Educational Loan Options for MS in the USA

    Updated on: 11 Aug 2022


    As the world's most popular study abroad destination, the USA has a lot to offer to its international postgraduates. America is not only the most popular choice for international study but is also one of the largest countries with 50 States and over 4,500 higher educational institutions (around 1,700 providing Master degrees). An estimated 56.3% of the Indian students in the USA were reported to be studying at the Graduate (Master’s) level in 2016-17, preceded by 61.4% in 2015-16.

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    What is the average cost of studying MS in the US?

    The fees for MS programs in the US generally range from $10,000 to $80,000 (INR 10 – 58 lakhs) for two years. Some of the top universities (private) charge slightly higher tuition fees and other expenses. A top-grade university like Carnegie Mellon University falls in the higher range ($43000 annually). Then there is Harvard University which charges graduate tuition fees of around $47, 000 to $49, 000 for a year. The Columbia University charges tuition fees of $29,382 per semester. The tuition fees of Princeton University for 2019-20 is $51,870 per year.
    If one takes the middle ground, the average cost of MS in the USA for private universities will vary from $25,000 to $50,000 per year which roughly translates to INR 17 lakhs - 35 lakhs in Indian currency. On an average, students tend to spend $500 to $1000 per month on living which includes expenses related to food, housing, study material, clothing, and other necessities like health insurance, recreational activities, etc.
    However, the expenses vary as per the state, city, and conditions one chooses to live in.

    Why take an education loan for studying MS in the USA?

    An education loan is a sum of money borrowed to finance college or other education-related expenses. Initiated by the SBI in the year 1995, it is now offered by most public and private banks and a few NBFCs. An education loan is of two types - a secured one and an unsecured one.

    An education loan without collateral refers to an unsecured loan. In this case, the student concerned does not have to pledge any asset in order to get a loan. Several private banks and NBFCs offer such loans
    On the other hand, an education loan with collateral is also known as a secured loan. To get this loan, a student has to mortgage an immovable property or asset. This type of loan has a lower interest rate and a longer repayment period.

    How to get an Education Loan for MS in the USA?

    Getting an education loan to fulfill all the expenses might seem difficult at first sight and it depends on various terms and conditions. Banks (both public and private) and NBFCs have their respective eligibility criteria and complicated application and sanction process. In addition to this, the processing time and the document requirements of the bank can plague you. Loan sanction also depends upon the college you are going to and the course you will be persuing. You need to to do some homework at your end and can also get in touch with education loan consultant like GyanDhan to make education loan for MS in US more accessible to you.

    What are the available education loan options for MS in the USA without collateral?

    Given in the table below is a breakdown of the without collateral education loan options for the USA offered by different types of banks and their salient features. One must note that public banks offer educational loans only up to INR 7.5 lakhs without collateral which is inadequate to finance the high cost of studying abroad. Hence, one can consider private banks and NBFCs to avail without collateral education loans to finance a higher amount. 

    Educational Loan for MS in the US - Without Collateral

    Features

      Public Banks  

    Private Banks

    NBFCs

    Example Lenders

    SBI, BOB

    Axis Bank, ICICI Bank

    Avanse, Incred, HDFC Credila, Auxilo

    Loan Amount (INR)

    NA

    INR 60 Lakhs

    INR 50 Lakhs

    Interest Rate Range

    NA

    11.5%-12.5%

    12%-14%

    Processing Fees (INR)

    NA

    For loan lesser than INR 20 Lakhs : INR 0
      For loan greater than INR 20 Lakhs: INR 750 per Lakh  

      1%-2% of the loan amount  

     Number of Colleges Supported 

    NA

    More than 50

    More than 150

    Depending on the types of lenders, features like repayment tenure, processing time and expense coverage vary. 

    Check Your Education Loan Eligibility Apply Here
    • Repayment Period - The maximum repayment period for educational loans without collateral is 20 years in the case of private banks, while in the case of public banks, the tenure is 10 years. However, if you wish to extend the repayment tenure of the education loan, GyanDhan gets in touch with the lender on your behalf, requests for an extension and tries to offer you a customized loan based on your requirements. 
    • Processing Time - Private banks take 5-7 days to process education loans for the USA without collateral, whereas NBFCs take 4-5 days. In the case of any delay by the lender, GyanDhan immediately gets in touch with the upper management of the lending institution and tries to get the loans sanctioned on time.
    • Expenses Covered - Loans from private banks cover 85% of the total expenses, whereas NBFCs cover 100% of the expenses.
    • Co-applicant Income Requirement - In the case of education loans without collateral, private banks generally require co-applicants to have a monthly income of more than 35k. NBFCs, on the other hand, normally require the co-applicants monthly income to be more than 20k. However, the exact income requirement may vary as per the loan amount. As per our experience in dealing with loans of this kind, in the case of NBFCs, 50% of the income should be sufficient to bear the interest per month. On the other hand, for banks, this number is 65%.
    • Common Decline Reasons - Both Private banks and NBFCs decline education loan applications for MS in the USA mainly due to two reasons - Both Private banks and NBFCs decline education loan applications mainly due to two reasons - a) if the income of the co-applicant is not sufficient to pay the interest during the study period, b) if the applicant has a poor CIBIL score. Nevertheless, a poor CIBIL score does not completely diminish your chances of getting an education loan. Let GyanDhan’s counsellor know in advance your CIBIL score and we will try to come up with solutions which will help you get your loan sanctioned.  

