Top lenders for non collateral education loan

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With the help of non collateral educational loans, students with limited funds can pursue their desired degree programme in India or overseas. Up to a certain amount, a number of banks provide  non collateral education loan. Lenders and institutions that commonly offer non collateral education loan

  1. Government-Backed Loans: In many countries, governments offer student loans with favorable terms, often without requiring collateral. Examples include federal student loans in the United States and Canada Student Loans in Canada.
  1. Private Banks and Financial Institutions: Some private banks and financial institutions offer non-collateral education loans. These loans may have varying interest rates and repayment terms.
  1. Non-Banking Financial Companies (NBFCs): In some countries, non-banking financial companies specialize in providing loans, including education loans. They may offer non-collateral loans with different terms compared to traditional banks.
  2. International lenders: Furthermore, overseas lenders such as Prodigy Finance and MPower are also great options. These lenders help candidates by offering collateral-free education loans for overseas study up to 80% of the total cost.

Top lenders that provide non collateral education loan

Many people consider it a dream come true to pursue their higher education abroad. Due to the allure of varied learning environments, exposure to other cultures, and esteemed academic institutions, students frequently decide to pursue their education abroad. Below prominent lenders that typically offer non collateral education loan:

  • State Bank of India (SBI):
    • SBI Global Ed-Vantage Scheme:
    • SBI provides education loans under the Global Ed-Vantage scheme for students looking to pursue higher education abroad.
    • The loan covers tuition fees, examination fees, library/laboratory fees, hostel fees, and other related expenses.
    • Collateral-free loans are available for amounts up to INR 7.5 lakhs, and for higher amounts, collateral may be required.
    • The repayment period can extend up to 15 years, including the moratorium period.
  • HDFC Credila Education Loan:
    • HDFC Credila, a subsidiary of HDFC Ltd, specializes in education loans and offers customized solutions for students going abroad.
    • Loans cover tuition fees, living expenses, exam fees, and other related costs.
    • Flexible repayment options are available, and the repayment tenure can extend up to 10 years.
    • HDFC Credila provides loans without the need for collateral up to a certain amount.
  • Axis Bank:
    • Axis Bank offers education loans for students planning to pursue higher studies abroad.
    • Loans cover tuition fees, living expenses, travel expenses, and other related costs.
    • Collateral may be required for higher loan amounts, and the repayment period can extend up to 15 years.
    • Interest rate concessions may be available for female students.
  • ICICI Bank:
    • ICICI Bank provides education loans for students going abroad for higher studies.
    • The loan covers tuition fees, living expenses, examination fees, and other related costs.
    • Repayment tenures are flexible, and collateral may be required for higher loan amounts.ICICI Bank may offer preferential interest rates for certain courses and institutions.
  • PNB (Punjab National Bank):
    • PNB Udaan Scheme:
    • PNB offers education loans under the Udaan scheme for students aspiring to study abroad.
    • Loans cover tuition fees, hostel expenses, examination fees, and other necessary expenses.
    • Collateral may be required based on the loan amount, and the repayment tenure can extend up to 15 years.
    • Interest rates are competitive, and there may be concessions for female students.

Key features of non collateral education loans

Non collateral education loan are loans provided to students without the requirement of providing any collateral or security. These loans are usually granted based on the applicant’s academic record, the course or program being pursued, and the potential future earning capacity of the student. Here are key features of non-collateral education loans:

  • No Collateral Requirement: The primary feature is that  non collateral education loan do not require the borrower to provide any form of collateral or security. This makes the loan more accessible to a broader range of students and their families.
  • Based on Merit and Course: Approval for non collateral education loan is often based on the student’s academic performance and the reputation of the educational institution or course being pursued. Good academic records and admission to reputed institutions can enhance the chances of loan approval.
  • Loan Amount: The loan amount is determined based on the total cost of education, including tuition fees, living expenses, travel costs, and other related expenses. The loan amount may vary among different lenders.
  • Interest Rates: Interest rates for non collateral education loan are typically competitive. The rates may be fixed or floating, and they can depend on factors such as the lender’s policies, the student’s academic performance, and the course or institution chosen.
  • Repayment Tenure: The repayment tenure for these loans is generally flexible, allowing students to start repaying the loan after completing their education or securing a job. The tenure can vary, and some lenders may offer grace periods.
  • Co-borrower or Guarantor: While non collateral education loan do not require collateral, some lenders may require a co-borrower or guarantor. This person is usually a parent or guardian who agrees to take responsibility for the loan if the student is unable to repay.
  • Eligibility Criteria: Eligibility is determined based on the applicant’s academic qualifications, the chosen course, and the reputation of the educational institution. Some lenders may have specific eligibility criteria that need to be met.
  • Processing Time: Non collateral education loans often have a relatively faster processing time compared to traditional loans that require collateral. This allows students to secure funding quickly for their education expenses.
  • Prepayment Options: Some lenders may offer prepayment options without charging any penalty. This allows borrowers to repay the loan before the stipulated tenure and potentially save on interest costs.
  • Insurance Coverage: Some lenders may offer insurance coverage as an option, providing financial protection in case of unforeseen circumstances such as the death or disability of the borrower.

It’s essential for students and their families to carefully review the terms and conditions of non collateral education loans from different lenders, comparing interest rates, repayment terms, and additional features to make an informed decision. Additionally, these features can vary among lenders, so it’s advisable to check with specific financial institutions for the most accurate and up-to-date information.

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