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A Guide to Education Loans in the USA for Indian Students

How Can I Start With USA Education Loan From Indian Without Collateral


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USA is listed as having the 10th highest cost of living among the 193 countries in the globe, according to reports. Its annual total cost of $36,564 places it third among the most costly study abroad locations.

Despite the rising costs, a sizable number of Indian students travel annually to the USA to further their education. But why? The best academic environment and accessibility of student loans for USA study are the reasons behind the answer.

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Therefore, even if you are not financially stable, you can still take advantage of the USA’s flexible academic system, cultural diversity, international reputation, distinctive curriculum, and lucrative job/internship chances with an education loan for Indian students.

Now let us plan your study abroad adventure and acquire in-depth information about international student loans in the USA.

How Do I Finance My American Study?

Is it simple to obtain a student loan in the USA? No. Due to their visa status, it can be extremely difficult for Indian students to obtain loans from conventional banks. In addition, the loan application process in the USA could appear insurmountable given your lack of credit history, citizenship, and co-signer.

There is always a solution, so do not panic. In this scenario, choosing an appropriate financing provider is the first step in obtaining an education loan in the United States for international students. The choices for international students seeking student loans in the USA are listed below.

  • Indian banks like SBI, HDFC, AXIS, PNB, and others.
  • Financial services in India like Avance Financials, Leap Finance, etc.
  • US banks and lenders like Discover, Citizen Bank, Wells Fargo, etc.

Let’s learn more about these lending organizations’ specific standards for student loans in the USA.

Banks in the USA that provide student loans.

These study loan companies in the USA offer the following loan amounts, interest rates, moratorium periods, and collateral security conditions:

Lender’s Name Offered Parameters
HDFC Bank, India Loan Amount: upto INR 20 Lakhs

Interest Rate: 9.55% to 13.25%

Collateral Security: Flexible

Moratorium Period: For selected courses

Repayment Period: upto 14 years

State Bank of India Loan Amount: INR 30 lakhs

Interest Rate: upto 2% on the current base rate of SBI

Collateral Security: From loans above INR 7.5 lakhs

Moratorium Period: Course completion + 1 year, or 6 months after getting job

Repayment Period: 1-15 years

Axis Bank, India Loan Amount: INR 20 lakhs

Interest Rate: 16.5% to 17.5%, special rates for women

Collateral Security: From loans above INR 7.5 lakhs

Moratorium Period: 6-12 months

Repayment Period: 5-15 years

Punjab National Bank, India Loan amount: As per requirement

Interest Rate: Base rate for pursuing education at top 100 universities in world

Collateral security: Flexible

Moratorium Period: 1 year

Repayment Period: 15 years

Bank of Baroda, India Loan amount: INR 20 lakhs

Interest Rate: 7.75% to 8.9%

Collateral security: Tangible above INR 7.5 lakhs

Moratorium Period: Course duration + 1 year

Repayment Period: upto 10 years for loans below INR 7.5 lakh and 15 years for above

Canara Bank, India Loan amount: INR 20 lakhs

Interest Rate: 7.80% to 9.40%

Collateral Security: From loans above INR 7.5 lakhs

Moratorium Period: 6-12 months

Repayment Period: 15 years

IDBI Bank, India Loan amount: INR 20 lakhs

Interest Rate: 8.40% to 8.75%

Collateral Security: From loans above INR 7.5 lakhs

Moratorium Period: 1 year

Repayment Period: 15 years

Avance Financial Services, India Loan amount: Customizable

Interest Rate: 13.15%

Collateral Security: Flexible

Moratorium Period: 6 months after course, 3 months after job

Repayment Period: Flexible

Discover, USA Loan amount: Based on GPA

Interest Rate: 2.99% to 13.99%

Repayment Period: Flexible

Wells Fargo, USA Loan amount: 100% cost

Interest Rate: 3.21% to 6.76%

Moratorium Period: 6 months

Repayment Period: 5-20 years

LeapFinance, India Loan amount: 100% cost

Interest Rate: 8.25% to 9.85%

Collateral Security: Not required

Moratorium Period: 6 months after job

Repayment Period: 15 years

MPOWER Loan amount: INR 16-79 lakhs

Interest Rate: 7.52% to 14.98%

Moratorium Period: 6 months after course

Repayment Period: 10 years

Prodigy Finance Loan amount: Flexible

Collateral Security: Not required

Interest Rate: 5% to 8.50%

Repayment Period: 7-20 years


Note:- Note: A borrower (student) is not required to make payments during a moratorium period. For each loan institution, this may change.