    What is the eligibility criteria for education loan for MS in US?

    To get an education loan for MS in the US via GyanDhan, you should be

    1. An Indian Citizen.
    2. Above the age of 18 years.
    3. Have been accepted at a US university or are applying for the same.

    What are the common documents required for a without collateral educational loan for the USA? 

    Several banks and NBFCs which provide unsecured loans require borrowers to submit certain documents. The list of documents required vary as per the bank, student’s profile and various other factors. However, the following are the documents which banks mainly need the applicants to submit: 

    • KYC of the applicant & co-applicant
    • Citizenship and residence proofs of the applicant & co-applicant
    • Relevant mark sheets of the applicant
    • Basic academic qualification records of the applicant
    • Admission proof 
    • Bank statements of the co-applicant 
    • Income tax return / Form 16 of the co-applicant 
    • Fees structure 

     
    Students finding themselves in the dark regarding the documents can consult GyanDhan. We provide the applicants with a customized list of documents to be submitted ensuring that all the documents are submitted in one go thus expediting the loan application process. 

    What are the available education loan options for MS in the USA with collateral?

    Public and Private banks and NBFCs offer education loans for the US with collateral. Below are the salient features of the loan options offered by various types of lenders.

    Education Loan for MS in US - With Collateral

    Features

    Public Banks

    Private Banks

    NBFCs

    Example Lenders

      State Bank of India, BOB  

    Axis Bank, ICICI

    Avanse, Incred, HDFC Credila, Auxilo

    Loan Amount (INR)

    Upto INR 1.5 Cr

    Upto INR 80 lacs

    Upto INR 80 lacs

    Interest Rate Range

    9.2%-10.5%

    11%-12.5%

    12%-14%

    Processing Fees (INR)

    NA 11800

      Max upto INR 17000  

      1%-2% of the Loan Amount  

    Payment During Study Period

    NA

    Simple Interest

    Simple/Partial Interest

     

    Other features like repayment period, processing time, expense coverage and common decline reasons vary depending upon the types of lenders. 

    Check Your Education Loan Eligibility Apply Here
    • Repayment Period - The repayment period for these loans in the case of public banks is 15 years. On the other hand, the tenures for private banks and NBFCs are 20 years and 10 years respectively.
    • Processing Time - Public banks take 12-15 days to process education loans, whereas private banks take 10-12 days. In the case of NBFCs, the processing time is 8-10 days.
    • Expenses Covered - Education loans from public banks cover 90-100% of the expenses. Private banks cover 85%, whereas NBFCs cover 100% of the expenses. 
    • Common Decline Reasons - The common decline reasons in both the cases of public and private banks are incomplete collateral documents and poor CIBIL score. NBFCs mainly cite CIBIL and low income as decline reasons. 

    However, it has been observed that those who apply for education loans with the help of Gyandhan have 50% more chances of getting their loan sanctioned as compared to those who directly approach the bank. The primary reason for this is that our expert loan counsellor comprehensively evaluates your profile to arrive at the most suitable education loan option for you and gets in touch with that lender first which is most likely to approve your loan application. 

    What are the collaterals accepted for a secured education loan?

    Following are the two types of collateral security acceptable for an education loan:

    • Tangible Assets: Real estate assets such as land, house, flat, etc.
    • Intangible Assets: Liquid securities such as mutual funds, fixed deposits, life insurance policies, government bonds, etc.

    What are the documents required for an educational loan for the USA with collateral?

    Several banks and NBFCs which provide secured loans require borrowers to submit certain documents. The list of documents required vary as per the bank, student’s profile and various other factors. However, the documents which banks commonly need the applicants to submit are:

    • KYC of the applicant and co-applicant
    • Citizenship and residence proofs of the applicant and co-applicant
    • Relevant mark sheets of applicant
    • Basic academic qualification records of the applicant
    • Admission proofs
    • Bank statements of the co-applicant
    • Income tax documents/Form 16 of the co-applicant
    • Property documents
    • Fees structure

    The property documents required vary even as per different areas within a city. Students, therefore, finding themselves in the dark regarding the documents can consult GyanDhan. We provide the applicants with a customized list of documents to be submitted ensuring that all the documents are submitted in one go thus expediting the loan application process. 

