Education Loan for Studying in USA - Eligibility, Documents Required (2023)

Education Loan for Studying in USA - Eligibility, Documents Required (1)

The biggest challenge one always faces forstudying in the USAis to arrange for funds. Cost of living and studying in a country like the USA can be exorbitant and everyone cannot afford it. However, the aspiration to study abroad and make it big in life always drive you to overcome these hurdles. Arranging funds is one of the most crucial parts of the whole exercise. Various banks have understood this scenario and resolved the complexity of financing the higher education by giving student loans to aspirants who wish to study abroad. In this post, we will inform you about various aspects one should consider while acquiring a student loan. We will also discuss what all documents are required, how much tuition fees and other expenses a student loan covers.

Procedure for applying for an education loan

The application process for a majority of theUS universitiesstarts in October. So, one should always start the procedure of loan evaluation, loan sanction and getting solvency letters which prove as ‘proof of funds’ to the universities before this period. Loan disbursement can be done after receiving the confirmation of admission and i20 from the university. The loan evaluation can be done before the admission is confirmed. As the whole process is time-consuming, one should always start early with each exercise in order to avoid the last minute rush. After submitting your applications to the institute, while waiting for the offer letter, do not take rest and sit back. This is the time to do thorough research on loans offered by various banks. Check outhow to choose your bank for education loan to study abroad.

Compare theloans provided by different bankson the following parameters:

  • Interest rate
  • Different elements of costs it covers (e.g. tuition fee, living expenses, cost of books etc.)
  • Processing Fee
  • Income tax exemptions
  • Loan margin
  • Loan processing time
  • Prepayment terms

You can also readStepby Step Guide to Education Loans

Factors to keep in mind before applying for an education loan

Before applying for a student loan one should always have a clear idea about how much money they require and how much they are going to pay from their own pocket. Other important factors to consider before applying for the loan:

(Video) Education Loan to Study in the USA For Indian Students | Best Lender, Process & Much More

  • Finalize the course you want to pursue and the university you want to study in
  • Estimate amount you need to finance the education
  • Make a list of documents required
  • Identify the guarantor
  • Make sure to apply for the loan three months before the visa interview date
  • Estimate the time of disbursement

Documents required for securing a student loan

While giving a loan, banks also need to verify that you are a genuine student (customer) and you have secured admission in an established university, so, they can assess your capability of repaying the loan. Here’s a list of basic documents, which are usually required by the banks to process an education loan.

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

NOTE: Requirement of documents can vary as per the banks’ own rules and regulations, so it is always advised to check the list of the documents required with the respective bank.

Also read:SBI Education Loan for Study Abroad: Ultimate Guide

(Video) #USA #EducationLoan: Detailed process & must follow steps | Ep #17

Expenses covered under the education loan

Always make sure to check apart from the tuition fee what other expenses are covered in your loan scheme. There are various other things which you need to take care.Now a daysvarious loan schemes are available which cover different types of expenses other than the tuition fee. Some of the expenses coveredunderthe loan are:

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

Read:How does the proposal of levying tax collected at source will affect study abroad aspirants?

Things to Remember

  • Moratorium period:This is the time period during which the borrower need not make any repayment to the bank. This period varies from bank to bank and could last up to some time after completion of the course.
  • Loan Margin:Usually, banks do not provide the complete amount i.e. 100 percent money needed to fund the education. The majority of the public sector banks issue 90% of the total amount, the remaining 10% has to be arranged by the aspirant himself.
  • Effect of Exchange Rate:Always calculate the amount which you will be receiving at the time of disbursement, as any change in the exchange rate can affect the amount you will be receiving.

Collateral Rules

What is Collateral?

(Video) Education Loan Eligibility Criteria | What Makes You Qualify For Study Abroad Loans?? All Details

Any property whether movable or immovable, which can be offered to a bank as a security for a loan is collateral. Most Indian banks demand collateral as security in order to reduce the risk involved in paying off the credit.

Type of instruments accepted as collateral: Any liquid asset preferably shares, bonds, FD, or any immovable property like the house, any commercial property, or land can be classified as collateral. One important point to keep in mind is that agricultural land is not accepted as collateral. Even mutual fund units, gold, life insurance policy, government securities, shares, bonds, bank deposits, debentures, or bank deposits are also accepted as collateral.

