Education Loan

Education Loan to Study in USA: The Complete Guide 2024

Education Loan to Study in USA: The Complete Guide 2024

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Looking for a student loan for MS in USA 2024? Gyandhan brings you best loan options for MS in the US. Explore various financing choices, compare interest rates, repayment terms.

GyanDhan
Rohit Gidwani
Updated on:  19 Feb 2024  | Reviewed By: 
Aman 
| 26.5K | 11  min read

The United States is a highly sought-after destination for international students, offering a wide range of educational institutions across its 50 states. Out of the 4,500 higher education institutions in the country, approximately 1,700 provide master's degree programs. Indian students particularly favor the USA for pursuing their master's degrees, as evidenced by the significant enrollment numbers. In the 2021-22 academic year, while around 27,500 students enrolled in bachelor's programs, an impressive 102,000 students pursued master's degrees.


 However, it is crucial to note that studying in the USA can be expensive, with average tuition fees for international graduate students amounting to approximately USD 39,000. To finance their education, many students opt for abroad education loans, which not only cover tuition fees but also living and other expenses. Additionally, these loans serve as proof of funds for obtaining student visas to the USA. This blog will answer the question - ‘How to get loan in USA?’.
 

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Cost for MS in the USA

Before knowing how to get student loan for MS in US it is important to know the cost of studying MS in the USA.  Master's degree program fees in the USA typically ranges from USD 10,000 to USD 80,000 (INR 10 - 58 Lakhs) for a two-year duration. Higher-ranked private universities often charge slightly higher tuition fees and additional expenses. For example, Carnegie Mellon University has an annual tuition fee of approximately USD 43,000, while Harvard University charges tuition fees ranging from USD 47,000 to USD 49,000 per year and Columbia University's tuition fee is USD 29,382 per semester.

Taking the average, cost of an MS degree at private universities in the USA ranges from USD 25,000 to USD 50,000 per year (approximately INR 17 lakhs - 35 lakhs in Indian currency). On average, students typically spend USD 500 to USD 1,000 per month on living expenses, covering items such as food, accommodation, study materials, clothing, health insurance, recreational activities, and other necessities. However, living expenses can vary depending on the state, city, and individual lifestyle choices.

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Types of education loans for MS in the USA

Student Loan for MS in USA can be broadly classified into two categories. The first category is a secured education loan, which requires the applicant to provide collateral as security during the loan application. Collateral can include movable or immovable assets such as Fixed Deposits, LIC Insurance, non-agricultural land, residential property, or commercial property. It is important to note that most public banks in India require collateral for education loans for studying abroad.

 

Read more about: Types of Collateral Security Acceptable for an Education Loan

Second is the loan without collateral also known as an unsecured education loan. An unsecured education loan for MS in US is a loan option that does not necessitate the borrower to pledge collateral as security. However, due to the increased risk for the lender, unsecured education loans typically come with higher interest rates compared to secured loans. Additionally, these loans often 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 for MS in the USA

As previously mentioned, secured loans for MS in US necessitate collateral, allowing for higher loan amounts compared to unsecured loans. Furthermore, secured loans may not require a co-applicant. When exploring education loan options for studying MS in the USA, two recommended public sector banks are the State Bank of India (SBI) and the Union Bank of India (UBI). Here is a comparative analysis of these banks' education loan offerings for studying in the 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 for MS in USA

If you lack collateral for an education loan to study MS in the USA, there are alternative options available through private banks, NBFCs, and international lenders. Private banks and NBFCs may require a co-applicant with minimum financial income and no liabilities, whereas international lenders offer loans without a co-applicant. Opting for international lenders can be beneficial as they provide loans in USD, potentially saving on foreign exchange charges and other costs. However, it is important to note that international lenders typically have higher interest rates. Each lender offering unsecured education loans for MS in USA has its own advantages and disadvantages. To aid in your decision-making process, we have prepared a comparative chart of these lenders.