    Which educational loan is preferable for MS in the USA - Unsecured or Secured?

    When it comes to the US, the most popular study destination for international students, it is only obvious that there is a wide range of loan options available. Banks and NBFCs bombard students with several loan options which makes it difficult for them to choose the most appropriate education loan as per their requirements and profile. GyanDhan suggests that students opt for a secured loan from PSUs because they offer loans with a considerably lower rate of interest. In case you can't arrange security against the secured loan, then an unsecured loan from private banks should be preferred over loans from NBFCs as they have lower interest rates as compared to NBFCs. Moreover, loans from private banks offer additional tax benefits which are not offered by all the NBFCs. Additionally, the loan processing fee at the private banks is lower than that of NBFCs.
    However, you can always get in touch with GyanDhan, we will help you select the best loan for your profile out of the number of options available in the market.

    How to calculate the repayment amount for an education loan for MS in the US?

    Gyandhan’s EMI calculator is an online tool that helps you calculate the amount you need to monthly after taking a study abroad loan. This tool also gives you an amortization schedule showing EMI break-up in terms of the principal repaid and monthly interest paid. Moreover, it also details the amount of education loan that have repaid till date and how much is outstanding. All you need to do is to fill the principal loan amount, loan tenure, and interest rate and it immidiately calculates the education loan repayment details.

    What is the application procedure for loans for masters in the US?

    Due to the time-consuming and complex process of an educational loan application, it is highly advised that students start with the application process as soon as they get the admission letter from the university. Given below is a broad overview of the steps involved in applying for a loan for MS in the USA:

    • Check your eligibility for an education loan here or request a call back here
    • Our education loan counsellor 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, our counsellor will suggest the subsequent steps.
    • Submit all the supporting documents. (This is a crucial step, and it is recommended that you take expert help at hand to make sure that every required record is submitted. If you reside in a metropolitan city and have applied to a nationalized bank for the education loan, GyanDhan’s relationship officer will pick up the documents from your home for free, however, for other cities, we will set an appointment with the branch manager of the bank and coordinate.  In the case of private banks, our banking partner will pick up the documents from your home, or you can courier it to the sales manager appointed by us. If you take an education loan from NBFC, you just have to upload the documents on our website. There is no need to submit any hard copy.
    • Upon the submission of the documents, bank 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. 
    • Once the loan is approved, the student has to accept the loan offer by providing signatures on the sanction letter offered by the bank and pay the processing fees at the NBFCs. 
    • Once the student receives the sanction letter, the student & the co-applicant need to sign the agreement in 2 to 6 months depending on the validity period of the sanction letter.The student can apply for the disbursement of the loan, once the agreement is signed. 

     

    Check Your Education Loan Eligibility Apply Here

    How to decide which educational loan option is the best for you? 

    It is extremely crucial for one to select the most suitable education loan to avoid financial distress and burden in the future. Therefore, it is imperative that before zeroing in on an educational loan, students meticulously evaluate all the available loan options, their pros, and cons and their viability as per their profile. Some of the key aspects which the potential borrower should take into consideration are as follows: 

    • Interest Rate
    • Processing fee & Time 
    • Margin Money
    • Moratorium Period
    • Tax Benefits 
    • Loan Duration 
    • Expenses Covered
    • Prepayment terms and conditions

    Why Contact GyanDhan?

    GyanDhan boasts of helping thousands of students in getting an education loan for MS in the USA. If you too aspire to study MS in the USA and are confused as to which loan option is the most suitable for your profile and financial requirements, we are just a call away. We do a quick analysis of your financial requirements over the phone and help you choose the right lender out of a pool of multiple options. Moreover, you can also use our education loan focused customizable EMI calculator to calculate the EMIs and interest you will have to pay for an education loan and compare different options. Or you can simply check your loan eligibility here using our Loan Eligibility tool which provides you with the best options suiting your profile. 

    Frequently Asked Questions

    The total loan amount depends on the type of the 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 40 Lakhs (even more) depending on the co-applicant's income, target college, target course, etc.
    Education loans include several benefits such as tax benefits under section 80E, no principal amount payment during 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 yeild better interest if you invest it somewhere else smartly.
    In our experience as a loan facilitator, students easily pay their education loan after studies. However, if this is the scenario, the bank initially sends you notices. In case if you do not respond, the lender considers you as a defaulter and is liable to take thelegal actions.
    Yes, you can use both scholarship and education loan to furnish your financial requirements for studying abroad.

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