All AnswersWithout any collateral will I get loan to study abroad?I have 100% in 10th, 79% in 12th, and 88% in diploma mechanical engineering. I don't have any property or collateral. I come from a poor family?
Asked by hensal deon over 2 years ago
Study Abroad Expert
Education loans provide significant financial assistance to students who are unable to pursue their education in India or abroad due to financial constraints. It is estimated that millions of students would not have been able to attend the universities of their choice if education loans had not been available. However, not everyone will be eligible for an education loan abroad without collateral, as lenders reject many loan applications. The Credit Guarantee Fund for Education Loans backs the Indian Banks' Association's model education loan programme (CGFEL). You can borrow up to Rs 7.5 lakh under this scheme with no collateral or third-party guarantee. The IBA created the 'Model Education Loan Scheme' to provide financial assistance to deserving students who wish to pursue higher education in India or abroad. For the CGFSEL educational loan scheme, banks generally follow the IBA guidelines. However, they provide loans under the scheme based on their own internal rules. A collateral-free education loan's primary borrower is the student; a parent, spouse, or sibling can be a co-applicant. When you apply for a collateral-free loan, the bank will usually ask for co-applicant information. Banks also require documents from co-applicants, such as salary slips or income tax returns, before approving an education loan. The RBI guidelines do not specify an upper age limit, but some banks may impose one based on their own internal rules and regulations. The loan application requires Indian citizenship, as well as admission to a certified college or university in India or abroad (including NAAC/NBA accredited institutions and programmes) and national importance and centrally funded technical institutions (CFTIs)). The lender will ask for an admission letter from the college/university and the course fee structure for which you have applied for an education loan. Lenders may also request documents such as Class X, XII, and graduation mark sheets. When your loan application is approved, lenders send funds directly to colleges. If you have any further questions just ask me.
Yes, it is possible to obtain a study abroad loan without collateral, though options may vary based on your location and the destination country for your studies. Here are some key points to consider:
Non-Collateral Loans: Some banks and financial institutions offer education loans without requiring collateral, especially for smaller loan amounts. The limit for non-collateral loans can vary but is typically around $20,000 to $40,000. For higher amounts, financial institutions might require a co-applicant like a parent or a guardian who has a steady income.
Government Schemes: Many countries have government-backed student loan programs that do not require collateral. These programs often have favorable terms, such as low interest rates and deferred payment options. It’s worth investigating whether such options exist in your country.
Private Lenders and NBFCs: Non-Banking Financial Companies (NBFCs) and private lenders might offer education loans without collateral. These loans might have higher interest rates compared to government-backed loans, so it’s important to compare the terms and conditions.
International Student Loans: Some loan programs are designed specifically for international students studying in countries like the USA, UK, Canada, etc. These programs sometimes partner with universities and do not always require collateral.
Scholarships and Grants: While not a loan, scholarships and grants can significantly reduce the financial burden of studying abroad. With your strong academic record, you might be eligible for scholarships offered by universities or external organizations.
Creditworthiness and Co-applicant: If you are seeking a loan without collateral, your credit score or that of your co-applicant (if applicable) can be crucial. A good credit history can improve your chances of securing a loan and possibly at better interest rates.
Consult with Experts: It’s advisable to speak with a financial advisor or an education consultant who can provide tailored advice and information about the best available options for financing your studies abroad.