Education Loan

Education Loan in USA for Indian Students 2024

Education Loan in USA for Indian Students 2024

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Do you need help funding your higher education in the USA? Get approval on your education loan for US before your admission. Learn about study loan types, interest rates, and application tips here.

GyanDhan
Rohit Gidwani
Updated on:  07 Jun 2024  | Reviewed By: 
Aman 
| 21.9K | 11  min read

USA is a highly sought-after study destination by international students due to its distinguished universities that offer a diverse range of experiences and opportunities. However, pursuing higher education in the USA can be costly. In the academic year 2021/2022, more than 199,000 Indian students pursued higher education in the USA, signifying its popularity among Indian students.

Another reason for its popularity is the ample employment opportunities worldwide after completing a degree. Tuition fees for different programs vary, with the average fee for international graduate students at around USD 39,000. An abroad education loan is an excellent way to finance not only tuition fees but also living and other expenses. Additionally, abroad education loans for US serve as valid proof of funds for US student visas.

Check Your Education Loan Eligibility

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Types of abroad education loans in USA

In general, International student loan US can be classified into two categories.

  • list items An education loan with collateral, also called a secured education loan, requires the applicant to pledge security along with the loan application. This security can be movable or immovable assets, such as Fixed Deposits, LIC Insurance, non-agricultural land, residential property, or commercial property. Most public banks in India mandate collateral for abroad education loans.
  • list items An non collateral education loan for US is a type of loan that does not require the borrower to provide collateral as security. Due to the higher risk involved for the lender, the education loan interest rate in USA for unsecured education loans are generally higher than those for secured education loans. Additionally, these loans typically require a co-applicant or co-signer, and the loan amount is determined based on the co-applicant's income and CIBIL score.
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    Secured education loan in USA

    As mentioned earlier, secured study loan for USA requires you to provide collateral, which can enable you to obtain a higher loan amount compared to unsecured loans. Additionally, you may not require a co-applicant for your loan if you opt for a secured loan. If you are looking for education loan options to study in the USA, two public sector banks that you could consider are the State Bank of India (SBI) and the Union Bank of India (UBI).

    Below, we have presented a comparative study of these two banks with regard to education loan in USA. This Table shows the maximum loan amount, margin money, and student loan interest rates USA.

    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)

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    Unsecured education loan in USA

    If you don't have collateral to offer, don't worry as there are plenty of private banks, NBFCs, and international lenders that can assist you in this situation by providing non collateral education loan for US. While private banks and NBFCs may require a co-applicant or co-signer with a minimum financial income and no liabilities, international lenders offer loans without a co-applicant or co-signer. Opting for international lenders may be advantageous as they provide loans to study in the USA in USD, which can help save on foreign exchange charges and other costs, but their interest rates tend to be higher.

     

    Hence, it can be concluded that each lender that offers study loan in USA has its own advantages and disadvantages. To assist you in selecting a suitable lender, we have created a comparative chart for all the possible lenders that offer unsecured education loan in USA. These unsecured loans are available for all Bachelor's, MBA, and Master's.

    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

    HDFC 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

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    Expenses covered by abroad education loan for USA Study

    Once your loan has been approved/sanctioned then it is time to take a disbursement. Now, when it comes to disbursement, it is your choice to take out all the approved money in one go or take it out in parts as per your requirements. Usually, later is much preferred because the interest that is charged will only be on the disbursed amount not the total approved amount. So in case you decide to take disbursement of part amount then the interest that you would be paying will be less as compared to when you would have taken a full amount disbursement.

    The expenses which may be covered under loan as per the lender will include - 

  • list items Tuition fees
  • list items Living expenses (accommodation, food, utility, and more)
  • list items Health insurance
  • list items Visa fees
  • list items Expenses related to studies (lab fees, instruments, and more)  

  • Type of Education Loan

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    Eligibility to get abroad education loan for USA

    To obtain an abroad education loan in USA as an international student, there are specific conditions/eligibility criteria that need to be fulfilled. These consist of:

  • list items Confirmation of acceptance from a recognized American institution for a full-time program
  • list items Being at least 18 years of age
  • list items Having a good academic history
  • list items Choosing a course of study with promising career prospects
  • list items Collateral must be provided (in the case of secured loans).
  • list items Financial co-applicant meeting minimum income requirements (for non collateral education loan for US).
  •  

    Check Your Education Loan Eligibility for Free

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    Documents required for an abroad education loan to study in USA

    Apart from the eligibility criteria mentioned earlier, it is essential for students to ensure that they have all the required documents before applying for an education loan in USA for international students. The document checklist can be extensive, which is why GyanDhan offers a personalized document checklist to help you expedite the submission process. Some common documents that will be needed to secure a study abroad loan for the USA are:

