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Education Loans In The USA

The United States of America is a hot destination for students wishing to pursue higher education and improve their career prospect. Data derived by Statista indicates that 948,519 students worldwide studied in the USA only in 2022-2023. The US education system is key to this level of folks opting to study abroad, the US education system offers career oriented degrees along with high level of post-study placements. This number continues to grow due to the rising demand for jobs and high employment levels in the USA. One reason for this is the high acceptance of US degrees worldwide. 

Often, students who have studied and achieved a degree in the USA are considered excellent candidates and receive a high level of employment. However, high demands incur high costs. The USA is also known for its high tuition and living costs. Meanwhile, loans consistently bridge the gap between a good education and rising costs. In India, banks, government subsidies, and NBFCs make it easier for students to get student loan USA.

The first and foremost step after you have researched to get an abroad education loan is to prove your eligibility with the help of documents. You can create a document checklist to help with this. There are specific criteria that a prospective student must meet; they are mentioned here: 

1. The applicant must be an Indian citizen to get an education loan for MS in USA or for degree level.
2. The candidate must be looking to enrol in a professional or technical programme. Banks always prefer loans for career-focused programmes.
3. The candidate should have a remarkable academic history.
4. The applicant must already be enrolled in an International university.
5. To receive a loan, the borrower must be older than 18; their parents will be required to do so.

The above criteria are the basic standard most institutions follow, although reviewing their respective eligibility requirements is necessary to understand the process correctly.

Banks must first confirm that you are a legitimate student (user) and have been accepted to a reputable university to determine your ability to repay the capital for a USA student loan. Here is a list of the documents that banks typically demand to process for student loans USA.

• Loan application form (filled)
• An offer letter is given by the university (proof of admission)
• The estimated cost of study (as per the I-20 form)
• Documents of qualifying exams (GMAT, TOEFL)
• Original education certificates/mark sheets
• Residential Proof of student and co-borrower
• PAN card and other identity proofs of student and co-borrower
• IT returns of co-borrower
• Proof of income of co-borrower
• Details of assets and liabilities of parents/co-obligates/guarantors
• Passport copy

Note: It is always recommended to check the list of required documents with the specific bank, as document requirements can vary depending on the bank's laws and regulations

Always verify what other expenses, including tuition, you cover. There are numerous more things for which you must watch out. Nowadays, several student loans are available to pay for expenses besides tuition. Some of the costs paid are:

• Examination, laboratory fees, library
• Fee expected for college and hostel
• Purchase of books, instruments, equipment
• Travel expenses
• Caution deposit, refundable deposit, building fund
• Insurance premium for the student (if applicable)
• Other expenses like study tours, thesis, project work
• Purchase of laptop (if required for the course)

Students must be well-versed in the type of loans they want to take out. Generally speaking, there are two types of education loan for USA study: 

Secured Education Loans:

Loans with collateral are known as secured loans. As the name implies, you must offer the lender a security interest in a piece of property to obtain a loan. This collateral comes in two varieties:

• Tangible assets like apartments, non-agricultural land, stores, etc.
• Intangible assets include government bonds, life insurance, and fixed deposit accounts.

Unsecured Education Loan:

These need more forms of security for student loan USA. As the name implies, you can apply for a student loan without giving the lender any collateral. However, a co-applicant is required, and that co-income applicant will play a significant role in whether the loan will be approved. Additionally, only a few foreign and private Indian lenders offer unsecured loans for sums more significant than INR 7.5 lakhs*.

Understanding an overseas student's average annual cost of living in the USA is crucial. One has to consider factors such as tuition, travel, dining out, groceries, etc. The following tables show the expected cost of living for students in the USA depending on various expenses. Students must consider that this cost will fluctuate depending on their circumstances and habits. 

Selecting one bank for such a big decision must be challenging, as several top-notch and world-class universities are out there. These might be expensive for some students, too. Thus, an expert can help you find the best solution. Also, attending school abroad can be costly without a loan or scholarship. How can students choose the best loan provider when so many options are available? Let us see here,

1. Understand the loan: Students must know what type of loan they are getting, whether secured or unsecured. 

2. Be confident about the targeted college: They must research the authenticity of the college and its post-study prospectus. 

3. Consider the advantages and disadvantages of the loan: Students must consider all factors when selecting a long-term loan with interest rates. 

4. Study all the available options: They must weigh the advantages and disadvantages of getting a loan. 

5. Confirm the grace period: A loan with a moratorium period will help the student find a safety net ahead of time. 

6. Pick the right repayment option if available: Students must understand the long-term repayment strategy.  

7. Ask questions: You must consult the loan executive for every detail on the terms and conditions. 

UniCreds, unlike any other platform, makes securing student loans manageable. Here are some of the reasons we are the best choice:

Getting an education loan might take months or even weeks. However, paying off education loans is a lifetime concern as it may take up to 20 years. The prospective student must be well aware of the repayment process as well. After completion of the course of study, students will either have a moratorium period or not, depending on the terms and conditions of their loan. They will then have to follow the process to pay off the loan. Students will need to be aware of the following factors while prepping to pay off the loan:

• A student must be aware of the education loan repayment calculations: They must calculate the amount of each EMI compared to the number of EMIs to be paid in the timeline. 
• A student must be aware of the education loan repayment modes: they must note how, when, and how much of the loan amount to repay in the duration. 
• Students must adequately plan their loan management: Learn tips and hacks to maximise the loan scheme features by consulting their experts. 

Students can often get a swift education loan when they apply to top-ranked universities. QS ranking is one such data point that the banks actively refer to. Check out some of the elite universities and their rankings in the USA.