 

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 50 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 education loan for MS in USA

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

Cost to study Living expenses Other costs 
  • list items Tuition fee
  • list items Admission fee
  • list items Examination fee
  • list items Expenses for books, or laptop
  • list items Expenses for study tours
  • list items Accommodation or hostel cost
  • list items Food costs
  • list items Caution fee
  • list items Expenses for travel
  • list items Health insurance expenses
  • list items Miscellaneous expenses

 

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Education loan eligibility for MS in USA

International students seeking an education loan for MS in US must meet certain eligibility criteria. These include:

  • list items Obtaining confirmation of acceptance from a recognized American institution for a full-time master’s program.
  • list items Being at least 18 years old.
  • list items Demonstrating a strong academic track record.
  • list items Choosing a course of study with promising career prospects.
  • list items Providing collateral, if applying for a secured loan.

 

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Required documents for MS in the USA education loan

In addition to meeting the mentioned eligibility criteria, it is crucial for students to gather all the necessary documents before applying for an education loan to study in the USA. The document checklist can be extensive, but GyanDhan provides a personalized document checklist to streamline the submission process for you.

 

Document required for secured education loan  Document required for unsecured education loan 

The applicant and co-applicant KYC documents

KYC of the applicant & co-applicant

Citizenship and residence proofs of both the applicant and co-applicant.

Citizenship and residence proofs of the applicant & co-applicant

Relevant mark sheets and academic qualification records

Relevant mark sheets of the applicant

Proof of admission to the chosen educational institution is necessary.

Basic academic qualification records of the applicant

The co-applicant must provide their bank statements and income tax documents/Form 16

Admission proof and fees structure

Property documents and any other related documents like land deeds and more (as per lender requirements)

Bank statements of the co-applicant 

The fee structure of the educational program

Income tax return / Form 16 of the co-applicant 

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How to apply education loan for Masters in USA?

To avoid delays and complications in the educational loan application process, it is strongly recommended that students initiate their application as soon as they receive their admission letter from the university. Here is a general outline of the steps involved in applying for an MS loan in the USA:

  • list items Begin the loan application process for a US university by assessing your eligibility for an abroad education loan using GyanDhan's platform.
  • list items An education loan counselor will call you to discuss the possible education loan options. Post discussion, depending upon the type of lender from which the loan is to be availed, the counselor will suggest the subsequent steps.
  • list items 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. 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).
  • list items Upon the submission of the documents, the lender reviews the application. During this process, the student and his/her parents may be asked to furnish additional information. If the bank finds the application to be viable, it will approve the loan requests. 
  • list items Once the loan is approved, the student has to accept the loan offer by providing signatures on the sanction/approval letter offered by the bank and pay the processing fees.

 

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Repayment of education loan for MS in the USA

How much time it takes to repay loan after MS in USA? This is yet another question that prevails in the minds of Indian students. When acquiring an education loan for studying MS in the USA, it is crucial to consider the repayment terms. The repayment tenure and moratorium options are essential factors when selecting a lender. There are various repayment options available, including partial simple interest (PSI), simple interest (SI), and equated monthly installments (EMI). To help you make an informed decision, we have created a comparative guide that focuses on repayment as a key aspect of obtaining a loan for studying MS in the 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

 

When applying for an education loan to pursue MS in the USA, it is important to carefully evaluate and compare the offerings of different lenders. However, GyanDhan provides a convenient solution to simplify the process. By reaching out to us directly, you can benefit from our streamlined education loan assistance. Our education loan expert will assess your academic and financial background, and guide you through the available loan options. With our extensive network of partnerships with government banks, private banks, and NBFCs, we can help you find the most suitable loan for your needs. Best of all, our assistance is provided free of charge. So what are you waiting for, check your loan eligibility now!

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Frequently Asked Question

How much loan can I get for masters in USA?

The total loan amount depends on the type of loan you are applying for. In secured loans, you can get up to INR 1.5 cr depending on the collateral value. In unsecured loans, you can get up to INR 75 Lakhs depending on the co-applicant's income, target university, target course, etc.

Is taking an education loan for MS in the US the right choice?

Education loans include several benefits such as tax benefits under section 80E, no principal amount payment during the study period, saving your current corpus, etc. It is always recommended to go for an education loan instead of using your savings as it can yield better interest if you invest it somewhere else smartly.

Can I take both a scholarship and an education loan at the same time?

Yes, you can use both a scholarship and an education loan to furnish your financial requirements for studying abroad.

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