  • list items Loan application form
  • list items Proof of admission: admission letter from university/institution
  • list items Fees structure from the university
  • list items Academic transcripts (School and Bachelor’s)
  • list items Standardized test scores - GMAT or GRE
  • list items English proficiency test score - IELTS or TOEFL or Duolingo
  • list items Applicant’s KYC documents
  • list items Passport-size photographs
  • list items Resident proof of the applicant and co-applicant
  • list items Income proof of the co-applicant (for non collateral education loan for US)
  • list items Property papers (in case of secured education loan)
  •  

    Read more about:

  • list items Educational Loan Tax Benefits Section 80E
  • list items Types of Collateral Security an Education Loan
  • list items All About SOP For MS in US
  • list items Guide to Public Universities in the USA
  • list items How to prepare for F1 student visa interview?
  • list items F1 visa interview questions
  • list items Cost of Living in the US
  • list items Education Loan for MBA in USA for Indian Students
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    How to get an abroad education loan to study in USA?

    Securing an education loan to study in the USA can be a time-consuming procedure, largely influenced by the lender you select. It is advisable to initiate the loan application process for studying in the USA around 4 to 6 months before your intended enrollment date. Managing the process individually with various lenders can be challenging. However, GyanDhan offers a simplified approach to obtaining an education loan in USA for Indian students. The following steps outline how GyanDhan can assist you in acquiring an international student loan USA easily.

     

    Step 1 - Begin the loan application process for a US university by assessing your eligibility for an abroad education loan using GyanDhan's platform.

     

    Step 2 - Once you have completed the eligibility application, a dedicated education loan expert from GyanDhan will get in touch with you to guide you through the loan process. The expert will provide details about the loan application and suggest the two most suitable lenders based on your requirements and application. If you agree, the process will proceed.

     

    Step 3 - Based on the lender's specific requirements, you will receive a customized document checklist. This checklist will outline all the necessary documents and offer alternative options (if available) to simplify the document arrangement process for you.

     

    Step 4 - Depending on the lender's instructions, you will be requested to submit the documents either in hard copy (collected by a relationship officer) or soft copy (uploaded on the portal).

     

    Step 5 - Once the documents are submitted, the verification process will commence, which typically takes around 7 to 15 days, varying according to the lender and loan type. Once the loan is approved, you will receive an agreement letter for signing. The GyanDhan user dashboard allows you to monitor the real-time progress of your loan application.

     

    Step 6 - After signing the agreement, you can initiate the disbursement process at your convenience, following the standard procedures of the lender. Some lenders, such as private banks, may deposit the loan amount directly into your account, while international lenders may disburse the funds directly to the university.

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    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

    Before initiating your education loan application process for the USA, it is crucial to thoroughly explore and compare the options provided by different lenders based on various factors. However, with GyanDhan, you can bypass the challenges by directly contacting us. By leveraging our streamlined education loan process, you can benefit from our free assistance in obtaining education loans for studying in the USA. Our knowledgeable education loan counselor will assess your academic and financial profile and discuss the available loan options suitable for you. We have established partnerships with multiple lenders in the market, including government banks, private banks, and NBFCs. So what are you waiting for, check you loan eligibility now!

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    Frequently Asked Questions

    How to get education loan in USA for international students?

    To secure an international student loan in the USA, you need to be accepted by a college or university first. Most lenders will require your student visa and proof of acceptance to a U.S. institution. Many also necessitate a cosigner who is a permanent US resident with good credit and has lived in the US for at least two years.

    What types of interest rates apply to international student loans in the USA?

    Interest rates for international student loans often depend on benchmarks such as the Prime Rate or the SOFR (Secured Overnight Financing Rate), plus a margin based on the borrower or their cosigner's creditworthiness. The Prime Rate is influenced by the federal funds rate, while the SOFR is based on the Treasury repurchase market transactions.

    What are the repayment options for international student loans in the USA?

    Repayment terms vary, but typically, students can choose from full deferral, paying interest only while in school, or immediate repayment of both interest and principal once the loan has been disbursed. The repayment period can range from 10 to 25 years, depending on the loan amount.

    Can I get a student loan in the USA without collateral?

    Yes, there are both secured (with collateral) and unsecured (without collateral) student loans available. Unsecured loans do not require an asset as security but instead consider the borrower's creditworthiness and ability to repay the loan. These loans might require a cosigner or a signature from a parent or third party.

    Should I take an international student loan in the USA or from my home country?

    If you opt for a student loan in the USA, interest rates may vary between 8% and 19%. However, taking a loan from your home country might be more advantageous as interest rates there are approximately around 10.25%.

    Check Your Education Loan Eligibility


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