• Education Loans

Education loan with Collateral to Study Abroad

2180 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.

Australian Catholic University (ACU) - North Sydney Campus

New South Wales, Australia • 57 Programmes

Tuition Fee : AUD 26000-44000 / year

OIEG Group- Mercy University - Manhattan Campus

New York, USA • 16 Programmes

Tuition Fee : USD 22000-23000 / year

Centennial College - Morningside Campus

Ontario, Canada • 33 Programmes

Tuition Fee : CAD 15500-29000 / year

California Lutheran University - Thousand Oaks Campus

California, USA • 56 Programmes

Tuition Fee : USD 45500-45500 / year

Cambrian College - Toronto Campus

Ontario, Canada • 3 Programmes

Tuition Fee : CAD 17000-19000 / year

University of the Cumberlands

Kentucky, USA • 14 Programmes

Tuition Fee : USD 18000-19000 / year

University of Nottingham - University Park Campus

England, UK • 284 Programmes

Tuition Fee : GBP 20000-27000 / year

Texila American University

Guyana, USA • 2 Programmes

Tuition Fee : USD 0-0 / year

View All Universities

Latest at CANAM

Events, webinar, college / university visits and more.

University Visit - Northern Lights College

Study in Canada • University Visit

Moga • 12:30PM

In-Person Event

University Visit - St. Lawrence College

Study in Canada • University Visit

Kolkata • 03:00PM

In-Person Event

University Visit - NAVITAS , Canada

Study in Canada • University Visit

Jalandhar • 01:00PM

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.

Part-Time Jobs for International Students in Australia

One of the most asked questions by our Indian students is about the part-time jobs for international students in Australia. Indeed, a part-time job pl...

Updated on • Jul 15,2025 11:45 AM IST • Australia

STEM MBA in USA

STEM MBA may be an odd-sounding combination of courses, but it is fulfilling if pursued. The perfect blend of science and commerce adds to this progra...

Updated on • Jul 12,2025 04:02 PM IST • USA

Highest Paying Jobs in India

Indian parents expect their children to follow a set pattern of going to school, getting into a college and finally pursuing a job. But what are the h...

Updated on • Jul 11,2025 11:32 AM IST • Education

CPT vs OPT: Meaning, Difference, and How to Apply

The USA has always been a popular study destination among international students for its wide variety of courses and post-study work opportuniti...

Updated on • Jul 11,2025 10:40 AM IST • USA

Masters in Computer Science in UK: Top Colleges, Eligibility, Scholarships

The UK is an excellent choice to study a Masters in Computer Science. It is a home to world-renowned institutions offering a high standard of educatio...

Updated on • Jul 10,2025 11:29 AM IST • study in the UK

Highest Paying Jobs in the World

With super-advanced technologies like AI entering every field, the assumptions are high that the job roles that exist today won't exist after some yea...

Updated on • Jul 08,2025 01:40 PM IST • Study Abroad

MBA in Australia for Indian Students: Best Universities, Requirements, Scholarship, Courses, Jobs

Master of Business Administration (MBA) has always been a popular postgraduate degree for Indian students to pursue in order to gain advanced sk...

Updated on • Jul 08,2025 01:35 PM IST • Australia

Canada vs Australia: Which Country is Better for Indian Students in 2025?

Human life is filled with making choices every day. In 10th grade, we choose between arts and commerce, after 12th grade, the college, but those were ...

Updated on • Jul 07,2025 12:46 PM IST • Education

France vs Germany: Which Is Better for International Students?

In 2024, many vintage study destinations, including the Big 4, saw a drop in international enrolment, and this trend continues till this year. This le...

Updated on • Jun 30,2025 05:15 PM IST • Education

Top 10 Agricultural Universities in USA

Agriculture or farming is not merely the growing of crops or taking care of animals, but it’s the largest contributor (27%) to global employment. It...

Updated on • Jun 27,2025 05:25 PM IST • USA

Most In-Demand Future Careers in 2025

The world of work is changing faster than ever. Technology, climate change, aging populations, and space exploration are creating jobs we’ve never s...

Updated on • Jun 26,2025 04:41 PM IST • Education

How Much Do Nurses Make in the U.S.?

Do you also think, “How much is the salary of a nurse in the USA?”. If yes, then you are not alone. Being one of the noblest professions in the wo...

Updated on • Jun 23,2025 03:59 PM IST • USA

Study MBBS in the USA

There are innumerable professions, but a career in MBBS is respected and admired more than any other line of work. Many of us harbour a drea...

Updated on • Jun 21,2025 02:00 PM IST • USA

MBA in UK: Universities, Eligibility, Types, and Career Opportunities

Master of Business Administration from UK is a prestigious academic degree, especially when gained from the UK. Business schools in the UK are well kn...

Updated on • Jun 19,2025 04:09 PM IST • UK • study in the UK

Scholarships in France for Indian Students

Are you planning to study in France but are scared of the expensive tuition fees? But now there is no need to fear because you can take advantage of F...

Updated on • May 29,2025 05:22 PM IST • France

Intakes in Dubai for Indian Students

World-class universities, a multicultural environment and tax-free earnings are some of the benefits that attract Indian students to Dubai. However, i...

Updated on • May 27,2025 03:34 PM IST • Study in Dubai

France Student Visa 2025 – Requirements, Fees, Checklist & Application Process

Imagine this: Today is the day you will sit for your dream job interview. You practised all possible questions, wore formal attire, and collected all ...

Updated on • May 23,2025 03:36 PM IST • France

MBA in France for Indian Students in 2025

MBA is one of the most sought-after master’s programs worldwide. France is increasingly becoming popular as an overseas education destination. The r...

Updated on • May 22,2025 05:35 PM IST • France

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 • May 22,2025 05:31 PM IST • PTE

PTE Accepting Universities In USA

PTE stands among the most popular English language proficiency exams accepted by various institutions worldwide. Students applying to study in the USA...

Updated on • May 22,2025 05:24 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