Studying abroad is a dream for many students. But the biggest challenge is managing the high cost of education. Tuition fees, living expenses, flight tickets, insurance, and more — the total cost can go beyond ₹30 to ₹50 lakhs. But don’t worry! Many banks and financial institutions offer education loans without collateral. That means you can get a loan without keeping any property or asset as security.
In this blog, you’ll learn how to get education loan for abroad studies without collateral. Let’s begin!
Also Check: Which Bank Has Lowest Interest Rate on Education Loan in India?
📌 What Is an Education Loan Without Collateral?
An education loan without collateral is a type of loan where students don’t have to mortgage any property, gold, or FD to get funds for studying abroad. It is also called an unsecured education loan.
This loan is based on:
- Your academic profile
- Your admission letter
- Your co-applicant’s income and credit score
- The country and course you choose
✅ Who Can Get a Loan Without Collateral?
You are eligible if:
- You are an Indian citizen
- You have good academic marks (usually 60% and above)
- You have an admission letter from a recognized university abroad
- Your co-applicant (usually a parent) has a stable income (₹35,000+ per month) and a good CIBIL score (600 or more)
- You are applying for postgraduate courses (like MS, MBA, etc.)
❌ Usually, undergraduate courses, pathway/foundation courses, and MBBS/pilot training abroad are not eligible for loans without collateral.
📋 Documents Required
For the student:
- Passport & Aadhar card
- Admission letter from university
- Academic certificates (10th, 12th, graduation)
- IELTS/GRE/TOEFL scorecard
- Statement of cost of study
For the co-applicant (parent/guardian):
- ID and address proof
- 6 months salary slips
- 2 years ITR or Form 16
- Bank statements (last 6 months)
🪜 Step-by-Step Process: How to Get Education Loan for Abroad Studies Without Collateral?
1. Check eligibility
Use online portals (like BankBazaar or Credenc) or contact banks directly.
2. Select the right lender
Compare interest rates, loan amount, and repayment terms.
3. Submit documents
Give your academic and financial documents.
4. Loan sanction
If approved, you will get a loan sanction letter.
5. Disbursement
The money is transferred to your university account or to you, as per the need.
💰 How Much Loan Can You Get?
Most lenders provide:
- Up to ₹40–50 lakhs for top universities abroad (like in the USA, UK, Canada)
- Some banks (like Axis Bank) offer up to ₹75 lakhs under special schemes
💸 Interest Rates
- Interest rates for unsecured education loans usually range from 10.5% to 14% per annum
- They are a bit higher than secured loans because the risk is higher for the bank
🧮 Example Loan Calculation
Let’s understand with a simple example:
Loan Amount: ₹40,00,000
Interest Rate: 12% per annum
Loan Tenure: 10 years
Moratorium Period: 2 years (no EMI during study period)
📌 Calculation
During moratorium (2 years):
- Simple interest charged = ₹40,00,000 × 12% × 2 = ₹9,60,000
- This amount is added to the principal
- New principal = ₹40,00,000 + ₹9,60,000 = ₹49,60,000
Now EMI will be calculated for ₹49,60,000 over 10 years:
Monthly EMI ≈ ₹71,714
(Use online EMI calculator for exact values)
Can I get a 20 Lakhs Education Loan Without Collateral?
✅ Basic Eligibility to Get ₹20 Lakhs Without Collateral
- You are going for a PG course abroad (like MS, MBA, etc.)
- You have a confirmed admission letter from a recognized university
- Your co-applicant (parent/guardian) has:
- Stable monthly income (₹35,000+)
- Good credit score (CIBIL 650 or above)
💸 Estimated Cost Breakdown (Example: 2-Year Master’s in Canada)
| Expense Type | Approx Cost (INR) |
| Tuition Fees (2 yrs) | ₹14,00,000 |
| Living Expenses | ₹4,00,000 |
| Travel & Visa | ₹1,00,000 |
| Other Costs | ₹1,00,000 |
| Total | ₹20,00,000 |
🧾 Interest & EMI Calculation
Let’s assume:
- Loan amount: ₹20,00,000
- Interest rate: 12% per annum
- Loan tenure: 10 years
- Moratorium period: 2 years (no EMI, only simple interest)
📍 During Moratorium (2 Years)
- Interest = ₹20,00,000 × 12% × 2 = ₹4,80,000
- This is added to the principal
👉 New Loan Amount = ₹20,00,000 + ₹4,80,000 = ₹24,80,000
💰 EMI After 2 Years
For ₹24.8 lakhs over 10 years at 12% interest:
EMI ≈ ₹35,858/month
(Total repayment over 10 years ≈ ₹43,00,000)
🏦 Lenders That May Offer ₹20 Lakhs Without Collateral
| Lender | Max Loan (Unsecured) | Notes |
| Axis Bank | ₹75 lakhs | For top universities, MS abroad |
| HDFC Credila | ₹45–50 lakhs | Custom loans for good profiles |
| Avanse | ₹40 lakhs | Flexible EMI, fast disbursal |
| InCred | ₹40 lakhs | GRE & co-applicant based |
🏦 Top Lenders for Loans Without Collateral
| Lender | Max Loan Amount | Interest Rate (Approx) | Special Feature |
| Axis Bank | ₹75 lakhs | 11–13% | GRE-based, MS abroad loans |
| ICICI Bank | ₹40–50 lakhs | 11–13.5% | Quick disbursal, wide coverage |
| HDFC Credila | ₹45–50 lakhs | 11–13% | Custom loans, doorstep service |
| Avanse | ₹40–50 lakhs | 11–14% | Flexible repayment |
| InCred | ₹40 lakhs | 12–14% | For high-ranked colleges |
| Auxilo | ₹50 lakhs | 12–13.5% | Fast approval process |
💡 Pro Tip: Private banks and NBFCs give more flexible loans than public banks for unsecured loans.
🎓 Tips to Improve Your Chances of Getting a Loan
- Score well in GRE/IELTS (GRE above 300 helps!)
- Choose top 200 ranked universities
- Make sure your co-applicant has a good credit score (700+)
- Show other financial support, like FDs or savings (even if not pledged)
🔁 Repayment Options
Repayment starts after the moratorium (study + 6 months/job time). You can:
- Start paying full EMI after 2 years
- Choose part interest payment during study
- Repay early without extra charges (check with the lender)
📝 Final Thoughts
Getting an education loan without collateral is now easier than ever, especially for deserving students going for PG courses in good universities abroad. You don’t need to risk family property or assets. With the right documents, good co-applicant profile, and university admit, your dream of studying abroad can come true.