So, if you want to study abroad—like in the USA, UK, or Canada—but don’t have collateral like a house or land, don’t worry! There are now plenty of options in India for education loans without providing any security.
These loans are specifically designed for overseas studies, and by 2025, you can get up to ₹40 lakh or more through schemes like PM-Vidyalaxmi and NBFCs. I did the research and will explain in a simple way how it works, which banks are available, and how you can apply. Let’s get straight to the point!
What is a collateral-free loan?
In simple terms, collateral-free means you don’t have to provide any property, fixed deposit, or shares as security to the bank. The loan is based on your academics, the quality of the course, and your future job prospects. These loans for overseas studies cover tuition, hostel expenses, books, and travel.
But remember, there’s a margin on the loan amount – for example, zero margin up to ₹4 lakh, followed by a 10% margin for foreign travel (you pay this yourself). Interest rates range from 9-12%, and repayment begins one year after the course ends.
Top Options: Which Banks and Schemes Are Offering It?
In 2025, government and private lenders have introduced easy loans for studying abroad. Here are some of the best:
PM-Vidyalaxmi Scheme: The government’s new program offers collateral-free loans for the top 902 institutes (like Harvard and Oxford). Meritorious students don’t need a guarantor. Up to ₹50 lakh, apply fully digitally. EWS families (income < ₹4.5 lakh) can also get an interest subsidy.
SBI Global Ed-Vantage: SBI’s special loan abroad. Up to ₹50 lakh for premier institutes without collateral. Margin 10% for studying abroad, but processing is fast.
Axis Bank Non-Collateral Loan: Up to ₹7.5 lakh without security, for higher studies abroad. Based on academic record and co-applicant income.
NBFCs like HDFC Credila, Avanse, InCred, Auxilo: These are specialized for foreign loans. Up to ₹40 lakh (or more) without collateral. Interest is 10-11%, and approval is based on academics. NBFCs like Propelled offer up to ₹15 lakh.
MPower Financing: US-focused for Indian students, up to $100,000 (₹80 lakh+) without collateral. Based on CGPA and SAT scores, has funded over 20,000 students.
If you want to pursue MBBS abroad, apply with SBI or Axis – they cover it.
Eligibility: Who can apply?
Basic things:
- Indian citizen, between 18-35 years.
- Confirmed admission in a top foreign university (not a premier one like IIMs or IITs, but QS-ranked for foreign universities).
- Minimum 60% marks in 12th/graduation.
- Co-applicant (parents) income ₹4-6 lakh+ per year.
- No bad credit history.
NHFDC scheme for disabled students, up to ₹4 lakh without collateral.
Documents: What will it take to apply?
- Admission letter and course fee details.
- ID proof (Aadhaar, PAN), marksheets.
- Co-applicant’s income proof (salary slips, ITR).
- Passport, visa (if ready).
- Bank statements for the last 6 months.
Apply online, approval takes 7-15 days.
| Features | Description |
|---|---|
| Maximum Loan Amount | ₹7.5 lakh to ₹50 lakh+ (up to ₹1.25 crore with NBFCs) |
| Interest Rate | 9-12% per annum |
| Margin | 0% up to ₹4 lakh, 10% for abroad |
| Repayment Period | 5-15 years (course + 1-year moratorium) |
| Security | None (co-applicant only) |
| Subsidy | Interest subsidy for EWS (PM-Vidyalaxmi) |
| Updates | 6-7 years OS + security (government schemes) |
Pros and Cons
Pros:
- You can fulfill your dream of studying abroad without property.
- Interest subsidy and guarantee fund in government schemes (CGFSEL up to ₹7.5 lakh).
- Fast digital process, approval per academics.
- Loans up to ₹50 lakh+ cover everything from tuition to travel.
- Long repayment, flexible EMIs.
Cons:
- Higher interest rates (10%+), co-applicant with a good income is required.
- Margins must be paid on larger loans.
- Low limits if not a premier institute.
- Processing fee 0.5-1% extra.
Conclusion
Collateral-free education loans for abroad studies are a game-changer, especially with schemes like PM-Vidyalaxmi in 2025. If you’re meritorious and have admission to a top university, start with SBI or NBFCs.
Don’t worry if you don’t have the money – these loans will boost your future! Tell us in the comments: Which country do you want to go to and why? Get information by checking offers on BankBazaar.