Education loan without collateral

Education loan has come as a big relief to those who want to pursue quality education but face a big challenge while arranging the funds. Now students can avail a loan of up to INR 4 lacs without collateral. For loans, up to INR 7.5 lacs, parents or guardians are made joint borrower and a third party guarantee is obtained. For a loan exceeding INR 7.5 lacs property or any other asset is required as collateral.You can also contact India’s leading education loan providers throughShiksha Study Abroad.

How much can you borrow against collateral?

  • If you want to take the loan with yourimmovableproperty as collateral, in that case, the bank’s representative will verify your property and prepare a report on whether it can be mortgaged or not.
  • Also, the bank’s representative will evaluate your property. Based on this report, the loan amount will be approved.

Role of a Guarantor

Becoming a guarantor for a loan is a huge responsibility as the guarantor will have a legal obligation to pay in case the borrower defaults on his payment. If the loan amount exceeds INR 4 lacs, then the bank may ask for a guarantee from a third party. If the borrower is not able to repay the loan amount irrespective of the circumstances, in that case, the guarantor holds the liability to repay the complete amount to banks.

Eligibility Criteria

The first and foremost thing to consider is whether you are eligible to apply for the loanor not. The general eligibility criteria that are followed by all the banks are:

(Video) #Documents required for abroad #Educationloan with #Collateral | Hindi | Ep #4

  • The applicant must be an Indian citizen
  • The applicant should possess a strong academic record
  • The applicant must be seeking admission to a professional or technical course of studies. Banks always prefer giving loans for job-oriented courses.
  • The applicant must have already secured admission at the foreign university
  • The applicant must be above the age of 18 years or his/her parents will have to take the loan

Repayment

Repayment of the student loan is generally paid in equated monthlyinstallments(EMIs) for a period of 15 years for all categories of loans.

Capability Certificate

Many universities require the students to submit a certificate issued from their banks giving details of the sponsors’ financial capability. It is done in order to ensure that the sponsors are financially capable of meeting the expenses of the student going for studies. Banks issue this capability certificate after reviewing the financial and other supporting documents of the sponsors.

Indian Banks offering loansto study in the USA

Some of the loan schemes offered by Indian banks for studying abroad are:

  • HDFC Bank Education Loan for Foreign Education:This loan scheme can be availed by Indian students who wish to pursue studies abroad. The maximum amount available in this scheme is INR 20 lacs at a nominal rate of interest. Also, it offers tax benefits to the borrower and it can be sanctioned before admission as well.
  • SBI Student Loan Scheme:This scheme can be availed by Indian students who have secured admission in any institute in India or abroad. A maximum of INR 20 lacs can be availed at a nominal interest rate and it has to be repaid within 15 years. Also, if the loan amount is more than INR 7.5 Lacs, then borrowers need to furnish collateral as security. The repayment starts after one year of completion of the course.
  • SBI Global ED-VANTAGE Scheme:This loan can be availed by Indian students who wish to pursue a full-time course abroad. Students can avail a loan of up to INR 1.5 crore and have to repay it within a period of 15 years. The borrowers need to provide collateral to secure this loan and will have to start repayment after 6 months of completion of the course.
  • Oriental Bank of Commerce Education Loan for Study in India and Abroad:This loan scheme is offered to students who wish to pursue their higher studies in India or abroad. If the student wishes to pursue his studies in the US, then the amount of the loan will depend on the fee structure of the institute they have applied to. The highlight of this scheme is that it does not chargeprepaymentpenalty from the borrowers and also give insurance coverage as well. The margin for the loan amount exceeding INR 4 Lacs is 15% on the loans taken for studying abroad.

Apart from this, there are morestudent loan providers in India for study abroad.

Loans from NBFCs (Non-banking financial companies)

Apart from thenationalisedbanks, student loans can also be availed from non-banking financial companies/institutions (NBFCs). Non-banking institutions can offer complete tuition fees to the students. Borrowers need to provide collateral as security to the banks as the loan amount is generally more than INR 7.5 Lacs. NBFCs also provide non-collateral loans to students. Some of the NBFCs options are:

  • Credila:Credila is part of the renowned HDFC bank and provides loans to Indian students wishing to study abroad. The loans are given at a competitive floating rate of interest and can be repaid within a period of 10 years.
  • Avanse:Part of the DHFL group, it is considered one of the most popular non-banking financial institutions in India. Student loans from Avanse cover tuition fees up to 100% and other expenses. Apart from this, the interest rates are floating and the processingfee can go up to 1 to 2 percent of the loan amount.
  • International Student Loan Program (ISLP):This program is specially designed for international students who want to study in the US. Through this program, students can borrow amount as little as $1500 and can extend the repayment period up to 25 years. The loan disbursed under this program covers tuition fees and other expenses.
  • Global Student Loan Corporation (GSLC):The GSLC offers loans to international students to pursue their higher studies in the US without the requirement of any co-signer.

