Want to study abroad but worried about financing? You're not alone! Thousands of students aim to pursue international education, but they don’t have enough savings. In such cases, non-collateral education loans act as a significant solution. These loans enable you to pursue your studies abroad without the burden of pledging any physical assets as security. This article explains everything you need to know about a foreign education loan without collateral.
What is a non-collateral Education Loan?
A non-collateral education loan for abroad is a loan in which the borrower is not asked to pledge assets such as property, fixed deposits, or other valuables as collateral. Rather, the loan is sanctioned on various parameters, such as the student's academic record, the university and course the student gets admission to, and the financial status of the co-applicant. A foreign education loan without collateral helps students pay for tuition fees, living expenses, transportation fees, textbooks, and other course-related expenses.
Eligibility Criteria for Non-Collateral Education Loan for Abroad
To get a non-collateral education loan for abroad, the students should meet the following eligibility criteria.
- Nationality: The borrower must be an Indian national.
- Age: The student must be 18 years and above, and if the student is under the age of 18, the parent or guardian is required to be the co-applicant.
- Confirmation of Admission: The student should have obtained admission to a renowned foreign university.
- Co-applicant Requirement: A co-applicant (spouse/parent/guardian) having a stable income is typically required.
- Academic Record: A good academic record can have the potential to improve the chances of loan approval.
Expenses Covered by Non-Collateral Education Loans
A non-collateral education loan will usually cover the following expenses:
- Tuition Fees: A non-collateral education loan mainly finances the tuition fees required for admission to a foreign university or college.
- Living Expenses: The loan assists students in covering necessary living expenses, such as accommodation, food, transport, and other miscellaneous expenses.
- Travel Costs: An education loan without collateral for abroad studies covers the expenses of air tickets and other travel expenses necessary for students to travel to their destination of study.
- Study Materials: The loan provides funds to buy the required study materials, including books, laptops, stationery, and other equipment required for the course.
Steps to Apply for a Non-Collateral Education Loan for Abroad
The steps to apply for a non-collateral education loan are as follows:
Step 1. Research and Compare Different Options
Compare various lending institutions since different institutions provide varying loan terms. Compare the interest rate, moratorium period, and repayment period before you apply.
Step 2. Verify Eligibility Criteria
Ensure you meet the eligibility criteria set by the lender before applying for a loan without collateral for abroad education.
Step 3. Gather Required Documents
To apply for a non-collateral education loan, applicants must submit essential documents including a filled loan application form, admission proof, academic records, identity proof (PAN or Aadhaar), income proof of the co-applicant (salary slips or Form 16), recent passport-size photos, and a six-month bank statement. These documents help the lender assess eligibility, repayment capacity, and financial stability.
Step 4. Fill Online or Offline
Many financial institutions offer online loan application services for your convenience. You can even fill out the form offline by visiting the branch.
Step 5. Loan Processing and Approval
Once you apply, it is then verified by the lender. If approved, the loan amount will be sanctioned and disbursed as per the policy of lending institutions.
Conclusion
A non-collateral education loan can help students achieve their dreams of studying abroad without needing to provide assets as security. It covers essential expenses like tuition fees, living costs, travel, and more. Students should check the loan terms, eligibility, and repayment options before applying. This is where Credila comes into the picture, offering education loans for abroad studies.
Disclaimer:
As of March 31, 2024. T&C apply.
Credila Financial Services Limited (Formerly known as HDFC Credila Financial Services Limited)
The education loan facility provided by Credila Financial Services Limited ('The Company') will be at the sole discretion of the Company and within the Company's prescribed credit and underwriting norms/guidelines prevailing at the time of processing and disbursing the education loan. The Company maintains the right to change the interest rate at any time and at its sole discretion, without prior notice.
