• Education Loans

Education loan with Collateral to Study Abroad

1395 Reads
3 min Read

By:CANAM Group
Updated On:May 01,2024 05:37 PM IST

• Collateral-based loans are important for any Indian student who aims to study abroad.

• Collateral education loans are preferred as they offer a high amount for a longer time at low interest rates.

• Read this blog to learn about collateral education loans, such as their eligibility, required documents, advantages, features, best loan providers and more.

Collateral-based education loan to study abroad.webp

Studying abroad requires a lot of money, which is not easy for any middle-class person; therefore, an aspiring Indian student often takes the help of a collateral education loan to study abroad. Talking about 2024, the price of everything is rising, and foreign education is no different. Therefore, taking an education loan is necessary and a compulsion in many cases.

Read this blog to know what an education loan with collateral is, the importance of a collateral education loan, different types of collateral, features of an education loan with collateral, eligibility criteria and documents required for an education loan, advantages of a collateral education loan, expenses covered under collateral loan, best loan providers in India and more.

What is an Education Loan with Collateral?

Collateral refers to the asset that a borrower needs to pledge to a lender to guarantee an education loan. It allows the lender to give the education loan to the borrower easily. If the borrower defaults, the lender can sell the collateral and get the money back. A collateral can be a tangible asset like a flat or an intangible asset like a government bond.

The most common types of collateral used for study-abroad loans are Fixed deposits, life insurance policies, government securities, gold, investment accounts, bank saving deposits, etc. The interest rates for education loans with collateral are less compared to unsecured loans as the collateral reduces the loan provider’s risk.

Importance of Education Loan with Collateral to Study Abroad

A foreign education loan to study abroad is very important for students to cover expenses such as tuition fee, living expenses, books, travelling expenses, etc. A study loan allows students to study stress-free without worrying about different costs.

Inflation is rising worldwide and so is the cost of studying, making it difficult for a middle-class student to bear all expenses on their own. This pushes the students to look for financial aid options such as bursaries and scholarships. One such option is an education loan, which provides a good amount to cover the expenses and further allows enough time to the student to repay the loan.

Types of Collateral Required to Study Abroad

There are different types of collateral lenders can ask for. The following are the three types of collateral that lenders accept.

Types of collateral for education loans.webp

Features of an Education Loan with Collateral

Now, let's see the features of an education loan with collateral.

• A tangible or intangible asset is required to get an education loan with collateral.

• An education loan with collateral comes with a longer repayment duration.

• The interest rate of collateral education loans for abroad study is generally lower than loans without collateral.

• For collateral loans, proof of parental income is not required.

• Students can avail themselves of tax benefits under Section 80E for secured loans from banks.

• Collateral loans can offer an amount of up to INR 1.5 Cr at lower interest rates.

Eligibility Criteria for Collateral-based Education Loan to Study Abroad

To apply for any education loan, students must fulfil some eligibility criteria, which will vary from lender to lender. Following is the list of standard eligibility criteria students need to fulfil to apply for an education loan to study abroad.

• The applicant must be an Indian citizen.

• The applicant must be over 18 years old.

• The candidate must have a solid academic record.

• The candidate must have been accepted by a foreign university, college, etc.

• The course chosen by the candidate must be technical or professional.

• The applicant must have the collateral papers.

Documents Required for Education Loan with Collateral

Other than eligibility criteria, students must submit the following documents to get collateral education loans for study abroad.

• Complete Application Form

• Passport-size photographs of the applicant

• Photo ID such as driving license, Voter ID card or Aadhar Card

• Residence proof of the applicant

• Academic documents such as mark sheets

• Admission Proof

• Last Six Months Bank Statements

• Income Proof

Advantages of Education Loan with Collateral

A collateral education loan for abroad study comes with a lot of benefits. The following are the advantages of collateral education loans.

Higher Loan Amount	Getting the loan with collateral allows the borrower to get a higher loan amount. This is because the lenders get a sense of security that if the borrower defaults, then they can simply sell the asset and get their money back.
Lower Interest Rates	Students who pledge an asset to a lender can get a lower interest rate on the loan as it reduces the risk of the lender recovering the amount. Students can save a lot on interest by having a lower interest rate.
Higher Chances of Loan Approval	Securing a loan with collateral increases the chances of the borrower getting the loan to study abroad. This is because the collateral assures lenders that they can recover the money.
Longer Repayment Tenure	The loans with collateral provide more time for the borrower to return the money. This allows students to pay the money easily once they have enough funds. This also reduces the burden of paying money while studying, and students can study stress-free.
Flexibility in collateral options	Another benefit of collateral education loans for study abroad is that students can have flexibility in choosing collateral options depending upon the lender. Students can pledge assets such as investments, property or other valuable possessions. The collateral must align with the student’s financial situation and preferences.