Also Check Some Popular universities to Study in USA:

  • Brown University
  • University of Maryland (UMD)
  • Johns Hopkins University (JHU)
  • Indiana University (IU)
  • University of Pittsburgh (uPitt)

Read the agreement carefully

This is one of the most important aspects to look after while taking the loan. We always suggest you go through the terms and conditions of the loan carefully and then move ahead with it. This is one factor we really stress upon, as you should always be clear with all the conditions mentioned in the loan agreement. If you have any doubt regarding anything then always consult the experts apart from the bank representative.

Get in touch with India’s top-rated loan providers and apply for an education loan through Shiksha Study Abroad

(Video) ICICI Bank Education Loans For Abroad Studies | Loans Without Collateral in 2022 | Important Details

FAQs

What are the eligibility criteria and documents required for education loan? ›

Required Documents

2 photographs of passport size. Copy of exam mark sheets of 10th/12th or latest education certificate. Statement of course expenses/cost of study. Aadhaar Card and Pan Card of the student and Parent/ Guardian.

Who is eligible for student loan in USA? ›

Most lenders require you to be a U.S. citizen or legal resident with a Social Security number. You'll also generally need to be at least 18 years old and hold a high school diploma or equivalent. Use the loan for education purposes.

What are the documents required for education loan for abroad? ›

What all documents are required for applying for Education Loan for Study Abroad?
Document typeApplicant
Date of BirthBirth Certificate, Passport, Voter card with DOB, College Passing Certificate, PAN Card, Driving license, Aadhaar Card
10 more rows

Can I get education loan to study in USA? ›

HDFC Bank Education Loan for Foreign EducationThis loan scheme is offered only to Indian students who wish to study abroad. This scheme offers a maximum of Rs. 45 lakhs as loan at attractive rates of interest. The amount is sanctioned before admission and borrowers can enjoy tax benefits on the same.

Can I get education loan without property? ›

Education loan without collateral or non collateral education loan is taken without putting any collateral as a gaurantee to the lender. That means applicant can take loan without any security such as house, land or anything. Students can take upto 50 Lakhs for their education.

What are the rules for education loan? ›

Course period + 1 year or 6 months after getting job, whichever is earlier. The loan to be repaid in 5-7 years after commencement of repayment. If the student is not able to complete the course within the scheduled time extension of time for completion of course may be permitted for a maximum period of 2 years.

What are the 4 types of student loans? ›

Keep in mind that all student loans, including federal loans, are money that you are borrowing to pay for school and must pay back with interest.
...
There are four types of federal student loans available:
  • Direct subsidized loans.
  • Direct unsubsidized loans.
  • Direct PLUS loans.
  • Direct consolidation loans.
16 Sept 2020

Who can not get a student loan? ›

Lenders may look at your employment history, credit score, debt-to-income ratio, and enrollment status at your school. One of the most common reasons why a student might not qualify for a private student loan is because they don't meet their lender's FICO® Credit Score criteria.

Do I need to pay back a loan? ›

When you borrow money in the form of a loan, you will need to pay back the loan amount plus interest within an amount of time. This repayment typically occurs over the life of your loan, whether that's three years or 30 years.

Which bank provide education loan easily? ›

Compare Top Education Loan Offers 2022
Name of BankInterest Rate (p.a.)Processing Fees
SBI7.50% onwardsUp to Rs.10,000
Axis Bank13.70% to 15.20%At the discretion of the bank
Bank of Baroda7.95% onwards1% of loan amount up to Rs.10,000
HDFC Bank9.55% to 13.25%Up to 1% of loan amount + tax
3 more rows

Which bank is best for education loan for abroad? ›

Some prominent banks that offer loan for Indian students to study abroad include public banks like SBI, Bank of Baroda, and private banks like Axis Bank, ICICI Bank, HDFC, etc. Non-Banking Financial Companies: Non banking financial companies provide secured as well as unsecured loans.

