I’m planning to take an education loan for higher studies, but I don’t have any property or assets to offer as security. I’ve heard that some banks give loans without collateral is that actually true, and if yes, what are the limits, and which banks or schemes offer it?
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Yes, you can get an education loan without collateral in India—but it comes with some limits and conditions.
- Loan Amount Without Collateral:
Most public sector banks like SBI, Bank of Baroda, Canara Bank, etc., offer up to ₹7.5 lakhs without asking for any collateral. This applies mostly to Indian institutions and government-recognized courses. - For Abroad Studies:
If you’re planning to study abroad, you may still get an unsecured loan of up to ₹20–25 lakhs from private lenders or NBFCs like HDFC Credila, Avanse, InCred, or Auxilo, but interest rates are usually higher than with collateral-based loans. - CGFSEL Scheme (No Collateral Required):
Public banks follow the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) under the Vidya Lakshmi platform, which allows loans up to ₹7.5L without security, backed by government guarantee.
Eligibility Factors:
Approval depends on your academic record, entrance scores, co-applicant’s income (usually a parent), and the institution’s reputation. Lenders take these very seriously for unsecured loans.