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Best Education Loan Without Collateral

Updated on December 22, 2024 , 89318 views

Every year, lakhs of students achieve their dream degrees because funding their dreams has become easier. With banks Offering education loans right from Rs. 50,000 to Rs. 1 crore, students are taking up challenges that were just a dream a few years ago.

One of the major aspects of education loan is security. This is not just for the applicant, but also from the Bank’s end. Banks ask for Collateral, which means that the borrower pledges any asset to seek a loan. This is usually from the bank’s end in order to avoid loss. However, some banks offer loans without collateral for a particular amount.

No Collateral Education Loans from Top Banks

The top 5 banks that offer collateral-free education loans are mentioned below:

You can avail up to Rs. 20 lakhs education loan without collateral.

Bank	Collateral-Free Loan
HDFC Bank	Up to Rs. 7.5 lakhs
State Bank of India (SBI)	Up to Rs. 7.5 lakhs
Punjab and Sind Bank	Up to Rs. 4 lakhs
IDBI Bank	Up to Rs. 4 lakhs
ICICI Bank	Up to Rs. 20 lakhs

1. HDFC Education Loan Without Collateral

HDFC Bank offers an education loan with flexible repayment and at attractive interest rates. Check its features below:

Loan Amount

You can avail loans up to Rs. 20 lakh for education in India and abroad.

Repayment Tenure

The loan repayment tenure is up to 15 years. The repayment period starts after 1 year from the completion of studies or 6 months after getting a job.

EMIs

Flexible EMI repayment option is available with the bank.

Collateral Option

HDFC bank offers collateral-free loan up to Rs. 7.5 lakhs, above this amount the applicant needs to submit a collateral. Various options for collateral are available with the bank like residential property, HDFC bank Fixed Deposit, etc.

Tax Benefit

You can save on Taxes with a rebate on the interest to be paid. This is under the section 80-E of the income tax Act 1961.

Insurance Availability

HDFC provides credit protection from HDFC Life. This will be part of the loan amount you avail from the bank. HDFC Life is HDFC bank’s Life Insurance provider.

Interest Rates

HDFC Education Loan’s interest rate starts at 9.65% p.a. The minimum and maximum rate depend on the bank’s discretion and your requirement along with the profile. irr refers to Internal Rate of Return.

Min IRR	Max IRR	Avg IRR
9.65%	13.25%	11.67%

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2. SBI Student Loan Without Collateral

SBI Student Loan can be applied after the admission in the concerned university has been secured. The interest rate for SBI Education Loan for abroad is one of their best features.

Security

SBI student loan scheme provides maximum security. For loan up to Rs. 7.5 lakh, a parent or a guardian is required as co-borrower. There is no need for any collateral security or a third party guarantee. For a loan above Rs. 7.5 lakh, a parent or a guardian is required along with tangible collateral security.

Loan Repayment

The loan repayment period is up to 15 years after the completion of the course period. The period for repaying will start after one year of the completion of the course. If you have also applied for a second loan later, the combined loan amount can be repaid in 15 years after completing the second course.

Margin

There is no margin for a loan up to Rs. 4 lakhs. A 5% margin is applied to loans above Rs. 4 lakhs for studies in India and 15% is applied for students applying to study abroad.

EMI Payment

The EMI for the loan will be based on the accrued interest during the moratorium period and course period, which will be added to the principal amount.

Loan Amount

If you are looking to pursue studies in India, you can avail Loan up to Rs. 30 lakh for medical courses and Rs. 10 lakh for other courses. The higher loan limit will be considered based on case to case Basis. The maximum loan available will be Rs. 50 lakh.

If you are looking to pursue further education abroad, you can avail loan from Rs. 7.5 lakh to Rs. 1.50 crores. The higher loan limit for studying overseas will be considered under Global Ed-vantage Scheme.

Interest Rates

SBI Student loans provide flexible interest rates.

It starts at 7.30% p.a.

Loan Limit	3 Year MCLR	Spread	Effective Interest Rate	Rate Type
Up to Rs 7.5 lakhs	7.30%	2.00%	9.30%	Fixed
Above Rs. 7.5 lakhs	7.30%	2.00%	9.30%	Fixed

3. Punjab and Sind Bank Education Loan

Punjab and Sind Bank offer good interest rates along with collateral-free loans. The features are mentioned below:

Loan Amount

You can avail up to Rs. 10 lakhs for studies in India and up to Rs. 20 lakhs for studies abroad. The bank may offer a higher quantum of the loan based on the course.

Margin

The margin for loans up to Rs. 4 lakh are nil and above Rs. 4 lakh is 5% for studies in India and 15% for studies abroad.

Security

No collateral is required for loans up to Rs. 4 lakh.

Interest Rates

The base interest rate for an education loan is 9.70% p.a, and BPLR is 14%. MCLR refers to Marginal cost of funds-based lending rate.

Tenor	Rate of Interest (% p.a.)
Overnight MCLR	7.10
One Month MCLR (More than overnight upto 1 month)	7.45
Three Month MCLR (More than 1 Month and upto 3 Months)	7.55
Six Month MCLR (More than 3 Months and upto 6 Months)	7.70
One Year MCLR (More than 6 Months and upto 1 Year)	7.80

4. IDBI Bank Education Loan

The IDBI bank education loan for non-vocational courses is a good loan opt for. The rate of interest is minimal and the loan amount offering is good.

Loan Amount

IDBI Education loan offers up to Rs. 20 lakh for further education in India and up to Rs. 30 lakh for education abroad.

Security

There is no need for collateral guarantee up to Rs. 4 lakh. For loan amount above Rs. 4 lakh, the tangible collateral guarantee will be required.

Loan Repayment Tenure

The loan can be repaid in 15 years after the completion of the moratorium period. The moratorium period starts after the completion of the course + 1 year.

Interest Rate

The interest rate for an education loan with IDBI bank starts at 9.00% p.a.

Loan Amount	Interest Rate
Up to Rs.7.5 lakhs	9.00%
Above Rs. 7.5 lakhs	9.50%

5. ICICI Bank Education Loan

One of the major benefits of the ICICI Bank Education Loan without collateral is the fact that you can save Income tax u/s 80E on interest paid.

Loan Amount

You can avail loan of up to Rs. 1 crore for studies overseas and a loan up to Rs. 50 lakhs if you wish to pursue an education in India.

Margin

There is no margin money required for loans up to Rs. 20 lakh. For loans above Rs. 20 lakh, the margin ranges from 5%- 15%.

Collateral Requirement

The requirement for collateral will be based on the institute as per the bank’s discretion. Collateral free loans are available for select institutes for up to Rs. 20 lakh for Undergraduate courses and up to Rs. 40 lakh for Post-graduate courses.

Loan Tenure

For students pursuing undergraduate education within India and abroad, the loan tenure with collateral is up to 7 years post the completion of the course with an extra 6 months.

For students pursuing post-graduation in India and abroad, the loan tenure with collateral is up to 10 years post the completion of the course with an extra 6 months.

Interest Rates

Type	Interest Rate
UG- Domestic and International	Starting at 11.75% per annum
PG- Domestic and International	Starting at 11.75% per annum

Conclusion

Collateral-free loans offer the benefit of reduced stress levels. Get your own collateral-free education loan today and enjoy living your dream. Read all the loan-related documents carefully before applying.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.