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Education Loans for USA

Updated on Nov 15, 2022
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For many students, studying in the United States is a dream. Unlike many European countries, the applicant pays for education at the college level in the United States and typically has quite an expensive tuition. Furthermore, your expenses will be significantly more significant if you are an out-of-state or overseas student. As a result, looking into choices for Overseas Education Loans in the United States becomes increasingly vital. Loans for foreign education in the United States are available from all financial institutions.

Table of Contents

1 Education Loans offered by Banks in India

Some of the education loan plans given by Indian banks for studying abroad are listed below:

HDFC Bank Education Loan for Foreign Education: Only Indian students who want to study abroad are eligible for this loan program. You can borrow up to INR 4.5 lacs at low-interest rates through this scheme. The amount is approved before admittance, and borrowers can take advantage of tax benefits.

SBI Student Loan Scheme: This educational loan program is available to Indian students who have been accepted into a program in India or abroad. It offers low-interest loans up to Rs.20 lakhs. Borrowers must only provide collateral if their loan exceeds Rs.7.5 lakhs. The loan is repayable for 15 years. The 12-month repayment period begins once the course is completed.

BI Global ED-VANTAGE - Education Loan for the USA: For Indian students seeking an overseas education loan in the United States, the State Bank of India offers Global Ed-Vantage. A student can receive financial aid ranging from Rs.20 lakhs to Rs.1.5 crore under this scheme, which can be returned over 15 years. The repayment period begins six months after the course ends. To qualify for this loan, all borrowers must supply collateral. SBI considers collateral to be the primary source of security. The parents' profile is also unimportant, and they have a set interest rate for all applicants interested in studying any course in the United States with no bias.

Bank of Baroda Scholar Loan: Bank of Baroda offers this education loan to Indians who want to study outside India at a low-interest rate. It also provides funding to any institute that is not included in either of the lists. Lists A and B are the two lists of institutes under the scheme. People who apply to any of the institutes listed in both lists are eligible for a loan.

The maximum loan amount granted by the scheme for institutes in List A is Rs.80 lakh, and the maximum loan amount offered by the scheme for institutes in List B is Rs.60 lakh. All loans of up to Rs.7.5 lakh must be repaid within 120 months, and a loan of more than Rs.7.5 lakh must be repaid within 180 months. 

Education Loan by the Union Bank of India: The Union Bank of India offers this education loan scheme to students pursuing their studies in India and abroad. There is no maximum loan amount that a student seeking to study overseas can obtain for international education. The maximum loan amount for NRIs is between Rs.20 lakh and Rs.30 lakh. The repayment period is set at 15 years. Only if the loan amount exceeds, Rs.4 lakh does a 15% margin apply to international schooling. Collateral is necessary if the loan amount exceeds Rs.7.5 lakhs. Students taking diploma courses at foreign colleges are not eligible for this loan.

PNB Udaan: Punjab National Bank offers this international education finance scheme. Outside India, the loan can be utilized to pursue a bachelor's or master's degree. It can also be used to study specialized degree/diploma courses offered by CPAs in the US, CIMA in London, and other organizations. The borrower's requirements determine the quantity of the loan. This arrangement allows for the repayment of loans over 15 years. One year after the course ends, the repayment period begins. The margin granted for loans is 15% if the loan amount exceeds Rs.4 lakh. You must furnish collateral if the loan amount exceeds Rs.7.5 lakh.

Canara Bank: Canara Bank offers the IBA Model Education Loan Scheme, an education loan for Indians pursuing higher education in India and abroad. The bank provides a 15 percent margin on overseas education loans, with a repayment tenure of up to 15 years. The loan can be used to complete a graduation or post-graduation program. For loans exceeding Rs.7.5 lakh, the borrower would be required to furnish security.

BOI Star Education Loan: Bank of India offers this loan scheme to students at attractive interest rates to assist them financially in pursuing an education in India or abroad. It can be used to pursue graduation, post-graduation, and some degree/diploma programs in the United States. It can also be used to study courses offered by CPAs in the United States, CIMA in London, and other organizations. The scheme provides a maximum loan amount of Rs.20 lakhs for international study. For overseas education loans of more than Rs.4 lakhs, the margin is 15%. For loans exceeding Rs.7.5 lakh, a security deposit would be required.

CENT Vidyarthi: For study abroad, the Central Bank of India gives a loan of up to Rs.20 lakhs. Borrowers who are female pay an interest rate of 8.5 percent, Male borrowers pay a rate of 9% with life insurance coverage included, whereas female borrowers pay a rate of 9%.

2 FAQs

Question 1: Which are the top private banks in India offering education loans to study in the USA?

Answer: A few private banks in India offer education loans to study in the USA. Among them, the leading ones are:

  • Axis Bank: Axis Bank offers study loans for a maximum amount of 40 lakhs as unsecured loans. The interest rate is typically between 11% to 13% per annum. Moreover, there is no margin money for loans up to INR 4 Lakhs. While for loans above four lakhs, the margin is 15%. The applicable moratorium tenure is 12 months post the completion of your course, and there is no prepayment penalty. 

  • ICICI Bank: ICICI Bank offers education loans for up to INR 1 crore that can be taken as secured loans. The maximum amount offered as unsecured loans is up to INR 40 Lakhs with an interest rate starting at 11.5% per annum. There is no margin money for a loan amounting to INR 20 lakhs. While for any amount above that, it is 15%. The applicable moratorium tenure is six months post the completion of your course, and there is no prepayment penalty. 

Question 2: Which are the top NBFCs offering education loans to study in the USA?

Answer: The top NBFCs offering education loans for the US are -

  • HDFC Credila: The first specialist education loan lender in India is HDFC Credila Financial Services. It offers education loans to study at over 1000 universities across 35 countries in the world. The maximum loan amount that can be borrowed without collateral is INR 40 Lakhs. The interest rate for this loan is between 11% to 12.5% p.a. 

  • Avanse Financial Services: One of the top NBFCs in India, Avanse Financial Services offers education loans to 1,626 universities, 1,262 colleges, and more than 6,000 courses across 44 countries worldwide. Students have to pay a simple or partial interest, which ranges between 11.75% to 16% p.a. The maximum loan amount that can be taken as an education loan without collateral from Avanse is INR 40 Lakhs.

  • InCred: InCred is an NBFC that offers up to INR 40 Lakhs as study abroad loans without collateral. The interest rate for this loan is between 11.75% to 16% p.a. Applicants will have to pay a simple interest or partial interest during the study period, and the maximum loan tenure can be up to 10 years. The processing fees for this loan are usually 1% to 1.25% of the loan amount.

  • Auxilo: A pro-education NBFC, Auxilio is another option for study abroad loans. This scheme allows a maximum loan of INR 40 lakhs that can be taken as an unsecured education loan. The interest rate is between 12.70% to 18% p.a., and the processing fees are 1% to 2% of the loan amount, including GST.

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