Education Loan Without Collateral

Education Loan Without Collateral

Educational loans help the students to achieve their dream of attaining higher education. It is great financial support provided by the banks in the context of education prices being escalated by each year. In India, education loans are open to any Indian citizen between the age of 16 to 35 years and enthusiastic to pursue higher education. Education loans are given so as to make it easier for students to pursue their dreams and aspirations with no hesitations as such and attain their end view and their academic vision in life.

These days, the growing need and urgency of students wanting to apply to premier institutes but lacking the finances to do so are the concern. After the assistance scholarships tend to provide, education loans are your go-to hub for financial aid. Even the process of attaining an education loan has been oversimplified from the past couple of years. Hence it is an easier approach for families and individuals to avail and attains.

These Education loans are usually approved for the candidates who have taken the admission in any designated college or any educational institute recognized by the bank and the details regarding them are listed as the table of content given below

Factors to consider before applying for an educational loan

The rate of Interest - It is available under both fixed rate of interest and floating rate of interest which can be chosen by the borrower’s convenience. The fixed rate of interest can be higher than that of the floating rate of interest but the risk of change in interest rate according to market fluctuation doesn't come into the picture.

Waiver Period - A loan waiver is the waiving of the real or potential liability of the person or party who has taken out a loan through the voluntary action of the person or party who has made the loan. The loan repayment does not start immediately after the student passes out. There is a waiver period given in order to search for a job or to establish a business. Usually, the waiver period is 6 months but still varies according to the terms of each bank. It is also essential to note that the interest is charged during the waiver period.

Margin Money - Margin money refers to the amount you need to pay from your own fund. There will be a percentage given by the bank which has to be arranged by the applicant and the bank pays the remaining amount. Anyway, education loan up to Rs. 4 Lakhs does not require any margin money. For loans above 4 Lakhs require a 5% margin for studies within India and 15% for studies abroad.

Prepayment of Education Loan - Most of the banks do not charge any fees/penalty in case a borrower wants to close the loan by paying the entire loan amount in one shot. Some banks may charge a nominal fee as per the terms and condition. Therefore it is important to check for the prepayment conditions to avoid problems later at the stage of prepayment.

Education Loan for female students - As an intention to empower women students almost all the public sector and private banks offer lower interest rate for female students. In most of the cases, the concession will be about 0.50%

Education Loan Without Collateral

Education Loans are of two types: Secured Loans and Unsecured Loans (Loans without Collaterals)

Loans backed by collateral i.e financial assets like home, or a car which can be used as a payment to the lender if you don't pay back the loan is called as Secured Loan While applying for a secured loan, the lender will ask which type of collateral to back up the loan.

Loans issued and supported by the Borrower's creditworthiness rather than any type of collateral are called Unsecured Loans. They are sometimes also referred to as signature loans or personal loans

Collateral is an immovable property or any other asset such as FD, shares, bond and so on which is offered to the financier by the borrower to secure the loan. If the borrower stops repaying the loan, the bank can seize the collateral to recover the loss incurred by the bank in context with the loan provided.

Banks and financial institutions ask for collateral to mitigate the risk. If a student fails to make the repayment of the education loan, the collateral is used towards the payment of the same.

You have no need to worry if you don’t have any collateral to pledge. There are many banks that provide a loan without collateral for education.

According to the guidelines of the RBI, all banks have the credential to provide education loan without collateral up to Rs 7.5 lakhs even though there are few criteria which have to be met by the applicant. Private and Non-Banking Finance Corporations provide loans up to INR 50 lakhs without security.

Banks which offer Educational Loan without collateral

Banks which offer Education Loan without collateral


Loan Amount


Up to Rs.15 lakhs for domestic education and Up to Rs.20 lakhs for Foreign Education. For loans up to Rs.7.5 lakhs no collateral is required


Loan up to Rs.5 lakhs

State Bank of India (SBI)

Up to Rs.15 lakhs for Domestic Education and Up to Rs.20 lakhs for Foreign Education. No collateral is not required For loans up to Rs.4 lakhs.

Punjab and Sind Bank

Up to Rs.15 lakhs for Domestic Education and Up to Rs.20 lakhs for Foreign Education. No collateral is not required For loans up to Rs.4 lakhs.


Up to Rs.15 lakhs for Domestic Education and Up to Rs.20 lakhs for Foreign Education. No collateral is not required For loans up to Rs.4 lakhs.

Education Loan Eligibility

The eligibility criteria for education loan is been listed below

  • The eligibility criteria may vary according to each bank and some of the basic eligibility criteria are given below.

  • The candidate must be an Indian Citizen.

  • The student must have confirmed the admission to any recognized educational institutes in India or abroad.

  • The age of the candidate must fall between 18 to 35 years.

  • The applicant seeking full-time courses should have a co-applicant who can be either parent/guardian or spouse/parent-in-law in case of married applicants.

  • Students should display a good academic record.

Education loans like the ones aforementioned make sure that your limited resources and your lack of belief or possession of a collateral do not get in the way of your education and the vision you have in mind, It so often happens that students are forced to abandon their dreams owing to the financial obstacles and circumstances that come their way, Education loans without collaterals eliminate such circumstances and help you reach whatever career point you aim to reach, repaying your loans with ease and understanding. 

Visit your nearest bank for such a loan and fund your way right through college.

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Akashjyoti Banerjee

I am interested.Please send me application procedure of any bank in easiest method.



hello. i'm lincoln from vizag, i'm 21 years old and i want to do fire and safety course but i don't have enough money. so can i apply for a education loan up-to 50,000 rupees?



Hi Lincoln,

Please visit the article "Education Loans in India" for more detail on eligibility criteria to apply for a loan.

Thank You.

N S V S S Eswar