Education Loans To Study in USA: A Complete Guide for International Students

Highlights:

• For an education loan for USA study, students need to find cosigners who are citizens of the USA.
• Banks like SBI, and HDFC, in India, provide international student loans without any collateral.
• The average loan repayment duration is 10–20 years for international students.
• Loan for international students in the USA from unsecured banks maybe 1.5% - 4% higher than the secured loan
• To apply for a study loan in the USA, an Indian student must be a naturalized citizen, with a good CIBIL score, and a good educational background.

Each year many Indian students have to apply for education loans to study in USA. Studying in the USA can be tremendously expensive, especially for international students. The tuition fees and cost of living in USA is higher than in countries like the UK, Australia, Germany, Italy, Canada, etc. These loans can be provided by Banks, NBFCs, or even International loan providers. In most cases, applicants need a cosigner to be eligible for a student loan for USA study. If in case the student shows tremendous potential, loan providers might not ask for any collateral or cosigner. There are two types of loan for international student in USA, one is a secured loan, and the other is an unsecured loan. In a secured loan, students are offering some collateral, in their loan application. In general, Indian banks like HDFC, and SBI provide student loans to study in USA. All expense types covered in an educational loan are as follows:

• To cover tuition fees
• Airfare charges
• Living expenses like rent and food
• Books
• Essentials, and miscellaneous expenses

Types of Education Loans for Abroad University

There are two types of education loans available to students. One can be classified as a Secured loan, as this is secured with some collateral. A loan that does not require any collateral is an Unsecured Loan. The differences between the two are tabulated below:

Types of Loan Providers

Suggested below are some popular loan-providing sources, providing student loan in USA for international students. Students will seek financial services from any of the three stated below:

• Banks- This is the most common financial provider, as many students will first approach banks for their trustworthiness.
• Non-Banking Financial Companies (NBFC)- NBFCs are loan providers that offer various financial services similar to traditional banks but operate without a banking license.
• International Lenders- Many seek loans outside their home countries, at foreign banks or other lenders.

For many international loan providers, students have to show a cosigner. This would be a person who signs as a guarantor. Details of it are stated below.

Who is a Cosigner?

In the USA, a cosigner refers to a second party who will be legally responsible for the repayment of the loan amount if the borrower is unable to. This is similar to finding a guarantor or sponsor. But, finding a cosigner can be a difficult task. There are a few general guidelines international students should keep in mind during the process:

• An eligible cosigner must be a US citizen or permanent resident who has lived in the US for at least two years with a good background history.
• Must have a stable job and steady income.
• He/she must have the affordability to cover the necessary expenses.
• The income of the cosigner along with his/her total debts will be taken into consideration.

International Student Loans without Cosigner

International students who do not have any cosigner can apply directly at banks, if the requirements match, then they can proceed with the loan application. Banks like HDFC, SBI, etc are some of the biggest student loan providers in India. Stated below are some top education loan providers in India:

There are several US student loans for international study providers. The interest rates might be higher than that of loan providers in India. But the rules and regulations are more relaxed if you apply for student loan to study in USA from a foreign loan provider in USA. The maximum loan terms are also longer than that of Indian loan providers. Listed below are some of the top education loan providers outside India:

International Student Loans Repayment

Generally, the repayment period ranges within 10–20 years. Students have to be very clear about the repayment of student loans in USA for international students. Getting a job and repaying the amount is imperative. But one thing that a student needs to remember is that, the larger the loan amount, the longer the loan repayment period. So before applying for a time schedule for a loan for international students in the USA, be sure that you have a plan of repayment.

What do International Student Loans Cover?

“How much student loan do you have to apply for?” If this question is bothering you, know that you can easily find a particular university's cost of attendance on its official website. There are education loans to study abroad by the Indian government, covering up to full tuition fees or collateral security. Some of the costs covered by international student loans are described below:

Eligibility Criteria for International Student Loans in USA

Most student loans for Indian students in USA are based on a few eligibility criteria. Students have to be aware of these guidelines before applying. Though the specific eligibility rules may vary for different banks and loan providers, some basic eligibility guidelines are listed below:

• The student must be a citizen of India.
• The applicant should have an excellent academic background.
• Students applying for international loans must be of age 18 or above.
• Students must have secured admission at recognized colleges or universities in the USA or other institutions.
• F1 visa application form
• CIBIL score must not be too low
• No prior criminal record

Documents Required for International Student Loans in USA

The USA is home to more than 1 million international students coming to study at the world's top universities. Only a handful of international students secure family funds, awards, and scholarships to study in the USA to finance their education. So most have to apply for a study loan for USA. To apply, students have to submit a few important documents. This set of necessary documents along with the Loan Application Form have to be submitted for banks to evaluate a student's loan amount. The list of these documents is given below:

Documents for Students (Primary Applicant)

Whether you are applying for an education loan for masters in US, or for a UG course, you will need to assemble the documents stated below to avoid any chances of getting your loan request rejected. Also remember you have to submit scoresheets of exams to study in the USA like GMAT/GRE/SAT, etc. The documents required for an education loan US are as follows:

• Proof of personal identification (Aadhar card, voter’s ID card, valid passport or PAN card)
• Proof of residence (Driving license, Aadhar card, telephone/electricity bill)
• Age proof (Birth certificate)
• Previous academic records including

1. Mark sheet of class 10th, 12th, undergraduate degree, and postgraduate degree as applicable)
2. Certificate copies of CA, ICWA, CPA, etc.

• A copy of a valid passport
• Proof of admission
• Statement of cost of attendance Standardized score certificates (GRE, GMAT, SAT, ACT, LSAT, TOEFL, IELTS, etc.)
• Two recent passport-sized photographs.

Documents for Co-Applicants

In many circumstances, a student might have a co-applicant in the same education loan for USA study. In these situations the documents that are needed to be submitted are given below:

• Proof of personal identification (KYC documents, Aadhar card, voter’s ID card, valid passport or PAN card)
• Proof of residence (Driving license, Aadhaar card, telephone /electricity bill)
• Two recent-passport sized photographs
• Proof of Income (Salary slips of last 6 months)
• Bank documents (Account statement for last 6 months, copy of bank passbook).

Optional Documents

If you want to submit any extra or optional documents for added advantage during your education loan for MS in US application, these are some optional ones you can submit. While opting for international student loans, students must carefully go through the terms and conditions mentioned in the loan agreement before moving ahead with their decisions to study in USA. The list of these documents is as follows:

• Minority Caste Certificate issued by the Government of India
• Documents regarding any physical or mental disability or chronic illness
• Extra-curricular certificates (If applicable)

As an international student, you are eligible to get up to 100% expense coverage through educational loans based on their criteria like good academic score, CIBIL score is alright. It is feasible for students to contact their respective banking agents before applying for a student loan to know more about the terms and conditions and documentation.

FAQs

Ques: Can I get an education loan to study in the USA?

Ques: Can I get a student loan in the USA?

Ques: How can I study in the USA with a loan?

Ques: Is it better to take a student loan in India or the USA?

Ques: Can I get a US visa while on an education loan?