Education Loan in USA for Indian Students
Today we will talking about Education Loan in USA. the USA is ranked 10th among countries with the highest cost of living out of 193 in the globe. With a total yearly cost of $36,564, it is also the third-most costly study-abroad location. A sizeable number of Indian students come annually to the United States to further their Education loans in USA despite the rising costs. Yet why? The answer is yes since it has top-notch academics and offers student loans for studies in the USA.
With an Education Loan in USA for Indian students, you may still take advantage of the country’s flexible academic structure, cultural variety, worldwide renown, unique curriculum, and lucrative job/internship chances even if you don’t have a lot of money.
Let’s carefully examine international student loans in the USA and make plans for your study abroad adventure.
How to Finance Study in USA?
Is it simple to obtain a student loan in the USA? No. Due to their visa status, it may be extremely difficult for Indian students to get loans from conventional banks. In addition, the loan application procedure in the USA could appear insurmountable given your lack of credit history, citizenship, and co-signer.
Yet, there is always a way out. In this scenario, obtaining an Education Loan in USA in the United States for foreign students involves choosing an appropriate financing provider. The alternatives for obtaining student loans for international students in the USA are listed below.
- Indian banks like SBI, HDFC, AXIS, PNB, and others.
- Financial services in India like Avance Financials, Leap Finance, etc.
- US banks and lenders like Discover, Citizen Bank, Wells Fargo, etc.
Banks Providers for Study Loan in USA
These research loan in the USA providers’ loan terms, interest rate, moratorium time, and collateral security status are as follows:
|Lender’s Name||Offered Parameters|
|HDFC Bank, India||Loan Amount: upto INR 20 LakhsInterest Rate: 9.55% to 13.25%Collateral Security: FlexibleMoratorium Period: For selected coursesRepayment Period: upto 14 years|
|State Bank of India||Loan Amount: INR 30 lakhsInterest Rate: upto 2% on the current base rate of SBICollateral Security: From loans above INR 7.5 lakhsMoratorium Period: Course completion + 1 year, or 6 months after getting jobRepayment Period: 1-15 years|
|Axis Bank, India||Loan Amount: INR 20 lakhsInterest Rate: 16.5% to 17.5%, special rates for womenCollateral Security: From loans above INR 7.5 lakhsMoratorium Period: 6-12 monthsRepayment Period: 5-15 years|
|Punjab National Bank, India||Loan amount: As per requirementInterest Rate: Base rate for pursuing Education Loan in USA at top 100 universities in worldCollateral security: FlexibleMoratorium Period: 1 yearRepayment Period: 15 years|
|Bank of Baroda, India||Loan amount: INR 20 lakhsInterest Rate: 7.75% to 8.9%Collateral security: Tangible above INR 7.5 lakhsMoratorium Period: Course duration + 1 yearRepayment Period: upto 10 years for loans below INR 7.5 lakh and 15 years for above|
|Canara Bank, India||Loan amount: INR 20 lakhsInterest Rate: 7.80% to 9.40%Collateral Security: From loans above INR 7.5 lakhsMoratorium Period: 6-12 monthsRepayment Period: 15 years|
|IDBI Bank, India||Loan amount: INR 20 lakhsInterest Rate: 8.40% to 8.75%Collateral Security: From loans above INR 7.5 lakhsMoratorium Period: 1 yearRepayment Period: 15 years|
|Avance Financial Services, India||Loan amount: CustomizableInterest Rate: 13.15%Collateral Security: FlexibleMoratorium Period: 6 months after course, 3 months after jobRepayment Period: Flexible|
|Discover, USA||Loan amount: Based on GPAInterest Rate: 2.99% to 13.99%Repayment Period: Flexible|
|Wells Fargo, USA||Loan amount: 100% costInterest Rate: 3.21% to 6.76%Moratorium Period: 6 monthsRepayment Period: 5-20 years|
|LeapFinance, India||Loan amount: 100% costInterest Rate: 8.25% to 9.85%Collateral Security: Not requiredMoratorium Period: 6 months after jobRepayment Period: 15 years|
|MPOWER||Loan amount: INR 16-79 lakhsInterest Rate: 7.52% to 14.98%Moratorium Period: 6 months after courseRepayment Period: 10 years|
|Prodigy Finance||Loan amount: FlexibleCollateral Security: Not requiredInterest Rate: 5% to 8.50%Repayment Period: 7-20 years|
Collateral and Non-collateral International Loan Requirements
You have the option of taking out these student loans to study in the USA with or without collateral. Let’s examine it in further depth.
Collateral Loans: Collateral loans are given by banks to students who pledge either moveable or immovable property as security for the loan amount. Reps from the bank will assess your collateral, compile a report, and then provide the foreign student loan based on it.
