Education Loan to Study in the USA for Indian Students

    Updated on: 11 Jan 2023

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    Table of Content

    Is education loan the right option?

    What to check while selecting the education loan?

    What are the types of education loans available in India to study in the USA

    What are the types of lenders offering US education loans to Indian students?

    What are the expenses covered by education loans for the USA?

    Which are the top government bank schemes in India offering education loans to study in the USA?

    Which are the top private banks in India offering education loans to study in the USA?

    Which are the top NBFCs offering education loans to study in the USA?

    Which are the top international lenders offering education loans to study in the USA?

    How to get an education loan in India to study in the USA?

    How can GyanDhan help Indian students in getting a loan to study in the USA?

    What are the documents required for an education loan to study in the US?

    Frequently Asked Questions


    Do you know there are broad options of education loans available for Indian students to study in America? A discussion on education loans to study in the US is highly relevant, since  the USA is one of the most sought-after destinations for Indian students seeking education opportunities abroad. A very few countries in the world offer as many benefits of higher education as America. Majority of the top colleges in the popular world rankings are from the USA,  and the career opportunities post-study in the US are simply unmatched. 

    Higher education in America is promising, but highly expensive too. To furnish such exponentially high costs, education loans are the best choice. Education loans to study in the US for Indian students might seem like a jigsaw puzzle, but it is not the case. If you do your homework or take the help of expert loan counselors, you can get the best loan product for you!

    In this blog, we will discuss in detail the education loan options for Indian students to study in the USA, different lenders, and the application process.
    Let's dive in...

    Check Your Education Loan Eligibility Apply Here

    Is education loan the right option?

    Readily available funds are always beneficial, and an education loan gives you that. Even if you have savings to fund your study in the US, you must consider taking an education loan, for if you invest that money smartly, you can reap more interest than what you will be paying for your education loan.

    Plus, there are some tax benefits for education loans. With the new TCS(Tax Collection at Source) rules, an education loan would save you 4.5% more tax than self-funding. This difference can be higher for the US since 1 US dollar equals more than 80 Indian rupees! 

    Here are some of the top benefits of taking an education loan to study in the USA:

    • Personal savings remain untouched
    • Tax savings on study loans
    • Customized loan products 
    • Repayment after graduation
    • Self-dependence
    • A tension-free study in the US!

     

    To know in detail about the benefits of abroad education loans, you can read Top Benefits of an Education Loan

    What to check while selecting the education loan?

    Selecting the right education loan isn’t easy. There are various things you must keep in mind while choosing the right lender.
    Some of the major things you must compare while selecting the education loan product are:

     

    Check Your Education Loan Eligibility for Free Click Now

    What are types of education loans available in India for study in the USA?

    Broadly, there education loan options in India to study in the USA fall under two brackets:

    1. Secured Education Loans - These are the education loans with collateral. As the name suggests, you will have to pledge an asset to lender as a security in order to get an education loan.

      This collateral can be of two types:
      • Tangible assets such as flats, land (non-agricultural), shops, etc.
      • Intangible assets such as fixed deposits, life insurance, government bonds, etc.
         
    2. Unsecured Education Loans - These are the education loans without collateral. As the name suggests, you do not need to pledge any security to the lender in order to avail of the education loan. However, there should be a co-applicant and his/her income becomes a major determinant of the loan sanction. Also, only the private lenders in India and a few international players offer an unsecured education loan for amounts more than INR 7.5 Lakhs.

     

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    What are the types of lenders offering US education loans to Indian students?

    For the Indian students, there are mainly 4 types of lenders who  provide education loans to study in the USA:

     

    We will see in detail each of the lenders and everything regarding the education loans they offer, including the maximum amount available, eligibility criteria, interest rates, repayment tenure, etc

    What are the expenses covered by education loans for the USA?

    Various loan schemes are available in India which cover almost all types of expenses other than the tuition fee.
    Some of the expenses covered under the study loans are:

    • Fee payable to the college 
    • Accommodation fee
    • Examination, laboratory, library, fee
    • Books, instruments, etc.
    • Caution deposit, refundable deposit, building fund, etc.
    • Travel expenses
    • Insurance premium (if applicable)
    • Laptop (if required)
    • Other expenses like study tours, thesis, etc.

