Education loan for studying in USA

Ultimate guide: Education loan for studying in the USA

Education loans for the USA have become a necessity because the cost of studying abroad is incredibly expensive. Every year Indian students travel to the USA to pursue their education in the top universities.

Only some of them manage to arrange the funds, as the rest of them have to rely on education loans. 

Several banks and NBFCs in India are offering education loans to interested students at reasonable rates to study in the USA.

 It is essential to note that most banks do not provide 100% money for funding overseas education as 10% of the total amount has to be arranged by the aspiring student.

Before applying for the loan, students should check the website of the desired university and know about the living expenses and fee structure to determine the actual amount they will need.

They can use the loan eligibility calculator on the EduFund app to get a better idea about the amount they would be eligible to receive from a bank.

Education loans for the USA offered by banks 

  • HDFC Bank Education Loan for Foreign Education – The scheme offers tax benefits, and the maximum loan amount offered is INR 20 lakhs.
  • Oriental Bank of Commerce Education Loan for Study in India and Abroad – The loan amount depends on the fee structure of the university.
  • SBI Student Loan Scheme – The maximum loan amount offered under this scheme is INR 1.50 crore, repaid within 15 years. Collateral is a must if the loan amount is more than INR 7.5 lakhs.

Education loans for the USA offered by NBFCs

  • Credit – the loan is offered at a floating rate of interest for 10 years.
  • Avanse – interest rates are floating, and the processing fees are between 1 – 2% of the loan amount.
  • Global Student Loan Corporation – this scheme does not require a co-signer.

Eligibility of education loan for the USA

  • The applicant must be a citizen of India.
  • The co-applicants must be Indian citizens.
  • The applicant must be 18+ years and above.
  • Confirmed admission to a credible university in the USA.
  • Strong academic record.
  • Banks give preference to students studying technical or professional courses.

Documents required to apply for an education loan

  • Properly filled application form.
  • Admission letter from the university.
  • The estimated cost of study.
  • ID proof of the applicant and co-applicant.
  • Address proof.
  • Passport-size photographs.
  • Income proof.
  • Passport copy.
  • School and university mark sheet.
  • Documents of the qualifying exams like TOEFL, GMAT, etc.
  • Foreign exchange permit letter.
  • A brief statement of the assets and liabilities of the co-borrower/ guarantor/parents.

Expenses covered under the education loan

  • Tuition fees.
  • Hostel fees.
  • Caution fees.
  • A refundable deposit and building fund.
  • Laboratory, library, and examination fees.
  • Cost of uniforms, books, instruments, and equipment.
  • Cost of laptop if required.
  • Traveling expenses.
  • Insurance premium if applicable.
  • Other expenses like projects or study tours.

Repayment of education loan

The terms of repayment of the education loan for the USA start after six months or one year once the borrower has secured a job or their course is complete, whichever comes first. 

Tax Benefits

Loan applicants can claim tax benefits and deductions only on the interest paid for seven consecutive years and not the principal loan amount under Section 80E of the Income Tax Act. 

Additional read: Education loan for studying in Canada

Factors to keep in mind before applying for the education loan

  • Finalize the course and the university where you want to study. 
  • Check the appropriate website to know about the required amount.
  • Factor in all the expenses.
  • Get an estimate of the total loan amount you will require.
  • Make a list of required documents.
  • Select a guarantor or a co-signer.
  • Estimate the time of disbursement.
Ultimate guide Education loan for studying in USA

How to apply for an education loan 

  • The process of securing an education loan is time-consuming, so it is advisable to apply at the earliest possible moment. 
  • Visit the representative of the financial institution.
  • Check whether the study course is recognized as valid.
  • Compare the loans provided by different banks and NBFCs based on the following parameters.
  1. Interest rate.
  2. Processing fees.
  3. Tenure or loan processing time.
  4. Expenses that are included in the education loan.
  5. Loan margin.
  6. Repayment terms.

Start the education loan process immediately after submitting the application form for admission to the university.  Apply for the education loan at least three months before the date of the visa interview, as it takes time to process the education loan.  


An education loan for the USA is the best possible alternative for students who are unable to procure the required funds or scholarships for their studies in an overseas country. It helps to overcome the financial barrier of funding. 

Our experts on the Edufund app can help with loan schemes up to 1 crore both in the USA and India so that you can make an informed choice.

Choose from banks and NBFC partners where you do not require collateral for an amount up to INR 75 lakhs. The loan rates are low, and there are no hidden charges for a hassle-free loan approval process.

Consult an expert advisor to get the right plan

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