Education loans are widely known financial aid to students who want to pursue studies abroad. Some of the students do not have enough security or collateral to take the loan against. Private education loan without collateral is the next best option for such students. This article covers a detailed description of the third episode of the YouTube series "Loanflix- Education loan Simplified" which has been embedded below.


Private Education Loan without collateral- What is it? 

A Non-Collateral education Loan is a loan that does not require the applicant or co-applicant to place any collateral or security. Nevertheless, other factors like co-applicant's income and the candidate's earning potential are taken into account.

The Co-applicant can be parents, siblings, parent’s siblings. Cousins are also accepted in rare cases. Spouses are not eligible as a co-applicant.

Who provides Private Education Loan without collateral?

Private Education Loan without collateral is usually offered by Non-Banking Financial Company commonly referred to as NBFCs.

The NBFCs operating primarily in the education loan segment in India are Avanse, Incred, HDFC Credila and Auxilo. We at WeMakeScholars work with all the above NBFCs except Credila. There are certain benefits you can be eligible for when you apply to these NBFCs via WeMakeScholars, rather than applying on your own directly.  

NBFCs only operate in the major Indian cities. Hence, it is required that either applicant or co-applicant must be a resident of one of the major cities. The public banks also offer non-collateral education loans, but it is only up to a loan amount of maximum Rs. 7.5 lacs. Also, their application process is very tedious and time-taking.

Which Countries and Courses are Eligible for a Private Education Loan Without Collateral?

The NBFCs primarily offer an education loan for students pursuing any of the STEM courses i.e Science, Technology, Engineering and Mathematics courses at the host country. They offering to fund to a non-STEM course is rare.

Host countries eligible for private education loan includes the top 5 destinations where students opt to study abroad- US, Canada, Germany, Ireland, and Australia. Well ranked and top universities in other countries are also eligible on a case to case basis.

Private education loan without collateral - Amount offered 

The amount of private education loan without collateral offered by NBFCs depends on the education destination:

USA: up to Rs. 50 lakhs, with an average loan of 35- 40 lakhs.
Germany: Rs. 15-18 lakhs.
Australia: Rs. 10-15 lakhs.
Canada: Rs. 15-18 lacs in case of colleges and Rs. 25- 30 lakhs in case of universities. 

Rate of Interest (ROI)
The rate of interest charged by these NBFCs varies between 10.75% to 14%, depending on the profile of the applicant and the co-applicant.

Factors considered while reviewing the applicant’s file for private education loan without collateral


If the applicant is seeking an education loan to pursue MS in the US then GRE score of the applicant is of the highest priority. A GRE score of 300 and above is most preferred. Below this score, the chances of getting a private education loan without collateral become very slim. Other aspects like GPA, TOEFL etc. are also considered for education loan for the US.

If the applicant is seeking a private education loan to pursue abroad education in countries like Canada, Australia, Germany, and Ireland, then that applicant’s 10th, 12th, and higher degree GPA, IELTS/ TOEFL or equivalent test score is given more importance.

The Co-Applicant’s profile:

The Co-applicant's financial status like their Income, Income-Tax Return (ITR) of the last two years, CIBIL score (685 for NBFC, 700 for government banks) is strongly considered.

Advantages of applying for private education loan without collateral through WeMakeScholars

There are certain benefits you get when you apply for private education loan without collateral through WeMakeScholars. They are listed below:

  • A lower rate of interest: As WeMakeScholars is associated directly with the head office of these lenders, you get at least a 0.5% reduction in the rate of interest. Hence you get the best rate in the market.
  • Deviations possible:  Lenders usually tend to avoid risks by rejecting a case which has deviation. The WeMakeScholars team will negotiate with the head office of the lender on your behalf, whenever any deviations are hindering the sanction of your education loan.
  • Best customer support: With qualified financial officers assigned to each one of you, WeMakeScholars team tries to answer each and every query either you or your parents might have related to the education loan process.
  • Cashback: Post sanction, you will be rewarded with a cashback on multiple disbursements to a maximum of INR 3000, as you are supporting the Digital India campaign by applying for your study abroad education loan via WeMakeScholars.
  • Low processing time: If applied via WeMakeScholars, the time taken for the education loan application to be sanctioned at NBFCs is just 7 to 14 days.

Partially Secured Education loan

If the applicant’s profile is not eligible for private education loan without collateral, then they could place partial security and gain a partially secured loan. The amount of this security can be much lower than the amount of loan the applicant is seeking. This is not a well-known practice but can greatly increase the chance of you getting a loan.

For example: sometimes you might be able to get an education loan sanctioned for Rs. 15 lakhs by pledging an FD of just Rs. 3 lakhs. Such hacks will be shared with you by the assigned WeMakeScholars financial officer, once you start the process.

This episode of Loanflix will introduce you to certain hacks which would prove to be useful in the long run.  If you have any other questions regarding abroad education loan or any other related topic, feel free to request a call back from the WeMakeScholars support team for clarifications. We are very active online and would love to answer your comments. 

Note: WeMakeScholars is an organization funded and supported by the Government of India that focuses on International Education finance. We are associated with 10+ public/Pvt banks/ NBFCs in India and help you get the best abroad education loan matching your profile. As this initiative is under the Digital India campaign, it's at free of cost. The organization has vast experience dealing with students going to various abroad education destinations like the US, Canada, UK, Australia, Germany, Sweden, Italy, China, France among others.