Education Loan for Studying in USA - An Overview

United States of America (USA) is one of the most preferred study destinations by the students who aspire to pursue their higher education abroad. And hence naturally, there is a variety of options available for student loans for studying abroad. Right from government to university scholarships, to bank loans and NBFCs, students can choose from a wide pool of available options to fund their overseas education.

In this article, we are going to take you through the possible loan options that you can avail for your higher education abroad.

Types of available loan options for studying in USA

Overseas education aspirants who are willing to apply for an education loan for studying in USA, can opt for any one of the two available options i.e Secured Overseas Education Loan and Unsecured Education Loan to Study in USA. These loans are offered by Nationalized Banks, Private Banks, International Lenders and Non-Banking Financial Company (NBFC).

The Secured Loan option is available for all levels of courses whereas an Unsecured Loan option is available only for the students who are applying for STEM courses. There is no specific age criteria to be eligible for secured loan whereas for unsecured loan a student must be at least 28 years of age. However, there are few parameters that a student must fulfil to be eligible to apply for secured and unsecured loans. Let us know what those parameters are.

General Eligibility Criteria for Secured Loan

Student should have scored minimum of 55% in the previous qualification with less backlogs.
There is no specific income criteria for secured loan. A student can get the loan even if his/her parent’s annual income is up to 1 lakh.
Student’s parents’ CIBIL score should be above 650 with strong credit history.
Student should have their own house in city limit areas (urban property). It can be a residential house, open land, shop, flat etc.
Agriculture land is not acceptable as a security by banks as it falls under rural area.

General Eligibility Criteria for Unsecured Loan

Student should have scored any one of these - 300, 90 or 6.5 in GRE, TOEFL or IELTS respectively.
The average annual income of the student’s parent should be between 5-6 lakh with no liabilities.
Students should be applying for STEM and management related courses.
Student should have minimum of 60% in the previous qualification with less backlogs and no academic gap.
Only PG diploma or Maters students are eligible for this loan.
Student’s parents’ CIBIL score should be above 700 with strong credit history.
Student should be less than 28 years of age.
Student should have his/her own house.

Pre-admission loan

As the name itself suggests, Pre-Admission loan is a type of loan that allows the student to apply for the loan based on their score in International Entrance Test (GRE). Even if the student has appeared for GRE six-nine months prior from the commencement date, they have an advantage of applying for pre-admission loan.

For pre-admission loan, students can apply at NBFCs and International Lenders like Auxilo, Avanse, Credenc, InCred, Credila and MPower Finance, Prodigy Finance, respectively. For applying at Nationalized banks, students should have I-20 for processing of the loan application. Listed below are few points that should be kept in mind while applying for pre-admission loan.

Students who are looking forward to apply for an Unsecured Loan can also apply for pre-admission loan at NBFCs.
Pre-admission loan is given to the students based on their GRE score. Hence to apply for this type of loan, a student should have scored exceptional marks in GRE to get the loan letter sanctioned.
After getting the loan letter sanctioned, students can proceed for issuing the I-20. For that, they must submit the required information about sources of funding, financial affidavit, bank statements, government scholarship letters. Post the successful acceptance of these documents, the university issues the I-20 to the admitted students.

Overseas education aspirants can avail foreign education loan based on their academic and financial profile however if they possess any kind of work experience in the relevant field, it will serve as an added advantage.

We have tried to cover a brief about the possible loan options available for study abroad aspirants so that you can be assured and send your online loan application for abroad studies. If you require any kind of assistance during the complete loan process, do reach out to us. We will be happy to assist you.