Best Government Banks For Abroad Education Loans without Collateral – Checkout the list of Government banks which are offering Foreign education loan without collateral or security free of mortgages, To get an abroad Education Loan, you generally have to pledge security such as house property, fixed deposits, shares, bond, etc. This is done so that in case you default on the loan, banks can recover it by selling the mortgaged security. The security offered against a loan is termed as collateral.
However, you can get an education loan without mortgaging any security. The Credit Guarantee Fund for Education Loans (CGFEL) Scheme provides a guarantee for education loan dispersed by banks under the IBA Model Education Loan Scheme of Indian Banks’ Association (IBA). Under this scheme, you can get a collateral-free Education Loan amount for up to Rs 7.5 lakh without providing any third-party guarantee.
There is no margin requirement if you apply for a loan within this limit through a scheduled commercial bank under the CGFSEL scheme. It means that the bank can finance up to 100 percent of the loan, if the loan is up to the limit of Rs 7.5 lakh. Under the CGFEL scheme you can get a loan up to Rs 10 lakh for study in India and up to Rs 20 lakh for studying abroad. But, if you take a loan of more than Rs 7.5 lakh, the bank may ask for collateral for the loan amount. The bank may also ask you to deposit margin money and seek third-party guarantee.
Banks generally ask for co-applicant details when you apply for a collateral free loan with income documents such as salary slips or income-tax returns (ITR) of the co-applicant before sanctioning the education loan. The bank may ask you to deposit margin money and seek third-party guarantee in some cases.
Do all banks provide collateral-free education loan benefit?
IBA has formulated the ‘Model Education Loan Scheme’ to financially support meritorious students for pursuing higher education in India and abroad. The guidelines issued by IBA for the CGFSEL educational loan scheme is generally followed by banks. However, the banks may vary in providing loans under the scheme as per their own internal rules. Many banks do provide collateral-free loan option to students looking to pursue higher education from premier institutes in India or Abroad up to certain limit.
However, it’s the bank’s sole discretion to waive off third-party guarantee or tangible collateral security requirement. For loan up to Rs 4 lakh, lenders only require parents/guardians as joint borrower(s). But, lenders can ask for suitable third-party guarantee for loan amount in the range of Rs 4 lakh to Rs 7.5 lakh, besides having parents/guardian as a joint borrower. However, You will be required to provide tangible collateral security if the loan amount is more than Rs 7.5 lakh, along with the assignment of future income of the student for payment of instalments. Checkout the best of Abroad Education Loans without Collateral by different banks in India.
Can you get a collateral-free loan above Rs 7.5 lakh?
However, if your education loan requirement is more than Rs 7.5 lakh or even more than Rs 10 lakh, you can reach out to other lenders to get a collateral-free loan. Non-banking financial companies (NBFCs) and private lenders can provide you collateral-free loans for a higher amount, but these collateral-free loans are sanctioned at a slightly higher interest rate as compared to education loan taken with collateral.
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How To Apply an Abroad Education Loan ?
- For a collateral-free education loan, student is the main borrower and parent, spouse or sibling can be the co-applicant.,
- Co-applicant details if you apply for a collateral free loan.
- Income documents such as salary slips or income-tax returns (ITR) of the co-applicant before sanctioning the education loan.
- There are no restrictions on the upper age limit, but some banks may have it as per their own internal rules and regulations.
- To apply for the loan, you should be an Indian citizen, having secured an admission into a college/university recognized by a competent authority (NAAC/NBA accredited Institutions/programmes or Institutions of National Importance or Central Funded Technical Institutions (CFTIs)) in India or abroad.
- The lender will ask for the admission letter of the college/university with the fee structure of the course for which you have applied for the education loan.
- Apart from this, lenders may also require documents such as Class X, XII and graduation (if applicable) mark sheets.
- When your loan application is accepted by the lender, then the lender disburses the amount directly to the college as per the given fees structure.
Education Loan Under CGFSEL Scheme
- All students taking education loan under the CGFSEL educational loan scheme also get one-year moratorium for repayment after completion of studies.
- Basically, lenders can give a relaxation of about one-year time to start re-paying the loan after you complete your education.
- Tax deduction benefit under Section 80E of Income Tax Act for interest paid on education loans is available only when you have taken the loan from a financial institution operating under the Banking Regulation Act, 1949 or an eligible trust/institution as per the prescribed rule.
- For a collateral-free loan of more than Rs 7.5 lakh from non-qualified institutions, you may miss out on the tax deduction benefit under Section 80E of the Income Tax Act.
- Generally, repayment period of education loan is 15 years. However, you should try to repay the loan amount at the earliest as tax-saving deduction benefit is available for up to 8 years only.
