Last updated on: February 27, 2026
Yuvika Rathi
College Student
For decades, the equation was brutal: want to study abroad? Either have property to mortgage, or don't go. Indian banks wouldn't touch unsecured education loans above ₹7.5 lakhs. Families sold ancestral land, pledged retirement homes, or watched dreams die for lack of collateral.
That ceiling just shattered. In 2026, public banks such as the State Bank of India and Bank of Baroda give a maximum of INR 50 lakhs unsecured, while private banks such as ICICI, AXIS, IDFC can lend up to 1 CR, and NBFCs such as Avanse and Incred can give up to 1.25 CR without any collateral. But here's what nobody's explaining: the process, the catch, and which bank actually approves your profile.
For Indian studies, most public sector banks can offer up to around ₹7.5 lakh without collateral under standard schemes, often backed by government credit‑guarantee programmes. But for study abroad at premier institutions, the ceiling goes higher.
SBI's Global Ed-Vantage Scheme is the gold standard here. Through the CGFSEL scheme, students can get loans up to ₹7.5 lakh without providing collateral. For higher amounts, SBI offers the Global Ed-Vantage scheme, which allows collateral-free loans up to ₹50 lakh for students admitted to select foreign universities.
Interest Rate: 8.65% (SBI) for top-ranked universities
Eligibility: Admission to QS Top 200 or NIRF-ranked institutions
Processing Time: 15–20 days post-documentation
Bank of Baroda follows similar parameters — ₹50L unsecured for premier institutions, rates ranging from 8.7%–9.15%.
This is where the big unsecured money lives. NBFCs like Avanse, InCred, and MPOWER offer up to ₹1.25 crore without collateral, but with stricter profile requirements.
HDFC Credila: Up to ₹1.25 Cr unsecured | Interest: 10.5%–12% | Approves based on co-applicant income stability
Avanse Financial Services: Up to ₹1.25 Cr | Interest: 11%–13.5% | Accepts students going to 1,800+ partner universities globally
ICICI Bank: Up to ₹1 Cr unsecured | Interest: 11.05%+ | Requires co-applicant with ₹6L+ annual income
The trade-off is clear: collateral‑free education loans usually carry higher interest rates than secured loans because the lender is taking more risk. You're paying 2–4% more annually to avoid pledging your house.
Launched in November 2024, PM-Vidyalaxmi provides collateral free, guarantor free education loans to meritorious students who get admission in the top quality higher educational institutions, made accessible through a simple, transparent, student-friendly and entirely digital application process.
Key Benefits:
How it actually works: The subsidy amount will be credited to PM VIDYALAXMI DIGITAL RUPEE APP (CBDC WALLET) of the beneficiary and on redemption, the amount will be transferred to the beneficiary loan account.
Application: Visit pmvidyalaxmi.co.in, register with Aadhaar, apply to multiple banks through one portal.
KYC Documents: Aadhaar, PAN, or any government-approved ID; Course & Fee Details: Information about your course and total fees; Company Documents (for self-employed parents): Partnership Deed, MOA/AOA, Company Registration Certificate; Financial Statements: Business income details for the last six months.
Missing any of these = automatic rejection. Banks verify every document against your co-applicant's ITR filings.
Processing Fees: 0.5%–2% of loan amount (₹25,000–₹2 lakhs on a ₹1 Cr loan)
Forex Markup: 2%–4% if remitting through a different bank
Pre-closure Penalties: 2%–5% if you repay early (some NBFCs waive this)
If you remit through the same bank that gave the loan, many (SBI, HDFC) waive TCS and reduce forex markups.
| Bank/NBFC | Max Unsecured Amount | Interest Rate (p.a.) | Approval Time | Best For |
| SBI | up to ₹50 Lakhs | 8.65% – 9.15% | 10–15 days | Cost-conscious families & Premier/Tier-1 universities. |
| Bank of Baroda | up to ₹7.5 Lakhs (standard) / Higher for Premier | 8.70% – 10.70% | 12–18 days | Students with strong academic backgrounds in top-tier schools. |
| ICICI Bank | up to ₹1 Crore | 10.25% – 13% | 3–5 days | Fast approvals and students with stable co-applicants. |
| HDFC Credila | up to ₹1 Crore | 10.50% – 12.50% | 3–7 days | High loan amounts and global university coverage. |
| Avanse | up to ₹1.25 Crore | 10.25% – 13.50% | 3–5 days | STEM/MBA students and flexible repayment structures. |
| Prodigy Finance | 100% of Tuition | 11% – 14.5% (USD) | 5–7 days | No Indian co-signer or collateral needed (Post-grad). |
Mistake 1: Applying to just one bank. Compare at least 3–4 offers (public bank, private bank, NBFC, and any government‑linked scheme).
Mistake 2: Ignoring PM-Vidyalaxmi. If your family income is under ₹8 lakhs, you're leaving ₹30,000–₹50,000 annually on the table by not using the 3% interest subsidy.
Mistake 3: Not checking university eligibility. Because these education loans are offered without collateral, banks will consider the income, the character and stability of the parent/guardian, the type of course, and the probability of securing a job to repay the education loan. A degree from a Tier-3 unknown university in Poland won't get approved at SBI's ₹50L unsecured tier — even if you qualify on paper.
Step 1: Check if your university is on SBI's Global Ed-Vantage list or PM-Vidyalaxmi's 860 QHEI institutions.
Step 2: Apply through PM-Vidyalaxmi portal to 3–4 banks simultaneously.
Step 3: If loan amount > ₹50L, approach HDFC Credila or Avanse with co-applicant's last 3 years' ITR and bank statements.
Step 4: Negotiate processing fees — they're almost always waivable for high-value loans.
Education loans in India have exponentially grown by 50% in FY 2023-2024, which shows the increasing demand for education loans. According to official data, public sector banks disbursed approximately INR 26,502 CR compared to the previous INR 17,668 CR. The infrastructure exists. The money exists. What's missing is students knowing exactly how to access it.