Among 193 countries in the world, the USA is ranked 10th for the highest living costs. A significant amount of Indian students travel to the USA to pursue their education despite intensifying expenses, making it the third most expensive study-abroad destination with a total cost of $36,564. Education loans are required for students those who wants to pursuit for education.
It is still possible to benefit from the country’s flexible academic system, cultural diversity, global recognition, unique curriculum, and lucrative job/internship opportunities even if you are not financially sound.
Get comprehensive insights on international student loans in the USA and plan your study abroad trip.
What is the best way to finance your study in the United States?
Due to their visa status, Indian students may find it exceptionally difficult to get a study loan in the USA. The loan process might also seem impossible in the USA if you do not have a credit history, citizenship, or a co-signer.
Here are the available options for getting student loans for international students in the USA. In this case, getting an education loan in the USA for international students is a matter of selecting the right lending source.
1. Indian banks such as SBI, HDFC, AXIS, and PNB.
2. There are also financial services in India, such as Avance Financials and Leap Finance.
3. Banks and lenders in the United States, such as Discover, Citizen Bank, Wells Fargo, etc.
Banks Providers for Study Loan in the USA:
These study loan providers in the USA offer the following loan amounts, interest rates, moratorium periods, and collateral security status:
| HDFC Bank, India | Loan Amount: upto INR 20 Lakhs
Interest Rate: 9.55% to 13.25% Collateral Security: Flexible Moratorium Period: For selected courses Repayment Period: up to 14 years |
| State Bank of India | Loan Amount: INR 30 lakhs
Interest Rate: upto 2% on the current base rate of SBI Collateral Security: From loans above INR 7.5 lakhs Moratorium Period: Course completion + 1 year, or 6 months after getting a job Repayment Period: 1-15 years |
| Axis Bank, India | Loan Amount: INR 20 lakhs
Interest Rate: 16.5% to 17.5%, special rates for women Collateral Security: From loans above INR 7.5 lakhs Moratorium Period: 6-12 months Repayment Period: 5-15 years |
| Punjab National Bank, India | Loan amount: As per requirement
Interest Rate: Base rate for pursuing education at the top 100 universities in the world Collateral security: Flexible Moratorium Period: 1 year Repayment Period: 15 years |
| Bank of Baroda, India | Loan amount: INR 20 lakhs
Interest Rate: 7.75% to 8.9% Collateral security: Tangible above INR 7.5 lakhs Moratorium Period: Course duration + 1 year Repayment Period: up to 10 years for loans below INR 7.5 lakh and 15 years for above |
| Canara Bank, India | Loan amount: INR 20 lakhs
Interest Rate: 7.80% to 9.40% Collateral Security: From loans above INR 7.5 lakhs Moratorium Period: 6-12 months Repayment Period: 15 years |
| IDBI Bank, India | Loan amount: INR 20 lakhs
Interest Rate: 8.40% to 8.75% Collateral Security: From loans above INR 7.5 lakhs Moratorium Period: 1 year Repayment Period: 15 years |
| Avance Financial Services, India | Loan amount: Customizable
Interest Rate: 13.15% Collateral Security: Flexible Moratorium Period: 6 months after the course, 3 months after a job Repayment Period: Flexible |
| Discover, USA | Loan amount: Based on GPA
Interest Rate: 2.99% to 13.99% Repayment Period: Flexible |
| Wells Fargo, USA | Loan amount: 100% cost
Interest Rate: 3.21% to 6.76% Moratorium Period: 6 months Repayment Period: 5-20 years |
| LeapFinance, India | Loan amount: 100% cost
Interest Rate: 8.25% to 9.85% Collateral Security: Not required Moratorium Period: 6 months after a job Repayment Period: 15 years |
| MPOWER | Loan amount: INR 16-79 lakhs
Interest Rate: 7.52% to 14.98% Moratorium Period: 6 months after the course Repayment Period: 10 years |
| Prodigy Finance | Loan amount: Flexible
Collateral Security: Not required Interest Rate: 5% to 8.50% Repayment Period: 7-20 years |
International Loan Requirements: Collateral and Non-Collateral
Let’s explore the differences between collateralized and non-collateralized education loans to study in the USA.
A collateral loan occurs when a bank provides a student with a loan by holding a movable or immovable property as collateral. The bank’s representatives evaluate your collateral, prepare a report, and provide you with an international student loan.
As collateral, what is accepted?
In addition to liquid assets, such as shares, bonds, and fixed-term investments, banks keep immovable assets like houses, commercial properties, and land as collateral. As collateral, mutual fund units, gold, life insurance policies, government securities, shares, bonds, bank deposits, debentures, etc., are also accepted.
Unlike a collateral loan, this education loan to study in the USA does not require the security of a property. Its amount ranges from INR 4 lakh to 7.5 lacks and does not require the signature of a parent or third-party assurance.
As a guarantor, you hold the legal liability to pay if the borrower is unable to repay the loan amount under any circumstances.
Consider other expenses besides tuition fees, such as examination/library/laboratory fees, study material, travel expenses, insurance premiums, study tour expenses, etc., when choosing a loan type.
Study Loan Eligibility Criteria in the United States
To qualify for a study loan in USA education, you must meet the following criteria:
1. The student must be an Indian citizen in order to apply for Indian banks.
2. It is important for the applicant to have a strong academic record.
3. They must enroll in technical or professional programs that are job-oriented.
4. They must already have a position at a university in the United States.
5. They must be at least 18 years old.
The documents required for an education loan to study in the United States
- The University Offer Letter (proof of admission)
- Estimated cost of study (as per the I-20 form)
- Loan application form
- Original education certificates/mark sheets
- Documents/Scorecards of qualified exams such as IELTS, TOEFL, GMAT, GRE, SAT, etc.
- Residential proof of student and guarantee
- IT return of the co-borrower/guarantee
- Proof of identification and PAN card of co-borrower/guarantee
- Proof of income for co-borrowers
- A copy of the student’s passport
- Details of assets/liabilities of the parents/guarantee/co-borrower
- The document requirements may vary depending on the amount, type of collateral, and other factors of the education loan for the USA.
What is the process for applying for a student loan in the United States?
The applicant must know how much money they need before applying for international student loans in the USA. Hence, determine the cost of living and tuition fees of the course/university, make a list of required documents, finalize the guarantee, and apply for the loan three months before your visa interview. Here’s a breakdown of how to apply for a student loan in the United States.
- Choose an intake for your US education and begin the loan process before the universities application
- procedure starts
- Compare the various lenders/banks based on the loan amount, interest rate, repayment period, and loan term
- Processing time, loan margin, and processing fee
- To ensure loan consideration, submit the crucial documents
- Use the conditional loan offer letter as “proof of funds” once you receive it from the bank/lender
- The “proof of funds” letter should be shared with the university, visa/immigration office, financial aid institute, etc.
- Upon showing these documents to the bank, you will be asked to sign the loan agreement
- Await the loan amount to arrive