Families who want their children to pursue higher studies and are unable to make ends meet are on the lookout for an education loan without collateral in India.
It is no longer easy to secure an education loan as students have to meet a strict set of criteria to become eligible for the loan. Most loan applications get rejected midway in the absence of a collateral or third-party guarantee.
Education is a blessing that can break the shackles of poverty, but how to get a loan when you do not have any property, fixed deposits, land, bonds, insurance policies, or shares to pledge as collateral is a worry for most of the middle-class households in India.
In most cases, financial institutions or private moneylenders ask for collateral as a security pledge in case of loan default so that they can recover their money in adverse conditions by selling the collateral property.
Without the collateral, most banks, NBFCs, or even private lenders hesitate to sanction an education loan with a limit that exceeds INR 7.5 lakhs as the chance of default is very high.
What is a Non-Collateral or an Education Loan without Collateral?
Non-collateral or an education loan without collateral is a type of education loan where the loan applicant can get the loan amount without pledging security against it.
In the case of a non-collateral loan, the borrower has to meet specific criteria that the loan authority has set. These criteria can be country-specific, a particular study program, or a minimum loan amount
Where can you get an Education Loan without collateral?
1. Banks
Banks generally follow the guidelines set by IBA for education loans without collateral, although their internal rules may vary with the set criteria.
It is the sole right of a banking institution to make changes for a loan amount that exceeds INR 7.5 Lakhs. The interest rates, the upper limit of the maximum loan amount, and repayment terms vary from bank to bank.
Edufund is also associated with public and private banks and NBFCs in India and can help you get the best possible terms for the education loan without collateral if you are interested in borrowing money from a specific bank. The app also has a team of dedicated experts who will talk on your behalf and bargain for the best loan terms.
Starting the loan process at EduFund is very straightforward, as you can get direct quotes from partner institutions. Higher loan amounts, lower interest rates, and hassle-free loan process are possible only at Edufund.
4. Private Lenders and Non-Banking Financial Companies
Private lenders and NBFCs generally sanction education loans without collateral for an amount that exceeds INR 7.5 lakhs.
This is a tricky situation for the borrower as these types of education loans come with a higher interest rate compared to the collateral-free education loan of a maximum amount of INR 7.5 lakhs.
5. Education loan without collateral at EduFund App
Conclusion
Education loan is the need of the hour, and if you can get an education loan without collateral in India, then it is a win-win situation for a student who needs the loan amount to fulfill his dreams.
Student loans serve as important financial aid for millions of students who otherwise would not be able to get a proper education and desired jobs.
