Collateral-Free Education Loan: Nowadays, the cost of pursuing studies in fields like medicine and engineering has become quite high. For middle-class families, funding such education can feel like an immense challenge. Consequently, people often opt for education loans.
These loans help middle-class families finance their children’s education without pledging any assets as security. Many banks offer collateral-free education loans to eligible students. However, the loan amount varies for each student, depending on factors such as the course, the college, the location of study (domestic or abroad), and the bank’s specific terms and conditions.
SBI Offers Collateral-Free Education Loans
SBI offers various education loan schemes for students. Generally, the bank provides education loans of up to ₹7.5 lakh without requiring any guarantee. However, if a student secures admission to a prestigious or premier institute, the loan limit can be significantly higher. Special education loan facilities may be available for students enrolling in institutions like IITs, IIMs, and other top-tier colleges.
BoB Also Offers Guarantee-Free Loans
Bank of Baroda (BoB) also offers collateral-free loans. The bank grants loans without requiring any asset pledge to students admitted to specific institutions and eligible courses. The loan amount and terms are determined based on the student’s institution, course, and profile. Therefore, before applying, it is advisable to check with the bank whether your college and course qualify for a collateral-free loan.
ICICI Bank Offers Guarantee-Free Loans
ICICI Bank offers higher education loans both in India and abroad. In certain cases, students can obtain education loans of up to ₹20 lakh without a guarantee or the need to pledge assets. However, the actual loan amount depends on your profile, the institution, the course, and the bank’s approval.
Canara Bank’s impressive scheme
It is worth noting that Canara Bank’s ‘Vidya Turant’ scheme is proving beneficial for students studying at select institutions. Under this special scheme, eligible students can avail of an education loan without providing any collateral. The bank offers education loans ranging from ₹40 lakh to ₹50 lakh. However, the bank has clarified that not every student will be granted a loan without a guarantee.
Find out how much loan you can get.
There is no fixed limit for loans granted without a guarantee. Generally, under government bank schemes, one can obtain up to ₹7.5 lakh without collateral. However, for premier institutions like IITs and IIMs, or under specific bank schemes, the loan limit can be significantly higher. Therefore, do not base your decision to take an education loan solely on the standard limit; the college where you are securing admission might offer benefits under a specific bank scheme.
Know the documents required to avail the loan.
If you are planning to take an education loan, you will need documents such as the student’s identity card, Aadhaar card, PAN card, admission letter, fee structure of the college or institute, proof of previous academic qualifications, income certificate of parents (as co-applicants), and any other documents requested by the bank. The bank also evaluates the applicant’s credit profile and details regarding the course.