    Which are the top government bank schemes in India offering education loans to study in the USA?

    • SBI Global Ed-Vantage - State Bank of India has a Global Ed-Vantage scheme for Indian students, which offers overseas education loans for the USA. You can get a loan between INR 20 lakhs and INR 1.5 crore. The maximum loan tenure is 15 years and the repayment period starts  6 months after the course completion.

      To get this loan, you are required to provide collateral as security. SBI mainly considers this collateral as the key source of security. Co-applicant’s profile is not very important. You can also get a rebate of 0.5% on the interest rate if you take SBI RiNn Raksha insurance on your loan.
       
    • Bank of Baroda Scholar - Bank of Baroda is one of the top public-sector banks for overseas education loans for all countries, including the USA. The bank understands that every study abroad student is different and it has kept a different pricing scheme as per the student’s profile, course, and country.

      BOB has  a list of premier institutions dominated by educational institutions in America. BOB education loan to study in the USA has a 100% margin (for listed colleges), a 12-month moratorium period, and a low-interest rate.
       
    • PNB Udaan - Punjab National Bank’s Udaan loan scheme can be availed for studying  various diploma/degree courses, courses offered by CPA in the USA, CIMA in London, etc. The maximum loan amount depends on the student’s requir ents. The  loan tenure can be extended up to 15 years and the repayment starts  one year after course completion. To know more about PNB Udaan, visit Punjab National Bank Abroad Education Loan Details
       
    • Oriental Bank of Commerce Education Loan Scheme - This loan scheme is offered to Indian students who want to pursue their higher education either in India or abroad. For studying in the US, the loan amount depends on the fee structure of the target institute. The margin is 15% on education loans overseas, provided the amount is over INR 4 Lakhs.

      The maximum possible loan tenure is 15 years and the repayment starts right after the course completion. To know more OBC education loan scheme, visit Oriental Bank of Commerce Education Loans for India and Abroad.

     

    Check Your Education Loan Eligibility for Free Click Now

    Which are the top private banks in India offering education loans to study in the USA?

    There are a few private banks in India offering education loans to study in the USA. Among them, the leading ones are:

    • Axis Bank - One of the largest commercial private banks in India, Axis Bank offers education loans to study in the US. The maximum amount offered in unsecured loans is up to INR 50 lakhs. The interest rate typically ranges between 11-15%% p.a.

      There is no margin money for the loan amount up to INR 4 lakhs while it is 15% for the amount above INR 4 lakhs. The  applicable moratorium period is up to 12 months after the course completion and there is no prepayment penalty.
       
    • ICICI Bank - One of the top private banks in India, ICICI Bank offers education loans for studying in the USA to Indian students,both secured and unsecured. The maximum loan amount for  secured loans is up to INR 1 crore and for unsecured loans up to INR 50  lakhs. The interest rate starts at 10.5% p.a.

      There is no margin money for up to INR 20  lakhs, while it is 15% for the amount above INR 20  lakhs.  The moratorium period is up to 6 months after the course completion and there is no prepayment penalty.
       
    • HDFC Bank Education Loan for Foreign Education - HDFC bank offers education loans with no upper limit for collateral loans and up to INR 45 lakhs for without collateral  loans to study abroad. There will be floating interest rates and the repayment period can be up to 14 years, including the moratorium period.
       
    • IDFC First Bank - IDFC First Bank offers education loans with no upper limit for secured loans and up to 50 lakhs for unsecured loans. The interest rate is around 11% (for unsecured loans), and the processing charge could be 1.5% of the loan amount. The borrower will get a moratorium period of one year after course completion and a repayment tenure up to 12 years.
    Check Your Education Loan Eligibility Apply Here

    Which are the top NBFCs offering education loans to study in the USA?

    • HDFC Credila - The first specialist education loan lender in India, HDFC Credila Financial Services offers education loans to study abroad for more than 1000 universities across  35+ countries in the world. The maximum amount  for education loans without collateral from HDFC Credila is INR 50-60 lakhs.