How do I repay my education loan? ›

Repayment of education loan is not a big process as such. You just need to get in touch with your bank manager who will take note of your account details and start the repayment on an auto deduction mode. You can also check out the various education loan repayment schemes available in India.

How much bank balance is required for US student visa? ›

While there are no rules requiring a minimum bank balance to apply for a student visa for the USA from India, it costs approximately $500 USD to obtain your F-1 student visa.

Is it better to take student loan in US or India? ›

It is always better to take an education loan from Indian lenders as then there is no hassle of the exchange rate, conversion rate etc. public banks like PNB, SBI etc. Provide comparatively lower interest rates than private ones. The SBI education loan interest rate varies from 11.75% to 13.50% per annum.

How much student loan can I get in USA? ›

If you are an undergraduate student, the maximum amount you can borrow each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year you are in school and your dependency status.

What is the minimum amount of education loan? ›

Education Loan Interest Rate in 2022
Interest Rate8.40% onwards
Minimum Tenure (excluding grace period)5 years
Moratorium Period (after course completion)1 years
Minimum Loan amount₹ 50,000
Maximum Loan without collateral₹ 4,00,000
1 more row

Which bank is best for education loan without collateral? ›

Top Lenders to Apply for Education Loan without Collateral

Public banks like SBI, Bank of Baroda, etc offer applicants with a loan of upto 7.5 Lakhs without collateral. Private banks like Axis Bank, ICICI Bank, HDFC, etc offer students a loan amount upto 40 lakhs without collateral.

How much study loan can I get? ›

Under education loan scheme, you can get a maximum of 15 lakhs for studies in India and more 25 lakhs for abroad studies.

How do I know if I qualify for a student loan? ›

The age of the applicant must be in the range of 18 to 35 years during applying for the loan. An applicant must have confirmed education in a recognized college/ University. An individual is required to apply for an education loan with a co-applicant. The co-applicant should have a regular source of income.

What happens to education loan if visa is rejected? ›

So, the study abroad education loans of students who re-apply for their student visa within six months of their education loan being sanctioned are not affected at any cost, unless they plan to apply to another country/course post the first rejection of their student visa.

Can I get education loan without parents? ›

"Yes, you can get an education loan but without a financial co-applicant not without a primary co-applicant!

Which type of student loan is best? ›

A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college.

What is the most common student loan? ›

Direct Subsidized and Direct Unsubsidized Loans (also known as Stafford Loans) are the most common type of federal student loans for undergrad and graduate students. Direct PLUS Loans (also known as Grad PLUS and Parent PLUS) have higher interest rates and disbursement fees than Stafford Loans.

How much student loan can I get per semester? ›

If you're an undergraduate, the maximum combined amount of Direct Subsidized and Direct Unsubsidized Loans you can borrow each academic year is between $5,500 and $12,500, depending on your year in school and your dependency status.

Why do student loans get rejected? ›

Unfortunately, it's common for would-be borrowers to be denied loans, and there are a number of factors that could lead to loan denial. Your credit history, current credit score, insufficient application information, or a whole host of other issues could cause you to be rejected for a loan.

Can I get a student loan without a job? ›

Student loans without a job could fill in the gaps or pay the entire costs. Students may seek a loan from a private lender. You may also be eligible for federal aid if you qualify. Private loan lenders may offer student loans even if you're unemployed or if you have bad credit history.

Are student loans easy to get? ›

Overview: Most federal student loans don't require a credit check, so these loans are easily the best option for students with poor credit or no credit history. Federal student loans also come with competitive interest rates, and you may choose from a variety of repayment options.

How much is a 25000 loan payment? ›

The monthly payment on a $25,000 loan ranges from $342 to $2,512, depending on the APR and how long the loan lasts. For example, if you take out a $25,000 loan for one year with an APR of 36%, your monthly payment will be $2,512.

What happens if I don't pay my loan? ›

If You Don't Pay

You'll eventually default on that loan if you stop making payments. You'll owe more money as penalties, fees, and interest charges build up on your account as a result. Your credit scores will also fall.

Do loans go into your bank account? ›

When you take out a personal loan, the cash is usually delivered directly to your checking account. But if you're using a loan for debt consolidation, a few lenders offer the option to send the funds directly to your other creditors and skip your bank account altogether.

