Best banks for education loans without collateral — Are you a student or parent seeking educational loans without collateral? Attaining higher education is important for your professional and personal success, but the cost can be quite high and discouraging. This is where educational loans come in handy.
Education loans play a huge role in helping students achieve their educational goals without financial hindrances. There are various banks and other financial bodies offering education loans. However, securing an education loan can be a hassle, especially if you don’t have collateral to offer. Thankfully, this article will guide you through the best banks for education loans without collateral. Read on.
What Are Education Loans?
Before we dive into our list of the best banks for education loans without collateral, let’s discuss what education loans and collateral are. Education loans are regarded as those loans provided by banks and other financial organizations to help students pay for their financial expenses. These loans usually cover educational expenses like tuition fees, books, accommodation costs, and others.
Meanwhile, collateral is an asset given to the lender to serve as a guarantee that the borrower will repay the loan. And if the borrower fails to repay the loan, the lender can claim the collateral. Collateral can include assets like jewelry, property, and more.
Collateral is a crucial aspect of obtaining education loans, it gives the lender security over their money. However, not everyone has some sort of collateral to offer. This has made it difficult for them to obtain an education loan. The application of students who don’t have collateral is usually rejected. Having said that, let’s look at our list of the best banks for education loans without collateral.
Best Banks For Education Loans Without Collateral
Here are some of the best banks for education loans without collateral;
1. State Bank of India (SBI)
The first bank on our list is the State Bank of India (SBI). It is a popular back located in India that offers education loans without collateral. The bank operates using a flexible repayment period that runs for about 15 years. Interestingly, SBI interest rates are quite low compared to other financial organizations and it is even lower for female students.
2. HDFC Bank
HDFC Bank is another bank providing education loans to students without requiring collateral. HDFC Bank has a commendable fast processing time as they release loans within 15 days. Additionally, HDFC Bank also offers students discounted interest rates when they borrow about INR 10 Lakhs and above.
3. Punjab National Bank (PNB)
The Punjab National Bank is a great option for students and parents seeking education loans without collateral. PNB was established in 1894 and has since grown to be the second-largest public sector bank in India. It also has a flexible repayment plan of up to 15 years. The bank’s interest rate starts at 7.5%, which is competitive with other banks.
4. Axis Bank
Axis Bank is a private bank that provides education loans without collateral. And just like the previous banks, Axis Bank has a flexible repayment period of about 15 years. The interest rates start at 10.50% per annum, which is a bit higher than other banks. But they offer attractive and flexible repayment plans. However, female students have access to lower interest rates and there are options wherein your loan application can be processed from your doorstep.
5. ICICI Bank
Another bank on our list of the best banks for education loans without collateral is ICICI Bank. The interest rates at ICICI bank start from 7.45% per year and the repayment period can reach up to 10 years. Additionally, customers with a good credit history are provided with a pre-approved loan facility.
6. Bank of Baroda
Bank of Baroda offers educational loans to students without collateral. The interest rates at this bank start from 7.35% per year and the repayment period can be about 15 years. Additionally, the bank of Baroda has a special education loan program for students interested in studying at premier institutions such as IITs and IIMs.
7. Central bank of India
Next up on our list is the Central bank of India. This bank also offers loans to students without collateral. The repayment period for the loan is within 15 years. The interest rates start at about 7.45% per annum. Additionally, the bank has special consideration for female students and other students struggling with financial burdens.
8. Canara bank
Canara bank is a popular bank that was founded in 1906 in India. Canara bank offers education loans to students without any collateral. The interest rate starts at 7.35% yearly with a repayment period that is up to 15 years. Meanwhile, the bank offers lower interest rates for female students, thereby making it a good option.
9. Union Bank of India
Union Bank of India also offers education loans without collateral for studies in India and abroad. The interest rates start from 7.35% each year. The repayment period for a loan can reach about 15 years. Additionally, the bank also has a special education scheme for students interested in pursuing their IIMs and IITs.
10. Indian Overseas Bank (IOB)
Indian Overseas Bank (IOB) is a prominent bank that was established in 1937. It is one of the top public banks in India. The bank offers education loans without collateral for studies in India and abroad. The interest rate begins from 8.25% each year. Additionally, there is an educational loan scheme for students who want to pursue studies in premier institutions such as IIMs and IITs.
Above are some of the best banks for education loans. However, before obtaining a loan from any of the above banks, it is important to consider their interest rates, repayment conditions, and more. In the subsequent section, we will discuss the factors to consider when choosing a bank for education loans.
Factors To Consider When Choosing A Bank For Education Loans
Here are some factors to help you select the best bank to obtain your education loan;
1. Interest rates and repayment terms
Before obtaining an education loan from a bank, you should consider the interest rates and repayment plans. Some banks have lower interest rates compared to others and offer flexible repayment plans.
2. You should consider the loan amount, tenure, and eligibility criteria
Another factor you should consider is the eligibility criteria, loan amount, and tenure. This will enable you to ascertain if you qualify for the loan. You will also know if the loan amount will be enough to cover your educational expenses.
3. Processing time and fees
Some banks have high processing fees and might take a longer time to process your loan application. Therefore, you should consider the processing time and fees for each bank option, and choose the best fit. You should also consider the documents required for applying for the loan.
4. You should consider the customer service and support
Select a bank that offers excellent customer service and support. Good customer service can help your entire loan application process run seamlessly. For instance, you may encounter questions about your loan and good customer service can solve that.
Getting an education loan without collateral can be challenging, but it is not impossible. Above are the best banks for education loans without collateral you should consider. You should carefully evaluate each bank above and consider factors like interest rates, loan amount, repayment process, and more. This will help you choose the best bank for your education loan. Good luck!
Frequently Asked Questions
What is the interest rate for education loans without collateral?
The interest rate for education loans without collateral differs from bank to bank. This depends majorly on factors like repayment period, loan amount, and the borrower’s credit score.
Can students apply for education loans without collateral for studies abroad?
Yes, students can apply for education loans without presenting any collateral for studies abroad. However, the interest rates might be higher and the loan amount may be limited.
What are the eligibility criteria for education loans without collateral?
The eligibility criteria for education loans without collateral differs depending on the bank. However, it usually includes factors like an academic record, age, nationality, and the course of study. Also, some banks may require applicants to have a certain income level or credit score.
What documents are required to apply for an education loan without collateral?
The document required for applying for education loans without collateral varies depending on the bank, however, it usually includes academic records, proof of identity, proof of address, proof of income, and an admission letter from your school.
Can education loans without collateral be used to cover expenses other than tuition fees, such as study materials or living expenses?
Yes, education loans without collateral can be used for settling other expenses related to education, such as; Living expenses, tuition fees, study materials, and even accommodation. Therefore, it is crucial to check the bank to ascertain what expenses the loan covers.
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