      The rate of interest ranges from 11% to 12.5% p.a. Students have to pay an interest amount during the study period and the principal amount repayment starts  6 months after course completion. The processing fee is 1-2% of the loan amount (plus GST) and there is no prepayment penalty. HDFC Credila gives a repayment period up to 12 years.
       
    • Avanse Financial Services - One of the top NBFCs in India, Avanse Financial Services offers education loans to1,626 universities, 1,262 colleges, and more than 6,000 courses across 44 countries in the world. The maximum loan amount that can be taken without collateral from Avanse is INR 50 Lakhs. The rate of interest ranges from 12-13.65% p.a.

      Students have to pay a simple interest or partial interest during the study period and the repayment of the principal amount starts 6 months after course completion or 3 months after getting a job (whichever is earlier). The processing fees charged is usually 1% of the loan amount (plus GST) and there is no prepayment penalty. Maximum repayment period for Avanse education loans can be up to 15 years.
       
    • InCred - Offering unsecured loans to study abroad on flexible terms, InCred is an NBFC that can offer up to INR 40 Lakhs as study abroad loans without collateral. The rate of interest ranges from 11.75% to 15% p.a. Applicants have to pay a simple interest or partial interest during the study period.

      The maximum loan tenure can be up to 12 years. The processing fee charged is usually 1% to 1.25% of the loan amount (plus GST) and there is no prepayment penalty.
       
    • Auxilo - A pro-education NBFC, Auxilo is another smart option for study abroad loans. The maximum loan amount for an unsecured education loan from Auxilo is INR 40 Lakhs (case-level exceptions are possible). The rate of interest ranges from 12.-13.5% p.a. The processing fees charged is 1-2% of the loan amount (plus GST) and there is no prepayment penalty. The maximum repayment period is 10-12 years.

     

    Which are the top international lenders offering education loans to study in the USA?

    • MPOWER Financing - MPOWER Financing offers education loans for higher studies in the US and Canada. The education loan is offered in USD and CAD without co-applicant or collateral. The maximum loan amount without collateral from MPOWER Financing is up to USD 1 lakh (INR 82 lakhs). The rate of interest is around 11.99%  for graduate courses and around 10.49for undergraduate courses. There is no margin money involved and the repayment tenure can be up to 10 years.
       
    • Prodigy Finance - Prodigy Finance is a UK-based financial lender that offers education loans to students on the basis of their academic profile without any collateral or co-applicant. The study abroad loan is offered in USD and EUR, depending upon the target country. The rate of interest is around APR - 13.23% There is no margin money involved and the repayment tenure can be up to 20 years. The repayment starts after 6 months after the course completion. To know more, visit Prodigy Finance Education Loan.

    How to get an education loan in India to study in the USA?

    1. Check your loan eligibility on GyanDhan.
    2. Get expert loan counseling from our counselor to compare the education loan options available. 
    3. Select a lender and the application online on our platform.
    4. Get your customized document checklist.
    5. Submit the documents either online or get documents picked-up from your home by our representative.
    6. Property & other legal evaluation (in loans with collateral).
    7. Get the loan sanction letter after the lender’s approval.

     

    Check Your Education Loan Eligibility for Free Click Now

    What are the documents required for an education loan to study in the US?

    Documents required to apply for an education loan vary with lenders. The following is a general list of documents an applicant may need while applying for an education loan:

    From Applicant:

    • Identity Proof: PAN/ Passport/ Driver’s License/ Voter ID card or other valid government issued identification document.
    • Address: Recent copy of Telephone Bill/ Electricity Bill /Water Bill/ Piped Gas Bill or copy of Passport/ Driving License/ Aadhaar Card.
    • Passport 
    • Past Academic Record- Undergraduate, 12th, and 10th results
    • Entrance Exam Result (e.g. GMAT, GRE, TOEFL, etc.)
    • Proof of Admission: Admission Letter. Conditional admission letter is also applicable.
    • Statement of cost/expenses.
    • 2 passport-size photographs.
    • Loan A/C statement of one year, if there is any previous loan from other Banks/ Lenders.
    • 3 months salary slip if the student has work experience

     

    From Co-Applicant:

    • ID and Address Proof ( PAN or Aadhar/Any)
    • 3 months salary slip (if salaried) or Business address proof
    • Latest 6 months bank statements
    • ITR 2 years / Form 16 for 2 years
    • Own residence proof (E-Bill)
    • Passport Size Photograph


    From applicant’s Mother:

    • Address Proof -Aadhar and Pan Card 
    • Passport size photo
    • Contact Number
       
    Evaluate your Probability of Admission in US Universities Click Here

    How can GyanDhan help Indian students in getting a loan to study in the USA?