Expenses Covered Under Collateral-based Education Loan

Before applying for any collateral education loan for study abroad, students must check the expenses it covers. Following are the various expenses that an overseas education loan covers.

• Flight ticket cost

• Examination fees

• Tuition Fees

• Books

• Health Insurance

• Library Charges

• Study material required during the program

Best Collateral-based Education Loan Providers in India

The following are the various foreign education loans provided in India. Students can compare all of them and then choose the best suitable. Students must remember that loan amount and repayment tenure can vary based on the candidate’s profile, financial history, CIBIL score, etc.

Name of the Bank	Loan Amount	Repayment Tenure (maximum)
HDFC Credila	Over 1 Crore	12 years
Avanse	Minimum 1 lakh (no cap)	15 years
ICICI	2 Crore Maximum	14 Years
Yes Bank	40 Lakh Maximum	15 years

How to Apply for an Education Loan with Collateral in 2024

Applying for a student loan for abroad studies is simple if the student follows the instructions properly. It is to be noted that the applicant must start around 4-6 months before their enrolment date, as the process of getting an education loan may take time. Applicants can follow the steps below to apply for a collateral education loan:

Step 1: First, check the eligibility for an education loan.

Step 2: Contact an expert for details about the application process and guidance regarding the lenders.

Step 3: After choosing the lender, check the document requirements and collect the documents.

Step 4: Now submit all the documents as per the instructions and wait for verification. The verification process usually takes 1-15 days.

Step 5: Once the application gets approved, the applicant can sign the agreement letter and wait for the disbursement of the loan amount.

Step 6: The disbursement will be directly deposited into the student’s account or to the university according to the agreement.

Students do not need to handle all these procedures alone; they can contact experts for guidance. For example, students can contact experts at Canam who can guide them in selecting the best lenders.

Conclusion

A collateral education loan for abroad study in 2024 is something every Indian student aspiring to study abroad searches for. This is because collateral-based loans provide longer repayment tenure and high loan amounts at lower interest rates. However, before choosing the lender, students must remember that there is a difference between private banks, public banks and NBFC, which will reflect in the loan amount, interest rate repayment tenure, etc. Students can get guidance from study abroad consultants regarding foreign education loans, but Canam doesn't provide assistance with education loans.

FAQ

Is collateral required for an education loan abroad?

No, it is not compulsory for every education loan; however, many loan providers ask for collateral.

Which assets are not accepted as collateral?

Immovable assets such as real estate, plots of agricultural land, gram panchayat properties, non-agricultural lands without build-up boundaries and cantonment area property are not accepted as collateral for foreign education loans.

How much collateral is required for an education loan?

There is no exact answer for this as it varies from lender to lender. Students can connect to their preferred lender to discuss the same.

Which bank is best for an abroad education loan?

Every bank has its pros and cons regarding foreign education loans. However, students can prefer banks such as HDFC Credila, ICICI, Yes Bank and Avanse.

How can I get a study loan in India to study abroad?

Students can connect with Canam experts for guidance related to collateral education loans for study abroad.

What type of assets can be used as collateral for foreign education loans?

Students can use various assets for collateral like a house, FD, life insurance, stocks, government bonds etc.

What is the duration of the education loan?

Although it depends from bank to bank, the duration of an education loan is generally 15 years.

What is the processing time for a study abroad loan?

The processing time for study abroad loans varies from lender to lender.

Can I prepay my loan?

Yes, you can prepay your education loan, as many banks have the option of foreclosure. Depending on the bank, you may be levied pre-payment charges.

What are the documents required for a collateral education loan?

The documents required for a collateral education loan are an admission letter, academic transcripts, entrance exam results, residence proof, last 6 months' bank statement, two passport-size photos, etc.

Get great articles direct to your inbox

The latest news, articles, and resources, sent straight to your inbox every month.

Popular Universities to Study Abroad

World class education waiting for you.

University of New South Wales (UNSW) - Paddington Campus

New South Wales, Australia • 13 Programmes

Tuition Fee : AUD 44000-44500 / year

Sprott Shaw College - Richmond College Campus

British Columbia, Canada • 19 Programmes

Tuition Fee : CAD 10000-38000 / year

Fresenius University of Applied Sciences - Hamburg Campus

Hamburg, Germany • 3 Programmes

Tuition Fee : EUR 12240-12240 / year

Kingston University London - Kingston Hill Campus

England, UK • 60 Programmes

Tuition Fee : GBP 13000-16500 / year

INTO Group - Washington State University

Washington, USA • 143 Programmes

Tuition Fee : USD 28000-29000 / year

Pacific Lutheran University

Washington, USA • 42 Programmes

Tuition Fee : USD 0-0 / year

Australian Catholic University (ACU) - Canberra Campus

Australian Capital Territory, Australia • 6 Programmes

Tuition Fee : AUD 0-0 / year

George Brown College - St. James Campus

Ontario, Canada • 93 Programmes

Tuition Fee : CAD 17000-30000 / year

View All Universities

Latest at CANAM

Events, webinar, college / university visits and more.

