According to recent reports, the United States of America ranks 10th among the nations with the highest cost of living in the world. Additionally, it is the 3rd most expensive study-abroad destination, with an annual total cost of $36,564. Despite the high expenses, there is a significant number of Indian students who travel to the USA every year to pursue their education. The reason behind this trend is the country’s academic excellence and the availability of education loan for USA.
Additionally, studying in the USA can offer a gateway to better career opportunities and higher earning potential. It is no surprise that many students are willing to take on the financial burden of studying in the USA, considering the potential long-term benefits.
Fortunately, there are various options for education loans available for Indian students who wish to pursue their studies in the USA. These loans for studying abroad can cover tuition fees, living expenses, and other miscellaneous expenses. With the right financial planning and support, Indian students can fulfill their dream of studying in the USA and gain a world-class education that will benefit them for years to come.
How to Finance Study in the USA?
Financing education in the USA may not be an easy task for Indian students, as traditional banks might find it challenging to lend to students with visa status and no credit history or co-signer. However, there are various lending sources available for international students to obtain an education loan in the USA. The key is to select a suitable lending source that caters to the specific needs and requirements of the students.
Several options are available for international students seeking student loans in the USA, including Indian banks such as SBI, HDFC, AXIS, PNB, and others. Financial services in India like Avance Financials and Leap Finance, among others, can also be considered. Additionally, US banks and lenders like Discover, Citizen Bank, Wells Fargo, and many others offer education loans to international students.
Documents required: Study Loan For USA
The following is a list of essential documents that are typically required by banks to process an education loan:
- Admission offer letter from the university
- Completed loan application form
- Estimated cost of study (as per the I-20 form)
- Original education certificates/mark sheets
- Documents showing qualification in exams such as GMAT, TOEFL
- Proof of residence for the student and co-borrower
- Co-borrower’s income tax returns
- PAN card and other identification documents of the student and co-borrower
- Proof of income of co-borrower
- Passport copy
- Details of assets and liabilities of parents/co-obligates/guarantors
Eligibility Criteria for Education Loan for USA Studies:
To be eligible for a study loan in USA education, certain criteria need to be fulfilled, including:
- The student must be an Indian citizen to apply for loans from Indian banks.
- The applicant must have a strong academic record.
- They must seek admission to technical or professional study programs that are job-oriented in nature.
- They must have already secured a position at a university in the USA.
- The applicant must be at least 18 years of age.
Top Loan Providers for Student Loan for USA
- HDFC Credila
- Avanse education loan
- InCred Student Loan
- Bank of Baroda
- Axis Bank
- Auxilo
- ICICI Bank
- Prodigy Finance
- Mpower Finance
- Credence
- IDFC First Bank
Expense covered under Education Loan USA
It is important to note that the specific documents required may vary depending on the rules and regulations of individual banks. Therefore, it is advisable to confirm the necessary document list with the respective bank.
When considering an education loan, it’s important to understand what expenses are covered beyond just tuition fees. Many loan schemes now cover various types of expenses related to your education. Some of the expenses that can be covered under an education loan include:
- Fees for college and hostel
- Examination, library, and laboratory fees
- Purchase of books, equipment, and instruments
- Caution deposit, building fund, and refundable deposit
- Travel expenses
- Insurance premiums for the student, if applicable
- Purchase of a laptop (if required for the course)
- Other expenses such as study tours, project work, or thesis expenses.
How to Apply for Student Loan for the USA
It’s essential to carefully review the loan agreement to ensure you have a clear understanding of what expenses are covered by the loan scheme. This will help you to plan your finances and manage your budget accordingly.
To apply for an international student loan in the USA, the applicant should have a clear understanding of the required loan amount. They should finalise the course and university, estimate the cost of living and tuition fees, make a list of required documents, and finalize the guarantor. It is recommended to apply for the loan at least three months prior to the visa interview. The following are the steps on how to apply for a student loan in the USA.
Choose the intake for your US education and start the loan process before the university’s application procedure starts.
- Compare different lenders/banks based on the loan amount, interest rates, repayment period, loan processing time, loan margin, processing fee, and other factors.
- Submit the required documents to complete the loan application.
- After receiving a conditional loan offer letter from the bank/lender, use it as proof of funds.
- Share the proof of funds letter to get approvals from the university, visa/immigration office, financial aid institutes, etc.
- Upon showing the documents to the bank, the applicant will be asked to sign the loan agreement document.
- Wait for the loan amount to be disbursed.
FAQs
1.What are some challenges that students may face when applying for education loans in the USA?
Although it is relatively easy to apply for education loans to pursue studies in the USA, students may encounter complex application processes, undisclosed fees, and confusing interest rates.
2.What is the typical loan margin provided by banks for study abroad loans?
Banks and lenders typically offer 90% of the total loan amount, with the remaining 10% to be arranged by the student.
3.How can students repay their study loan amount?
Students can usually repay the loan amount in installments after completing their course, with a repayment period ranging from 15 to 25 years. The installment amount and repayment period may vary based on the bank, lender, and type of loan.
4.What is the most important factor to consider when applying for an international study loan?
Students should carefully review the terms and conditions of the loan agreement before signing it. If they have any questions or doubts, they should seek advice from experts other than bank representatives.
5.What is the maximum loan amount that a student can receive for studying abroad?
A: Students can receive a loan ranging from INR 4 lakhs to 40 lakhs, depending on their requirements. Some private banks and lenders may offer higher amounts with specific terms and conditions.
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