come with some drawbacks.

Students need to understand these drawbacks before applying.

1. Processing Fees - Indian lenders charge lower processing fees, which are approximately 1% - 2% of the loan amount. But USD lenders like MPOWER Financing charge 5% of the loan amount.

2. Loan Insurance - Indian lenders may offer loan insurance that can help protect the applicants in case of any situations, like loss of a job or disability. This option may not be available with foreign lenders.

3. Income Tax Exemptions - Students who have taken education loans from Indian banks or NBFCs can avail an income tax exemption on the interest amount. Taking out a loan from USD lenders does not qualify for income tax exemptions.

4. High Rate of Interest - USD lenders charge a very high interest rate for their education loans. When compared to Indian lenders, USD lenders charge more than 2% to 4% higher.

5. Currency Fluctuation - Currency fluctuation with INR depreciation (Ex, 1$ was 64 in Jan 2018 and today 1$ is above 70). Ultimately, you repay way higher than what you borrowed today.

Conclusion

You can obtain a study abroad loan without collateral or a co-applicant, especially from lending institutions such as SBI, ICICI, Prodigy Finance, and MPOWER Financing. These loans generally require strong academic qualifications and acceptance into a good university. However, be cautious of potential disadvantages such as higher interest rates, processing fees, and currency exchange rates when dealing with overseas lenders. Consider your options carefully to get the most suitable loan.