Which bank provide education loan easily? ›

Compare Top Education Loan Offers 2022
Name of BankInterest Rate (p.a.)Processing Fees
SBI7.50% onwardsUp to Rs.10,000
Axis Bank13.70% to 15.20%At the discretion of the bank
Bank of Baroda7.95% onwards1% of loan amount up to Rs.10,000
HDFC Bank9.55% to 13.25%Up to 1% of loan amount + tax
3 more rows

Can I get education loan without parents? ›

"Yes, you can get an education loan but without a financial co-applicant not without a primary co-applicant!

Can I get 20 lakhs education loan without collateral? ›

Collateral Required for Education Loan

20 lakh for programs abroad. According to the rules, collateral security is not needed for loans up to Rs. 4 lakh. Only when the loan surpasses a predetermined sum determined by the bank will collateral and a third-party guarantee be necessary.

Can I get education loan without ITR? ›

The co-applicants' ITR documents of at least 2 years is a mandatory requirement to be able to borrow an unsecured education loan from InCred.

How do I repay my education loan? ›

Repayment of education loan is not a big process as such. You just need to get in touch with your bank manager who will take note of your account details and start the repayment on an auto deduction mode. You can also check out the various education loan repayment schemes available in India.

Is it difficult to get education loan? ›

Easily available: Education loans are widely and easily available. In fact, they are a priority product in all banks as per the RBI's guidelines. Varied loan amounts: Banks can offer loans anywhere between Rs. 2 lakh and Rs.

What is the minimum amount of education loan? ›

Education Loan Interest Rate in 2022
Interest Rate8.40% onwards
Minimum Tenure (excluding grace period)5 years
Moratorium Period (after course completion)1 years
Minimum Loan amount₹ 50,000
Maximum Loan without collateral₹ 4,00,000
1 more row

Which bank is best for education loan abroad? ›

Top Education Loan Providers in India to study abroad
Name of BankLoan AmountRate of Interest per Annum
State Bank of IndiaUpto 1.5 crores10.5%
Allahabad Bank50 lakhs7.15% to 10.5%
Axis Bank40 lakhs and beyond depending on requirementUpto 4 lakhs- 15.2% Upto 7.5 lakhs- 14.7% Above 7.5 lakhs- 13.7%
HDFCUpto 30 lakhs14%
8 more rows
26 Sept 2022

How much study loan can I get? ›

Under education loan scheme, you can get a maximum of 15 lakhs for studies in India and more 25 lakhs for abroad studies.

Who can be a guarantor for student loan? ›

Between 18 and 65 years old. Guarantors over ages sixty five (65) may be accepted on a case by case basis based on their financial capabilities and fulfilling other stated criteria. Gainfully employed – whether formally or self-employed. In Possession of a Tax Registration Number (T.R.N.)

How long does student loan take to process? ›

From the time you submit your application until you receive funds, plan on around three weeks to get a private student loan in the best-case scenario — or up to two to three months in case of delays. Private lenders have their own rules for approving loan applications.

Who is eligible for SBI education loan? ›

SBI Education Loan Schemes
EligibilityShould be an Indian national residing in India.
Student should have secured admission in a premier institute as set by SBI.
Moratorium PeriodCourse Period with additional 1 year
Expenses CoveredFee payable to College or University, Hostel charges.
10 more rows
15 Jul 2021

Do we need guarantor for education loan? ›

As most students have no previous credit history, the parent or guardian has to co-sign for an education loan as a guarantor. Moreover, education loans also require key lender approved collateral such as property documents, fixed deposits, etc.

Is salary slip required for education loan? ›

Documents Required from Co-applicant (if salaried):

Last 3 months salary slips or salary certificate on employer's letterhead. Last 2 years Form 16 from employer or last 2 years Income Tax returns. Any other income proof that is not reflected in the above mentioned documents.

Can I get loan without income proof? ›

Ans: No, without income proof you cannot avail personal loans. You will need to provide bank statements as proof of your income.

Is 12th marks important for education loan? ›

Taking an educational loan from public banks like SBI, PNB, etc, have list of requirements, which includes minimum percentage of 60% in 12th (if you have more, your chances increases), an offer letter from college/university, then how much is your loan requirement if it is above 7.5 LPA, then you need collateral.

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