Is It Possible To Get A Personal Loan For Studies Abroad Without A Mortgage?

Personal loans for studies abroad are a popular form of loan to pursue your higher studies. This is especially the case with Indian students. Because of how easy it is to apply for a personal loan, many students choose this option, which is mostly done online. But for students without collateral, there are still personal loans they can apply for to finance their education. While most banks require collateral, there are some banks and other financial institutions that offer personal loans with no mortgage required. This article explores these options and how to prepare your documents to apply for these loans.

What Is A Mortgage Or Collateral? 

To know more about a personal loan for studies abroad without a mortgage, it is important to understand what a mortgage is. A mortgage is an asset that borrowers can keep as security against their loan amount. Mortgages can include a fixed deposit, real estate, gold, agricultural land and so on. Various banks in India provide an overseas study loan without a mortgage up to a certain amount. It has been shown that a personal loan with no mortgage has a higher interest rate and a shorter repayment tenure.

Types Of Personal Loans

Personal Loans With Mortgage Or Collateral

A loan with a mortgage or collateral requires the borrower to pledge assets to obtain and secure their loan. This asset can be in the form of a house, property, jewellery, insurance policies, fixed deposits and more. The mortgage is taken to protect the lender’s money and provides security if the debtor fails to pay back the loan. Often, such loans help the borrower to get a loan at a cheaper interest rate. It should be noted that collateral security is not required for personal loans up to Rs. 4 lakhs. Only when the loan exceeds a certain amount will security and a guarantor be required, and this amount is established by the lender.

Personal Loans Without Mortgage Or Collateral

A personal loan for overseas studies without collateral does not need the debtor to offer assets as security. Borrowers must provide relevant documents and meet applicable standards and eligibility criteria. These standards are set by the bank or lender and must be met to take personal loans without collateral for studying abroad.

Documents Required For A Loan With No Mortgage

The following documents must be submitted to the lender when applying for a loan with no mortgage:

• The loan application form
• Proof of family income (income tax returns, property proof, etc.)
• Standardized test results
• Transcripts of academic work
• Aadhaar card (and/or other KYC documents)
• Birth certificate
• 6-month bank statements
• PAN card
• Acceptance letter from the university or institution
• Declaratory statement

Eligibility Criteria For A Loan With No Mortgage

A personal loan without a mortgage for studies overseas requires applicants to satisfy the following criteria:

• A minimum of 60% in high school is needed to ensure employability
• Income of a financial co-applicant
• Official documents related to the degree program in which the student desires to enrol

Application Process For A Loan With No Mortgage

This is the application process for a loan without a mortgage being offered:

• Research the different lenders and the loans they offer and carefully go through their details including the terms and conditions.
• Choose the best personal loan lender without a mortgage.
• Examine all terms and conditions, such as the moratorium term, payback tenure, education loan interest rate, and so on.
• Go to the official website of the lender you have selected. The online application option makes it easy for people to apply for a personal loan from the comfort of their homes.
• Complete the application form.
• Scan and submit the necessary documents.

Is It Possible To Get A Personal Loan To Study Abroad With No Mortgage?

Public banks like State Bank of India, Bank of Baroda and others provide such loans of up to Rs. 7.5 lakh. Private banks including ICICI Bank, Axis Bank, HDFC and others also offer loans to a certain limit without collateral, sometimes up to Rs. 40 lakh in some cases. Private banks have payback terms of 10 to 12 years and the interest rates are between 10 to 12%.

Other creditors that offer loans include NBFCs such as Incred and Auxilo. These NBFCs provide students with loans without collateral of up to Rs. 40 lakh as well and the interest rate ranges between 10 to 18%.

Some international lenders include Leap Finance and Prodigy Finance. They assist borrowers by providing an education loan without a mortgage. This loan can be up to 80% of the overall cost with interest rates that range from 10% to 16%.

Top Indian Banks Providing Loans With No Mortgage

HDFC Bank

• Up to Rs. 30 lakh for domestic education 
• Up to Rs. 45 lakh for foreign education 
• No collateral is required for loans up to Rs. 7.5 lakh

ICICI Bank

• Up to Rs. 50 lakh for domestic education 
• Up to Rs. 1 crore for foreign education 
• No collateral is required for loans up to Rs. 20 lakhs for undergraduate degrees and Rs. 40 lakhs for postgraduate degrees

Bank of India

• Up to Rs. 10 lakh for domestic education 
• Up to Rs. 20 lakh for foreign education 
• No collateral is required for loans up to Rs. 7.50 lakh

HSBC

• No collateral is required for loans up to Rs. 5 lakh

State Bank of India (SBI)

• Up to Rs. 15 lakh for domestic education 
• Up to Rs. 1.5 crore for foreign education 
• No collateral is required for loans up to Rs. 7.5 lakh.

Punjab and Sind Bank

• Up to Rs. 15 lakh for domestic education 
• Up to Rs. 20 lakh for foreign education 
• No collateral is required for loans up to Rs. 4 lakh

IDBI Bank

• Up to Rs. 20 lakh for domestic education 
• Up to Rs. 20 lakh for foreign education 
• No collateral is required for loans up to Rs. 4 lakh

Conclusion

For students who want to study abroad but lack the finances, securing a loan is one of the most important aspects of their education plans. For the many students who require a loan but do not have any assets to offer as collateral, multiple lenders will provide a loan without any collateral. If the student meets the eligibility criteria, they can apply for a loan and improve their chances by preparing their documentation well and researching all their options. For more articles like this, visit the Piramal Finance website to read more about getting personal loans with no mortgage.