The United States of America is a popular study destination for international students because of its prestigious universities, which provide a wide variety of chances and experiences. But going to college in the United States can be expensive. Its popularity among Indian students is demonstrated by the fact that over 199,000 of them sought higher education in the USA during the 2021–2022 academic year.
Types of Abroad Education Loans in USA
Generally speaking, there are two types of US international student loans.
- The applicant must pledge security with the loan application for an education loan with collateral, often known as a secured education loan. Both mobile and immovable assets, such as fixed deposits, LIC insurance, non-agricultural land, residential or commercial real estate, can serve as this security. Collateral is required for loans for overseas education from the majority of Indian state banks.
- An education loan in the United States that does not require collateral as security is known as a non-collateral loan. Unsecured education loans in the United States often have higher interest rates than secured ones because of the increased risk to the lender. Furthermore, a co-applicant or co-signer is usually needed for these loans, and the co-applicant’s income and CIBIL score are used to calculate the loan amount.
Secured Education Loan in USA
In contrast to unsecured loans, secured study loans for the USA need collateral, which may allow you to receive a larger loan amount. Additionally, if you choose a secured loan, you might not need a co-applicant. The State Bank of India (SBI) and the Union Bank of India (UBI) are two public sector banks that you may want to take into consideration if you are searching for education loan choices to study in the United States.
We’ve included a comparison of these two banks’ education loan offerings in the United States below. The maximum loan amount, margin money, and interest rates for student loans in the United States are displayed in this table.
| Lender Name | Maximum Loan Amount (in INR) | Rate of Interest | Margin Money |
|---|---|---|---|
| SBI | Up to 1.5 Cr | 10.65% (for girls)11.50% (for boys) | 10% |
| UBI | Up to 1.5 Cr | 10.5% – 10.85% | 10% (listed university)15% (non-listed university) |
Unsecured Education Loan in USA
Don’t worry if you don’t have any collateral to present; there are several private banks, non-bank financial institutions, and foreign lenders who can help by offering non-collateral education loans for the United States. International lenders provide loans without a co-applicant or co-signer, however private banks and NBFCs could demand one with a minimum financial income and no obligations. Though their interest rates are typically higher, choosing overseas lenders may be beneficial because they offer loans to study in the USA in USD, which can assist save on foreign exchange fees and other expenses.
| Lender Name | Maximum Loan Amount | Rate of Interest | Margin Money |
|---|---|---|---|
| Axis Bank | Up to 50 Lakhs INR | 11% – 13.50% | 5% |
| ICICI Bank | Up to 50 Lakhs INR | 10.85% – 12.50% | 0 – 15% |
| IDFC FIRST Bank | Up to 35 Lakhs INR | 11.50% – 12.25% | Nil |
| Credila | Up to 65 Lakhs INR | 11.25% – 13% | Nil |
| Auxilo | Up to 65 Lakhs INR | 11.25% – 13% | Nil |
| Incred | Up to 60 Lakhs INR | 12.25% – 14% | Nil |
| Avanse | Up to 75 Lakhs INR | 12.50% – 13.50% | Nil |
| MPOWER Financing | Up to 100,000 USD | 12.99%(for graduate programs) 13.99%(for undergraduate programs) | Nil |
| Prodigy Finance | Up to 100,000 USD | 12% – 14% | Nil |
Expenses Covered by Abroad Education Loan for USA Study
When your loan has been authorised or accepted, it’s time to receive your money. Regarding disbursement, you can choose to withdraw all authorised funds at once or in installments based on your needs. The latter is usually much preferred because interest will only be levied on the amount that has been disbursed, not the entire amount that has been approved. Therefore, if you choose to get a partial payment, you will pay less interest than if you received the whole amount because of this.
- Tuition fees
- Living expenses (accommodation, food, utility, and more)
- Health insurance
- Visa fees
- Expenses related to studies (lab fees, instruments, and more)
Eligibility to get Abroad Education Loan for USA
There are several requirements that must be met in order for a foreign student to be eligible for an education loan in the United States. These include:
- Confirmation of acceptance from a recognized American institution for a full-time program
- Being at least 18 years of age
- Having a good academic history
- Choosing a course of study with promising career prospects
- Collateral must be provided (in the case of secured loans).
