A guide to education loan without collateral for Indian students

Posted by soujanya on January 15th, 2021

Educational loans are great financial aid to students who want to pursue studies in India or abroad. It helps students pursue their dream of studying and achieving admission to a university. Educational loans are mainly of two types – secured and unsecured, i.e. educational loan with collateral and education loan without collateral respectively. 

What is collateral?

Collateral is an immovable property (House, Flat or Land) or any other asset, preferably liquid asset, such as FD, shares, bond etc. that a borrower offers to a financier to secure the loan.

Which banks can you approach for an education loan without collateral?

Incred, Avanse, Auxilo and Credila :

The aforementioned non-banking finance companies (NBFC) provide collateral-free education loans till INR 50 lacs as well. The interest rate of Incred, Avanse, Auxilo and Credila is between 10.5% to 13.5%. Apply here

Prodigy Finance:

This international NBFC does not quote an upper limit for the loan amount that you can avail for an education loan without collateral. It charges an Annual Percentage Rate (APR) and lends in USD. Unfortunately, there are many disadvantages with these International lenders, which every student/ parent must be aware of.

Please note that not all lenders who offer non-collateral education loan can offer you income tax benefits under section 80 (E)

What is the loan procedure for an education loan without collateral?

  1. Fill the online application form

  2. WeMakeScholars provides the list of documents and connects you with the bank's nearest and fastest branch.

  3. After you submit the documents, WeMakeScholars and the bank officials verify it and send it to the processing centre.

  4. Processing officer verifies the application and sanctions the loan.

  5. After the loan is sanctioned, you will be required to sign the documents.

  6. Disbursement agreement is signed and disbursement of loan amount takes place.

 


soujanya

About the Author

soujanya
Joined: December 17th, 2020
Articles Posted: 5

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