Dalhousie University Application Week

Study in Canada • Application Days

All Canam Offices, PAN India • 11:00AM

In-Person & Virtual Event

University Visit - Saskatchewan Colleges (MSM)

Study in Canada • University Visit

Sangrur • 12:30PM

In-Person Event

University Visit - NAVITAS , Canada

Study in Canada • University Visit

kochi2 • 12:30PM

In-Person Event

Top countries destinations

Popular university and colleges for Studying abroad.

Bond University Queensland
Central Queensland University - Rockhampton, North Campus Queensland
Charles Sturt University - Wagga Wagga Campus New South Wales
Deakin University - Geelong Waurn Ponds Campus Victoria
Engineering Institute of Technology - Perth campus Western Australia
Griffith University - Nathan Campus Queensland
La Trobe University - Bendigo Campus Victoria
LCI Melbourne - Art & Design School Victoria

Ara Institute of Canterbury - City Campus Southland
Aspire 2 International - Auckland Campus Auckland
Auckland University of Technology - City Campus Auckland
Eastern Institute of Technology - Hawke Bay Campus Hawke's Bay
Manukau Institute of Technology -Manukau Campus Auckland
Massey University - Auckland Campus Auckland
Nelson Marlborough Institute of Technology (NMIT) - Nelson Campus Southland
New Zealand Institute of Business & Technology (NZIBT) Auckland
The University of Waikato - Hamilton Campus Hamilton

Kent state university Ohio
San Jose State University California
Wright State University Ohio
Clark University Massachusetts
Rowan University New Jersey
Arkansas State University Arkansas
University of Wisconsin Milwaukee Wisconsin
Southern Illinois University Edwardsville Illinois
University of Findlay Ohio

Popular English Language Proficiency Exams

Blogs and Articles

Curated content to keep you updated on the latest education trends, news and more.

Summer Intake in Germany 2025

Germany is located in Central Europe and is known for its rich culture, history, strong economy, and high standard of living. Its diverse population h...

Updated on • Jan 14,2025 05:49 PM IST • Study in Germany

IELTS Reading Practice Tests 2025: Reading Passage and Sample Questions

The IELTS or International English Language Testing System exam consists of four modules – Reading, Writing, Speaking and Listening. The IELTS Readi...

Updated on • Jan 14,2025 05:48 PM IST • IELTS

May Intake in Canada 2025

What is May Intake in Canada 2025?Canada May Intake is considered the third most popular study intake in Canada after the September and January...

Updated on • Jan 14,2025 04:09 PM IST • Study in Canada

IELTS Letter Writing Topics 2025

There is a 60-minute time limit for the IELTS Writing test, with 20 minutes allotted for Task 1 and 40 minutes for Task 2. IELTS General Writing Task ...

Updated on • Jan 14,2025 01:44 PM IST • IELTS

February Intake in Australia: Timeline, Courses, Universities, Deadlines & More

Students who desire to study in Australia should consider the February 2025 intake, which is known as the primary intake in Australia for admission, t...

Updated on • Jan 14,2025 10:33 AM IST • Australia

Scholarships to Study in Ireland

Getting scholarships to study in Ireland is no less than an open-eye dream for many of the students out there. What makes getting a scholarship such a...

Updated on • Jan 10,2025 05:28 PM IST • Ireland

Canada IELTS band requirements 2025

Canada's education system is considered the best in the world for international students. Students must fulfil many Canadian Universities' requirement...

Updated on • Jan 10,2025 05:10 PM IST • IELTS

What makes Australia a preferred study destination for Indians?

Australia remains a top choice for Indian students seeking a study-abroad adventure, offering unparalleled advantages. Its blend of quality education,...

Updated on • Jan 10,2025 11:25 AM IST • Australia

PTE Accepted Universities in Australia

In recent years, PTE has emerged as one of the alternatives to IELTS to study abroad. Many top study-abroad destinations like USA, UK and New Zealand ...

Updated on • Jan 10,2025 11:07 AM IST • PTE

Cheapest MBA in UK for International Students

Earning a Master of Business Administration (MBA) can be a game-changer for your career, opening doors to leadership roles and propelling your earning...

