Higher Education Loans for the USA
Do you know that Indian students who wish to study in America have access to a variety of educational loans? Since the US is one of the most sought-after countries for Indian students looking for educational opportunities abroad, a conversation on student loans for US education is extremely pertinent.
Few nations in the world provide as many advantages to higher education as the United States. Most of the best universities in the world are in the US, and the job prospects in the US after graduation are unsurpassed.
While promising, American higher education is also very expensive. One of the effective options for covering such enormously high prices is to take out student loans.
You can find the best loan package for you if you conduct your research or enlist the assistance of knowledgeable loan counselors.
We will go into great detail about the various lenders, application procedures, and educational loan alternatives for Indian students who wish to study in the US in this blog.
Are student loans the best option?
An education loan gives you the readily available finances you need to achieve your goals. Even if you have savings to pay for your studies in the US, you should think about taking out an education loan because, with wise investing, you can earn more interest than you would pay for your loan.
Additionally, there are some tax advantages for student loan debt. The tax savings from an education loan over self-funding would be 4.5% under the new TCS (Tax Collection at Source) regulations. Since 1 US dollar is equivalent to more than 80 Indian rupees, this differential might be even greater for the US!
The following are a few of the top advantages of taking out a student loan to study in the US:
- Personal savings are not affected.
- Tax relief for student loans
- Individualized loan products
- Payment following graduation
- Unstressed study abroad in the US!
What should you look for while choosing a student loan?
Finding the best student loan is difficult. You need to consider a number of factors while picking the best lender.
When choosing the school loan program, you should consider a number of important factors, including:
- Interest rates
- Interdiction period
- Processor charge
- Prepayment fee
- Fixed versus adjustable interest loans in USD and INR
- Loan duration
- Loan amount
What types of student loans are available in India for studying abroad in the United States?
There are two types of student loans available in India for studying in the United States:
Secured loans for education are those that include collateral. As the name implies, in order to obtain an education loan, you must offer the lender a security interest in a piece of property.
This collateral comes in two varieties:
Tangible assets such as homes, commercial real estate, and retail spaces. Such as government bonds, life insurance, and fixed deposit accounts.
Unsecured student loans are those that lack any form of security. As the name implies, you can apply for an education 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, there are very few private Indian and foreign lenders that give unsecured education loans for amounts over INR 7.5 lakhs.
What categories of lenders provide Indian students with loans for US higher education?
There are four main categories of lenders who offer education loans to Indian students who wish to study in the US:
- Publicly traded banks
- Privately owned banks
- Non-banking financial companies (NBFCs)
- Worldwide lenders
Each lender and every aspect of the educational loans they provide—including the maximum amount that may be borrowed, the requirements for eligibility, the interest rates, the length of the payback period, etc.—will be covered in full.
What costs in the US are covered by student loans?
In India, there are numerous loan programs that can be used to pay for nearly any price besides tuition.
Some costs covered by the study loans include:
- Amount due to the college
- The cost of lodging
- Examination, lab, library, and cost
- Instruments, books, etc.
- Building money, refundable deposit, caution deposit, etc.
- Traveling costs
- Insurance deductible (if applicable)
- Laptop (if required)
- Other costs, such as thesis and study tours.
Which Indian government bank programs give the best education loans to students who wish to study in the US?
- SBI Global Ed-Vantage: State Bank of India offers student loans for the US through its Global Ed-Vantage program for Indian students. A loan between 20 lakhs and 1.5 crore is available. The loan can be taken out for a maximum of 15 years, and repayment begins six months after the course is over. You must give collateral as security in order to obtain this loan. This collateral is primarily seen as the main source of security by SBI. The profile of the co-applicant is not very significant. If you want to get SBI RiNn Raksha insurance on your loan, you can additionally receive a 0.5% interest rate discount.
- Bank of Baroda Scholar: One of the best public-sector banks for international student loans is the Bank of Baroda, which offers loans to students from all over the world, including the US. The bank has preserved a variable price structure according to the student’s profile, course, and country because it recognizes that every study abroad student is unique. The majority of the top institutions in BOB’s list are American educational institutions. For the colleges on the list, the BOB education loan offers a 100% margin, a 12-month moratorium term, and a low interest rate.
Which of India’s top private banks offers student loans for study abroad in the United States?