What is accepted as collateral?
The banks maintain any liquid assets as collateral, including shares, bonds, FDs, and immovable properties like homes, businesses, or land. As with other forms of security, banks will take debentures, gold, mutual fund units, life insurance, government securities, shares, and bonds.
Non-collateral Loans: This Education Loan in USA amount for studies in the USA is not secured by real estate. Parents’ signatures or a third-party guarantee are required for this loan amount, which ranges from INR 4 lakh to INR 7.5 lakh.
Nevertheless, accepting the role of guarantor comes with a lot of responsibility since, in the event that the borrower is unable to repay the loan in full, the guarantor will be held legally responsible for making the payment on their behalf.
The sort of loan a student chooses should be determined by the costs it will cover. Hence, keep in mind the other expenses outside tuition, such as test, library, and lab fees, study materials, travel charges, insurance premiums, study trip expenses, etc.
But is it this easy to take international student Education Loan in USA? No, along with the selection of a suitable loan type, the students need to follow the eligibility criteria and fulfil the document requirements.
Eligibility Criteria for Study Loan in USA
It is crucial to meet the following eligibility requirements before applying for Education Loan in USA for American university studies:To apply from Indian banks, the student must be an Indian citizen.
- The applicant should have a strong academic record.
- They must seek admission to the technical or professional study programs that are job-oriented in nature.
- They must already secure a position at a university in the USA.
- They must be above 18 years of age.
Next, let’s check the required documents.
Documents Required for Education Loan in USA for Indian Students
Education Loan in USA Banks check in advance to see if you are a capable student who can pay back the loan balance. They can request the following set of papers in support of this:
- University Offer Letter (proof of admission)
- Estimated cost of study (as per I-20 form)
- Loan application form
- Original education certificates/mark sheets
- Documents/Scorecards of qualified exams like IELTS, TOEFL, GMAT, GRE, SAT, etc.
- Residential proof of student and guarantee
- IT returns of the co-borrower/guarantee
- Identification proofs and PAN card of the co-borrower/guarantee
- Co-borrower’s proof of income
- Passport copy of the student
- Details of assets/liabilities of the parents/guarantee/co-borrower
Banks use an upfront assessment to determine your ability to repay the loan sum. To support this, they may ask for the following papers:
How to Apply for Student Loan in USA?
The applicant must be certain of the amount needed before applying for an international student loan in the USA. So, three months before the visa interview, finalize the course/university to estimate the cost of living and tuition fees, compile a list of the necessary documents, complete the guarantee and submit the loan application. Let’s explain how to apply for a student Education Loan in USA.
- Choose an intake for your Education Loan in USA process before the universities application procedure starts.
- Evaluate the various lenders/banks based on the loan amount, interest rates, repayment period, loan processing time, loan margin, processing fee, etc.
- Submit the crucial documents to ensure the Education Loan in USA consideration.
- Once you receive the conditional loan offer letter from the bank/lender, use it as a “proof of fund.”
- Share the “proof of fund” letter to get approvals from the university, visa/immigration office, financial aid institutes, etc.
- On showing these documents to the bank, you will be asked to sign the Education Loan in USA agreement document.
- Wait to receive the loan amount.
- Students must maintain their academic standing throughout the course; receiving the Education Loan in USA amount is only the beginning of the procedure. Also, in addition to the set payments or consignor management, they have alternative pre-payment choices (if allowed by the bank).
- If your job is at stake, getting an Education Loan in USA from a reputable organization becomes crucial. Don’t worry if this is something you have never done before. You may select Yocket premium to receive support from our knowledgeable and experienced counselors. They will undoubtedly assist you in easily obtaining Education Loan in USA.
What are the issues that one can face with Education Loan in USA?
Although it is simple to apply for school loans to pursue a degree in the USA, students may encounter a challenging application procedure, unadvertised fees, and perplexing interest rates.
What are common loan margins offered by banks for study abroad loans?
Banks and other lenders typically don’t loan out the whole amount. They provide a loan of 90%, with the students arranging the remaining 10% on their own.
How can I repay the student loan amount?
When you finish your degree, often within 15 to 25 years, you can pay back the loan amount in installments. Nevertheless, the duration and payment amount may change based on the bank, lender, and loan type.
What is the most crucial thing to consider while applying for an international study loan?
Before agreeing to the terms of the loan agreement, thoroughly read it. Consult professionals other than the bank staff if you have questions regarding the advice.
How much loan can a student get for studying abroad?
Depending on the prerequisites, a student may be eligible for a loan of up to INR 40 lakhs. In actuality, a few private banks and lenders could provide higher sums with a few restrictions.
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