    Skip all the hurdles of getting an education loan by simply contacting GyanDhan. You can get the benefit from our streamlined education loan process. GyanDhan offers free help in getting an education loan to study in the USA and several other major countries.

    Our education loan counselor will discuss the loan options available to you after evaluating  your profile. We work in partnership with several lenders in the market, including public sector banks, private banks, and NBFCs. With us, you will not have to worry about your abroad education loan application. To know if you are eligible for a USA study loan, check your loan eligibility now!

     


    Frequently Asked Questions

    Can Indian students get education loans to study in the USA?

    Yes. An Indian student can get collateral and without collateral education loans to study in the US from public banks, private banks, NBFCs, and international lenders. The amount and expenses covered, interest rates, moratorium and repayment period, etc., varies with the lender and loan type.

    Which bank is best for education loans in the USA?

    In secured education loans, public banks, like SBI and BOB, are the best options for education loans to study in the US. The applicant will get up to 1-1.5 crores for secured education loans from public banks. Public banks offer the best interest rates, tax benefits, moratorium benefits, and other eligible subsidies. But the maximum amount public banks offer in unsecured education loans is 7.5 lakhs.

    Private banks like Axis, ICICI, IDFC First, and HDFC will be the best options if you need an unsecured education loan. They offer up to 40-60 lakhs in education loans without collateral.

    How can I get an education loan to study in the USA?

    You must fill out the application form and submit it with relevant documents to the lender. However, it will be a time-taking process. Also, different lenders have different application criteria, which may confuse the applicant.

    You can apply through GyanDhan for easy application and less processing time. GyanDhan will analyze your profile, suggest the best lender, and connect you with the lender for further processing. If the application is accepted, GyanDhan will assist you till loan disbursement and even after that. 
    If the application is rejected, GyanDhan will suggest the next lender or amend your application. All the services are 100% free for the students.

    What are the eligibility requirements for an education loan to study in the USA for Indian students?

    The basic eligibility requirements are:

    • Indian citizenship
    • 18 years of age
    • Co-signer or co-applicant

     

    The eligibility criteria for banks include the academic track of the student too. Similarly, the eligibility conditions vary with lenders.

    How much money can I borrow with an education loan to study in the USA for Indian students?

    The maximum amount of an education loan varies with the type of loan and lender. Public and private banks give up to 1.5 crores in secured education loans, whereas NBFCs have no cap(maximum amount limit) for secured education loans. In unsecured loans, the maximum limit is 40-60 lakhs for private banks and NBFCs. International lenders like Prodigy Finance and MPOWER Financing lend 75-82 lakhs.

    How do I repay an education loan to study in the USA for Indian students?

    The repayment period for education loans is between 10-15 years for different lenders. No repayment is mandatory for education loans from public banks in the moratorium period. NBFCs and international lenders require the borrower to repay EMIs immediately after loan disbursement.

    The students can work part-time in the US to repay the education loan EMIs. The US education system would allow an international student to work 80 hours a week part-time.

    What are the interest rates for an education loan to study in the USA for Indian students?

    The interest rates are not the same for all the lenders. The following is a list of interest rate offered by different lenders:

    Public banks: 

    • SBI-9.5-10%

     

    Private banks:

    • ICICI-10.75-11.5%
    • AXIS-10.4-11.5%
    • HDFC-11-12%
    • IDFC First- 11%

     

    NBFCs:

    • HDFC Credila-
    • AVANSE-11.5-12.5%
    • INCRED- 11.5-15%
    • Auxilo- 12-13.5%

     

    International lenders:

    • Prodigy Finance- 13.23% (in USD)
    • MPOWER Financing- 10.49-11.99% (in USD)

     
    Listed above are the interest rates for unsecured education loans by different lenders. In secured loans, the interest rates are lower (typically) by 2-3%.

    First published date:


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