Understanding the Concept of Education Loan Without Collateral

Also known as an unsecured education loan, a non-collateral study loan is a blessing for students looking for financial support when it comes to pursuing their higher education abroad without having to pledge any collateral for availing the loan. This is a type of loan that is given to students for covering their study-related costs abroad, without them having to offer any security against the loan.



These student education loans are provided to applicants based on their eligibility, which can include aspects like their academic performance, achievements, expected earnings, and if they have gotten admission to a recognised international educational institution. This type of loan may involve a slightly higher interest rate as compared to other types of secured education loans, while the amount of money that can be availed under a collateral free education loan will depend on the specific loan provider’s company policies and the credit profile of the loan applicant. Collateral can be both tangible and intangible. Houses or plots come under tangible collateral, while intangible collateral can include a fixed deposit. Here are some of the most common types of collaterals that secured education loans are provided against:

· Non-agricultural land

· Residential properties, including houses or apartments

· Fixed deposits with any registered and trustworthy deposit-taking institution

 

Basic Eligibility Criteria for Non-Collateral Education Loans

The criteria for education loan eligibility may differ from one financial institution to the other. However, there are certain essential criteria that need to be met to for being eligible for the loan that are common across most loan providers. These are:

Eligibility Criteria for Students

· The applicant must be an Indian citizen.

· They should be at least 18 years old.

· A co-borrower with a stable income in India is required.

· Proof of confirmed admission to a recognised institution is necessary before the final loan disbursement.

Eligibility Criteria for Co-Applicants

· Must be an Indian citizen and a close blood relative of the student, such as a parent, sibling, or legal guardian.

· Should hold a bank account in India that allows them to issue cheques.

 

All in all, if you want to pursue higher education abroad, a collateral-free loan can be the perfect choice for you. For some of the best schemes for an education loan without collateral, Avanse Global Finance is the right partner for you.

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