International Loan Requirements: Collateral and Non-Collateral

These student loans for American universities can be obtained with or without collateral. Let’s examine it carefully.

  • Collateral Loans:A loan given by a bank to a student that is secured by the retention of either moveable or immovable property is known as a collateral loan. Bank representatives will assess your collateral, compile a report, and then offer the foreign student loan in accordance with it.

What kind of collateral is accepted?

Any liquid assets, including shares, bonds, FDs, and immovable properties like homes, businesses, or land, are kept by the banks as collateral. Additional items acceptable as collateral include mutual fund units, gold, life insurance, government securities, shares, bonds, bank deposits, and debentures.

  • Non-collateral Loans: The collateral of a piece of property is not necessary for this education loan to study in the USA. A parent’s signature or a third party guarantee is required for this loan, which ranges in size from INR 4 lakh to INR 7.5 lakh.

Being a guarantor carries with it a lot of responsibility because, in the event that the borrower is unable to make the required repayments for any reason, the guarantor will be held legally responsible for making the payments on their behalf.

Based on the costs covered, a student should choose the form of loan. So take into account expenses beyond tuition, such as those for books, labs, and exams, as well as for study materials, travel, insurance premiums, study tours, etc.

But are taking out USA international student loans really that simple? No, in addition to choosing a suitable loan type, students must also adhere to the eligibility requirements and meet the documentation requirements.

Qualifications for an American Study Loan

Prior to submitting an application for a study loan for American university tuition, it is crucial to meet the following requirements:

  • The student must be an Indian citizen in order to apply from Indian banks.
  • The candidate ought to have an impressive academic history.
  • They must apply for admission to study-for-work programs that are technical or professional in nature.
  • They must have already obtained a position in an American university.
  • Individuals need to be older than 18 years of age.

Let’s now review the required documents.

Documents Needed to Apply for a Student Loan in the United States

In advance, banks check to see if you are a capable student who can pay back the loan amount. They may request the following list of documents for this purpose:

  • Letter of Offer from a University (proof of admission).
  • Study’s projected cost (as per I-20 form).
  • Form for requesting a loan.
  • Original transcripts and certificates of completion.
  • IELTS, TOEFL, GMAT, GRE, SAT, and other official exam records and scorecards.
  • student guarantee and residence evidence.
  • Co-borrower/guarantee IT repayment.
  • documents proving your identity and the co-or borrower’s guarantee’s PAN card.
  • Proof of income from a co-borrower
  • A copy of the student’s passport.
  • Information about the parents, guarantee, and co-assets borrower’s and obligations.

The documentation requirements should be confirmed with the specific bank or lender as they may vary depending on the size of the education loan for the USA, the type of collateral, etc.

How Can I Apply for a Student Loan in the USA?

The applicant must have a clear understanding of the required quantity of money before applying for an international student loan in the United States. Thus, three months before the visa interview, decide on the course/university, finalize the guarantee, compile a list of the necessary papers, and estimate the cost of living and tuition fees. Finally, apply for the loan. Let’s go over the steps for applying for a student loan in the USA.

  1. Prior to the start of the university admission process, choose an intake for your US education and start the loan application process.
  2. Based on the loan amount, interest rate, repayment period, processing charge, loan margin, and other factors, compare the different lenders and institutions.
  3. To guarantee the loan is taken into consideration, submit the relevant forms.
  4. Use the conditional loan offer letter you receive from the bank or lender as “proof of fund” after receiving it.
  5. To obtain permissions from the institution, visa/immigration office, financial aid organizations, etc., provide the “proof of fund” letter.
  6. You will be required to sign the loan agreement paper after presenting these records to the bank.
  7. Wait to get the loan amount.

The process is not complete once the student receives the loan money because they still need to maintain their academic standing throughout the course. Additionally, in addition to the fixed instalments or consignor management, they have other pre-payment options.



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