Updated on • Jan 09,2025 04:39 PM IST • UK

How to Choose a Study Abroad Destination?

International education is a dream for many students. It not only helps you excel professionally, but also enhances your perception, and evo...

Updated on • Jan 09,2025 04:32 PM IST • Study Abroad

Why Study in Europe?

A quick question for you readers: What's the most important step in studying abroad? *drumrolls* so? Did your answer include anything like choosing a ...

Updated on • Jan 07,2025 05:36 PM IST • Study Abroad

Top Free Education Countries for Indian Students

Education is the right of every individual on earth. It enhances your knowledge, improves economic opportunities, and promotes personal development. A...

Updated on • Jan 06,2025 11:43 AM IST • International Students

September/Fall Intake Canada 2025: Timeline, Universities & Admission Requirements

Studying in Canada after 12th class is the dream of many Indian students. Students with guidance from study abroad consultants apply for different int...

Updated on • Jan 03,2025 05:27 PM IST • Study in Canada

Study in British Columbia

Imagine waking up and starting your day to a breathtaking view of the Pacific Ocean on one side and snow-covered mountains on the other- Yes! That's B...

Updated on • Jan 02,2025 04:35 PM IST • Study in Canada

Exams Required to Study in USA

If you want to study in the USA, you might have to take a few exams depending on your field, and study goals. These exams help US Universities & C...

Updated on • Dec 31,2024 12:44 PM IST • USA

Study in USA After Diploma

Have you completed your diploma and want to expand your education to unlock new opportunities? the USA welcomes you with open arms. It offers many opp...

Updated on • Dec 31,2024 12:39 PM IST • USA

Most Affordable Universities in USA

There are several students across the globe who dream of studying in the USA. The USA is a dream study-abroad destination, and all those who dream abo...

Updated on • Dec 27,2024 03:55 PM IST • USA

Life in Canada as an Indian Student

Canada is one of the most popular study destinations among international students. This is because it is home to world-class universities th...

Updated on • Dec 26,2024 05:50 PM IST • Study in Canada

Summer Intake in USA - Universities, Timelines & More

Are you thinking about starting your academic journey sooner? If yes, studying in the USA can be your masterstroke! It opens doors to world-class educ...

Updated on • Dec 26,2024 12:35 PM IST • USA

Education loan with Collateral to Study Abroad

Table of Contents

What is an Education Loan with Collateral?

Importance of Education Loan with Collateral to Study Abroad

Types of Collateral Required to Study Abroad

Features of an Education Loan with Collateral

Eligibility Criteria for Collateral-based Education Loan to Study Abroad

Documents Required for Education Loan with Collateral

Advantages of Education Loan with Collateral

Expenses Covered Under Collateral-based Education Loan

Best Collateral-based Education Loan Providers in India

How to Apply for an Education Loan with Collateral in 2024

Conclusion

FAQ

Events, webinar, college / university visits and more.

Popular university and colleges for Studying abroad.

Bond University Queensland

Central Queensland University - Rockhampton, North Campus Queensland

Charles Sturt University - Wagga Wagga Campus New South Wales

Deakin University - Geelong Waurn Ponds Campus Victoria

Engineering Institute of Technology - Perth campus Western Australia

Griffith University - Nathan Campus Queensland

La Trobe University - Bendigo Campus Victoria

LCI Melbourne - Art & Design School Victoria

University Canada West British Columbia

University of Windsor Ontario

Dalhousie University Nova Scotia

Carleton University Ontario

Cape Breton University Nova Scotia

University of ottawa Ontario

University of saskatchewan Saskatchewan

University of regina Saskatchewan

University of guelph Ontario

Ara Institute of Canterbury - City Campus Southland

Aspire 2 International - Auckland Campus Auckland

Auckland University of Technology - City Campus Auckland

Eastern Institute of Technology - Hawke Bay Campus Hawke's Bay

Manukau Institute of Technology -Manukau Campus Auckland

Massey University - Auckland Campus Auckland

Nelson Marlborough Institute of Technology (NMIT) - Nelson Campus Southland

New Zealand Institute of Business & Technology (NZIBT) Auckland

The University of Waikato - Hamilton Campus Hamilton

University of Warwick England

De Montfort University England

University of West London England

University of Strathclyde Scotland

Aston University England

University of Bath England

University of Liverpool England

Durham University England

Newcastle University England

Kent state university Ohio

San Jose State University California

Wright State University Ohio

Clark University Massachusetts

Rowan University New Jersey

Arkansas State University Arkansas

University of Wisconsin Milwaukee Wisconsin

Southern Illinois University Edwardsville Illinois

University of Findlay Ohio

Popular English Language Proficiency Exams