Introduction
When planning to study abroad, one of the biggest decisions you'll make is whether to go for a secured (collateral-based) or unsecured (non-collateral) education loan. Each option has its pros and cons—and the right choice depends on your financial situation, the course you're applying for, and how quickly you need the funds. In this blog, we break it down so you can make an informed decision that supports your study abroad dream.
What is a Collateral-Based (Secured) Education Loan?
A secured education loan requires you to pledge collateral—such as property, fixed deposits, or insurance policies. In return, you may get:
Lower interest rates
Higher loan amounts (up to ₹2 crore or more)
Longer repayment tenure (up to 15 years)
Popular Lenders for Secured Loans:
SBI Global Ed-Vantage Scheme
Bank of Baroda Scholar Loan
HDFC Credila (case-based)
What is a Non-Collateral (Unsecured) Education Loan?
A non-collateral loan does not require you to pledge any asset. However, lenders may evaluate:
Your academic profile
University ranking
Co-applicant’s income and credit score
Popular Lenders for Unsecured Loans:
InCred
Avanse
Auxilo
ICICI Bank (case-based)
Prodigy Finance (no co-signer required)
Comparison Table: Collateral vs Non-Collateral Loans
Feature | Collateral Loan | Non-Collateral Loan |
Collateral Required | Yes | No |
Interest Rate | Lower (8.5% - 11%) | Higher (11% - 14.5%) |
Loan Amount | Up to ₹2 crore+ | Usually up to ₹50L-₹70L |
Processing Time | 10–15 working days | 4–7 working days |
Documentation | Heavy (legal, property docs) | Lighter (financial & academic) |
Flexibility | Less (requires asset pledge) | More (fast approvals, less risk) |
When Should You Choose a Collateral Loan?
You have assets and want a lower interest rate
Your course duration or tuition fees are high
You want a longer repayment timeline
When Should You Choose a Non-Collateral Loan?
You don’t have property or FD to pledge
You need funds urgently
Your university has a strong global ranking
How GetStudyLoan.com Helps You Choose
Finding the right education loan doesn’t have to be complicated. With GetStudyLoan.com, you can:
Compare both collateral and non-collateral loan offers instantly
Apply once and get multiple quotes
Filter results based on university, loan amount, and interest rate
Get expert advice on choosing the right option
Built by Nikshala, trusted by 22,000+ students in 2024
Final Thoughts
There is no one-size-fits-all answer when it comes to education loans. But with the right guidance and tools, you can confidently pick the loan that suits your goals, resources, and timeline.
Head over to www.getstudyloan.com to compare collateral and non-collateral loan options for 2025 and apply online today!