The USA, as well-known, is a trendy choice among Indian  students looking to further their education. While the popularity of STEM courses in the USA is widespread, many universities offer a broad range of courses for students to choose from. Here are a few of the top ones:

The F1 Visa is the most common option for Indian students heading to the USA for higher education. However, as international students, fulfilling a set of requirements and submitting the relevant documents to apply for a student visa is mandatory. The requirements may vary based on the student; here’s a list of requirements students must take note of - 

1. University Certification: The institute where the student has enrolled must be certified or authorised by SEVP Immigrations & Customs Enforcement. 

2. Enrollment Status: The applicant must be enrolled at their university full-time when their semester is in session. 

3. Language Proficiency: Most universities in the USA have their set of standardised scores for English Language. Applicants need to meet the language proficiency requirements set by their designated institution. 

4. Funding: Students must also provide evidence of sufficient funds to finance not only their studies but also their living expenses when studying in the USA. 

5. A Valid Passport: While many students may carry a passport, it is crucial to ensure it is valid for at least six months after course completion.

6. Home-Country Residency: Applicants must show proof of residence in their home country to return after completing their degree.

Several Government Bank Schemes and private programmes are available to assist Indian students. If you meet all the eligibility criteria and present the documents on time, you can apply for the loans effortlessly! Some of the top government-involved and subsidised loans are mentioned here for student loan for the US:

SBI Global Ed-Vantage Education Loan USA

State Bank of India is one such bank that helps students efficiently study abroad. All they have to do is to apply for the loan scheme well in advance with proper documentation. The name of this scheme is SBI Global Ed-Vantage. They have loans with collateral, which is a critical part of the sanction cycle. 

The scheme doesn’t consider the co-applicants' profile as necessary compared to other banks and NBFCs. If you opt for the SBI RiNn Raksha insurance loan, you may also get a concession on the interest rate (there are regular fluctuations in such concessions). As part of this scheme -

• A prospective student can apply for a loan between INR 20 lakhs and INR 1.5 crores for their desired field of study.
• The repayment process can last for a maximum loan tenure of up to 15 years.

Bank Of Baroda Scholar

Considered one of the top public-sector banks for students seeking an education loan, Bank of Baroda offers varying price schemes based on the student’s profile, course, and country. To determine if you can apply for a USA study loan via the Bank of Baroda Scholar scheme, it is recommended that you check if the university you are enrolling in is registered with BOB or not. As part of this scheme -

• You can avail of a 100%* margin for the scheme’s listed colleges for education loan in USA for Indian students
• You can benefit from the 12-month* moratorium period
• You can also apply for a best-interest education loan USA.

PNB Udaan
 

Whether you’re looking to study diploma courses or degrees, PNB Udaan has a loan scheme for everyone. The maximum loan amount depends on the requirements the applicant fulfils after a thorough profile evaluation. After applying and getting a sanction for this loan, one must note that they will get a one-year moratorium period until the repayment period begins in student loan USA.

Oriental Bank Of Commerce Education Loan Scheme
 

Oriental Bank Of Commerce offers education loans for studies in the USA to students who meet all the eligibility criteria. The education loan amount may differ based on the designated university's fee structure. If the loan amount happens to be over INR 4 lakhs, the margin would be 15%* on the education loan. The maximum loan tenure would be 15 years* with this scheme, and the repayment period begins upon course completion of the study loan for USA. 

Private Banks Offering Education Loans To Study In The USA

Private banks are the most preferred option after the government or public banks. Generally, they have a higher but feasible interest rate. Private banks also have strict eligibility criteria that the students must meet. If you are looking for one, the following banks must be on your list to research a list of lenders for your loans. Or you can leave this challenging process to UniCreds experts! Contact us to know how to get student loan for the USA in easy steps. 

Axis Bank

Axis Bank, one of India's leading commercial private banks, provides education loans for students studying in the United States. Unsecured loans have a maximum loan amount of INR 50 lakhs. Axis Bank gives education loan for masters in USA as well as graduate degrees.

The interest rate fluctuates typically between 11%* and 15%* per annum. There is no margin money for loans up to INR 4 lakhs. However, it is 15%* for loans over INR 4 lakhs. There is no 

prepayment penalty, and the appropriate moratorium period is up to 12 months* after completing the course under a student loan for USA.

ICICI Bank

Indian students can apply for secured and unsecured education loan USA with ICICI Bank. The maximum amount for secured loans is around INR 1 crore, whereas for unsecured loans, it is INR 50 lakhs. There are also fluctuating interest rates for ICICI Bank education loans. 

The interest rates start at 10.5% p.a*. If you take a loan below INR 20 lakhs*, there is no margin money, as opposed to a 15%* margin rate for loans above INR 20 lakhs*. Fortunately, there is no prepayment penalty, and the moratorium period is six months after completing the course.

IDFC First Bank

As with most private banks, Indian students can opt for secured loans with no upper limit or unsecured loans up to INR 50 lakhs to study in the USA with IDFC. For unsecured loans, the interest rate stands at 11%*, while there is a processing fee of around 1.5%* for the IDFC education loan. The repayment tenure lasts 12 years* with a one-year moratorium period that begins after the course completion.

If a student is not eligible for private and government loans and subsidies, they can apply for a Non-Banking Financial Company loan, an NBFC loan. Some of the top lenders in NBFCs are Avanse, Auxilo, MPower and InCred. The table below can help you understand a brief comparison between student loan USA offered by them. NBFCs can also offer loans without collateral, given you have a well-maintained credit score or a co-signer with an excellent credit history.