- Financial co-applicant meeting minimum income requirements (for non collateral education loan for US).
Documents Required for an Abroad Education Loan to Study in USA
Before applying for an international student education loan in the United States, students must make sure they have all the necessary paperwork in addition to the previously listed qualifying requirements. GyanDhan provides a customised document checklist to help you speed up the submission process because the document checklist can be lengthy. The following are some typical documentation required to obtain a study abroad loan for the United States:
- Loan application form
- Proof of admission: admission letter from university/institution
- Fees structure from the university
- Academic transcripts (School and Bachelor’s)
- Standardized test scores – GMAT or GRE
- English proficiency test score – IELTS or TOEFL or Duolingo
- Applicant’s KYC documents
- Passport-size photographs
- Resident proof of the applicant and co-applicant
- Income proof of the co-applicant (for non collateral education loan for US)
- Property papers (in case of secured education loan)
How to get an Abroad Education Loan to Study in USA?
Depending on the lender you choose, obtaining an education loan to study in the United States can be a laborious process. It is best to start the loan application procedure for studying in the United States four to six months prior to the date you want to enrol. Dealing with different lenders on an individual basis might be difficult. Nonetheless, GyanDhan provides Indian students with a streamlined method for acquiring an education loan in the United States. The methods listed below describe how GyanDhan can help you quickly and easily obtain an international student loan in the United States.
Step 1:
By determining your eligibility for an overseas school loan through GyanDhan’s website, you can start the loan application procedure for a US university.
Step 2:
A committed education loan specialist from GyanDhan will contact you to walk you through the loan application process after you have finished the eligibility form. Based on your needs and application, the specialist will offer information about the loan application and recommend the two best lenders. The process will start if you agree.
Step 3:
A personalised document checklist will be sent to you based on the lender’s particular criteria. To make the process of organising your documents easier, this checklist will include all the required documents and, if available, provide substitutes.
Step 4:
You will be asked to submit the documents in either hard copy (which will be picked up by a relationship officer) or soft copy (which will be uploaded on the portal), depending on the lender’s requirements.
Step 5:
The verification procedure will start as soon as the documents are submitted, and depending on the lender and loan type, it usually takes seven to fifteen days. An agreement document for your signature will be sent to you upon loan approval. You can track the status of your loan application in real time with the GyanDhan user dashboard.
Step 6:
Following the lender’s regular procedures, you can start the disbursement process whenever it’s convenient for you after signing the agreement. While foreign lenders may send the money straight to the university, certain lenders, such private banks, might transfer the loan amount straight into your account.
Repayment of Abroad Education Loan for USA
When obtaining an abroad education loan for the USA, repayment is an important factor that should be taken into consideration. Two key aspects to consider when choosing a lender are the repayment tenure and the moratorium repayment options. Different types of repayment tenure are available, such as partial simple interest (PSI), simple interest (SI), and EMI. To assist in choosing the best lender for your situation, a comparative guide has been created that places emphasis on repayment as a significant factor for obtaining a study loan in USA.
| Lender Name | Repayment Tenure | Repayment Option during moratorium |
|---|---|---|
| SBI | Up to 15 years | No payment or only SI |
| UBI | Up to 15 years | No payment or SI |
| Axis Bank | Up to 15 Years | SI or EMI |
| ICICI Bank | Up to 10 Years | SI or EMI |
| IDFC FIRST Bank | Up to 12 years | PSI or SI or EMI |
| HDFC Credila | Up to 15 Years | PSI |
| Auxilo | Up to 15 Years | SI |
| Incred | Up to 15 Years | PSI or SI |
| Avanse | Up to 15 Years | PSI or SI |
| MPOWER Finance | Up to 10 Years | SI |
| Prodigy Finance | Up to 15 Years | SI |