Best Government Bank for Abroad Education Loans without Collateral
Checkout the best of the government banks are offering Abroad Education Loans without Collateral at cheaper Rate of Interest.
1. State Bank of India Education Loan
| Bank Name | State Bank of India, SBI |
| Interest rates | 8.80% for females (RLLR Based)
9.30% for males |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India and abroad- 12 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
2. Punjab National Bank Education Loan
| Bank Name | Punjab National Bank, PNB |
| Interest rates | Loans upto ? 7,50,000-10.90% for females
11.40 % for males Loans above ? 7,50,000- 10.65% for females 11.15 % for males |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India and abroad- 15 years |
| Collateral security | For loans upto ? 4,00,000-In India and abroad- Collateral not required
For loans upto ? 7,50,000- In India and abroad- Collateral required For loans above ? 7,50,000-In India and abroad-Collateral not required |
3. Bank of Baroda Education Loan
| Bank Name | Bank of Baroda, BOB |
| Interest rates | Prime Universities- 7.75% for Females 8.25% for Males Non-Prime Universities- 8.50% for Females 9.0% for Males |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 10% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India and abroad- 15 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
4. Canara Bank Education Loan
Canara Bank Abroad Education Loans without Collateral along with rate of Interest and Amount.
| Bank Name | Canara Bank |
| Interest rates | Loans upto ? 7,50,000-8.90%
Loans above ? 7,50,000- 8.50% |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 85% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India- 15 years; In abroad- 85 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
5. Union Bank of India Education Loan
Union Bank of India Abroad Education Loans without Collateral along with rate of Interest and Amount.
| Bank Name | Canara Bank |
| Interest rates | Loans upto ? 4,00,000- In India- 8.80 % (for females and males) In abroad- 8.55 % for males, 8.05% for femalesLoans ? 4,00,000 – ? 7,50,000 In India- 8.80 % (for females and males) In abroad- 8.55 % for males, for – 8.05% for femalesLoans upto ? 7,50,000- In India- 8.90 % for males, 8.40% for females |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India- 15 years; In abroad- 15 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
6. Bank of India Education Loan
| Bank Name | Bank of India, BOI |
| Interest rates | Loans upto ? 7,50,000-9.05% (females
and males) Loans above ? 7,50,000- 9.85% (females and males) |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India and abroad- 15 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
7. Indian Bank Education Loan
| Bank Name | Indian Bank |
| Interest rates | Loans upto ? 7,50,000- In India and abroad- 7.15 % – 8.15%
Loans above ? 7,50,000- In India and abroad- 7.15 % – 8.15% |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad- 7 years
Loans above ? 7,50,000- In India and abroad- 7 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
8. Central Bank of India Education Loan
| Bank Name | Central Bank of India, CBI |
| Interest rates | Loans upto ? 7,50,000-8.50% for females
9.00 % for males Loans above ? 7,50,000- In India, 8.50% for females 9.00 % for males, In Abroad, 9.00 % for females 9.00 % for males |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad- 10 years
Loans above ? 7,50,000- In India and abroad- 15 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
9. Indian Overseas Bank Education Loan
| Bank Name | Indian Overseas Bank, IOB |
| Interest rates | Loans upto ? 7,50,000-10.65% (females and males)
Loans above ? 7,50,000- 11.65% (females and males) |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-7 years
Loans above ? 7,50,000- In India and abroad- 7 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
10. UCO Bank Education Loan
| Bank Name | UCO Bank |
| Interest rates | Loans upto ? 7,50,000-9.30% (females and males)
Loans above ? 7,50,000- 9.70% (females and males) |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-10 years
Loans above ? 7,50,000- In India and abroad-15 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
11. Bank of Maharashtra Education Loan
| Bank Name | Bank of Maharashtra, BOM |
| Interest rates | Loans upto ? 7,50,000-8.90% (females and males)
Loans above ? 7,50,000- 8.55% (females and males) |
| Margin requirement | Loans upto ? 4,00,000- In India and abroad- 0%
Loans above ? 4,00,000- In India- 5%; In abroad- 15% |
| Maximum tenure | Loans upto ? 7,50,000- In India and abroad-7 years
Loans above ? 7,50,000- In India and abroad-7 years |
| Collateral security | For loans upto ? 7,50,000-In India and abroad- Collateral not required
For Loans above ? 7,50,000-In India and abroad-Collateral required |
Note: ROI is based on RLLR, which is subject to change.
Benefits of taking Education Loan from Government Banks
- Low interest rates
- Education loan Subsidy by various organizations
- Larger repayment terms for education loan
- Flexible Education Loan Eligibility Criteria
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