A few private banks in India offer loans for students who want to study in the US. The most prominent ones are:
- Axis Bank: One of the biggest commercial private banks in India, Axis bank provides loans for students who want to pursue their studies in the US. Up to INR, 50 lakhs is the highest loan amount available for unsecured loans. Typically, the interest rate is between 11% and 15% per annum. For loans up to INR 4 lakhs, there is no margin money, whereas INR 4 lakhs and above have a 15% margin. There is no prepayment penalty, and the appropriate moratorium period lasts up to 12 months following the course’s conclusion.
- ICICI Bank: Indian students can apply for both secured and unsecured school loans from ICICI Bank to study in the United States. For secured loans, the maximum loan amount is INR 1 crore, and for unsecured loans, INR 50 lakhs. The introductory interest rate is 10.5% p.a. Up to INR 20 lakhs. There is no margin money; however, INR 20 lakhs and above have a 15% margin. There is no prepayment penalty, and the moratorium period lasts up to 6 months after the course is over.
Which NBFCs are the best at providing student loans for American universities?
- HDFC Credila: The first specialized education loan provider in India is HDFC Credila Financial Services, which provides study abroad loans to more than 1000 colleges in more than 35 countries. The maximum amount for education loans from HDFC Credila without collateral is INR 50–60 lakhs. The interest rate is between 11% and 12.5% per annum. Students must pay interest during the study period, and the principal repayment process begins six months after the course is finished. There is no prepayment penalty, and the processing cost ranges from 1% to 2% of the loan amount (plus GST). A 12-year payback option is offered by HDFC Credila.
- Avanse Financial Services: Avanse Financial Services provides educational loans to 1,262 universities and more than 6,000 courses in 44 different countries. The largest loan amount from Avanse that may be obtained without any collateral is INR 50 Lakhs. The interest rate is between 12.35% and 13.65% per year. Simple interest or partial interest must be paid by students during the study time, and repayment of the principal amount begins six months after the course is finished or three months after acquiring a job (whichever is earlier). There is no prepayment penalty, and the processing cost is typically 1% of the loan amount (plus GST). The maximum repayment term for Avanse student loans is 15 years.
Which leading international lenders provide loans for higher education to study in the USA?
- MPOWER Financing: Education loans are available through MPOWER Financing for higher education in the US and Canada. Without a co-applicant or collateral, the education loan is available in USD and CAD. The maximum loan amount from MPOWER Financing without collateral is up to USD 1 lakh (INR 82 lakhs). For graduate courses, the interest rate is approximately 11.99%, whereas, for undergraduate courses, it is approximately 10.49. The payback period may last up to 10 years, and there is no buffer money required.
- Prodigy Finance: Prodigy Finance is a UK-based financial institution that provides school loans to students based only on their academic profiles and does not require any collateral or co-applicants. Depending on the destination, the study abroad loan is available in USD and EUR. The interest rate is around 13.23% APR. The payback period may last up to 20 years, and there is no buffer money required. Six months following the course’s completion, the repayment period begins. Visit Prodigy Finance Education Loan for more information.
What documentation is needed to apply for a student loan in the US?
The paperwork needed to apply for an education loan varies depending on the lender. The usual list of paperwork an applicant could require while requesting an education loan is as follows:
- For the applicant
- Identity proof can be provided through a valid government-issued identification card, such as a PAN, passport, driver’s license, or voter ID card.
- Address: A recent copy of your phone bill, electric bill, water bill, gas bill, driver’s license, or Aadhaar card.
- Passport Academic History: Undergraduate, 12th, and 10th Grade Results Admissions Test Score (e.g. GMAT, GRE, TOEFL, etc.)
- Letter of admission is evidence of admission. Cost and expense report. Two passport-size pictures.
- If there have been any prior loans from other banks or lenders, a year’s worth of loan accounting statements.
- 3 months’ worth of pay stubs if the student has employment
- Co-Statement Applicant’s
- (PAN or Aadhar or another form of identification)
- A three-month pay stub (if salaried) or business address documentation
- Most recent six-month bank statements
- Form 16 for 2 years and ITR for 2 years
- Own home evidence (E-Bill)
- Photo the size of a passport
- Mother of the applicant:
- A passport-size photo
- Aadhar or PAN card as proof of address
Consult an expert advisor to get the right plan