The USA is one of the most popular places to study abroad because it offers top-notch universities that provide both lucrative career opportunities and high-quality education. Because study costs in the USA tend to be a little higher than average, financing education can be difficult but not impossible. The loan applicant can receive a successful loan sanction letter with the correct advice and a well-considered loan decision.
Therefore, this article contains all the information you need if you are a loan applicant looking for an education loan to study in the USA. To learn more, continue reading.
Financial Organizations that Offer Student Loans for Education in the USA
The requirements for qualifying for a foreign education loan vary amongst financial institutions. Let’s examine it in more detail.
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Nationalized Banks
If you need a large loan amount, nationalized banks might be your best bet. These banks offer secured loans up to ₹ 1.5 cr or more, dependent on the applicant’s security pledge and requirements. In contrast, nationalized banks offer lower interest rates. Once they have received a letter of acceptance from the US university, students can proceed with taking out an education loan.
Leading Nationalized Banks Providing Education Loans to Study in the USA
- State Bank of India
- Bank of Baroda
- Bank of India
- Union Bank of India (Provides both secured and unsecured education loans)
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Private Banks
Private banks offer student loans that are both secured and unsecured. Nonetheless, students enrolled in STEM courses are primarily eligible for unsecured loan options. A secured loan of up to ₹ 75–1 Cr and an unsecured loan of up to ₹ 50 lakhs can be given for studying in the USA.
Leading Private Banks Providing Education Loans to Study in the USA
- ICICI Bank
- Axis Bank
- IDFC First Bank
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NBFCs
Students prefer non-banking financial companies, or NBFCs for short, because they can borrow up to Rs 50 lakhs without requiring collateral to study in the United States. The best thing about NBFCs is that they offer 100% funding and pre-admission loans, even though their interest rates are a little higher.
Leading NBFCs Providing Education Loans to Study in the USA
- HDFC Credila
- Avanse
- Incred
- Auxilo
- Credenc
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International Lenders
Education loans specifically for US students are offered by international lenders, who disburse the loan amount in US dollars. Students can obtain loan sanctions for universities supported by foreign lenders based on their GRE, IELTS, and TOEFL scores. The lending procedure is simple and quick. Depending on the student’s qualifications and profile, a loan of up to $100,000 may be offered. Collateral or a co-signer are not required.
Leading International Lenders Providing Education Loans to Study in the USA
- MPower Finance
- Prodigy Finance
- Leap Finance
Understanding of Collateral Types to Get an Education Loan for MS in USA
In-depth knowledge, practical experience, and a global perspective are all goals of the Master of Science (MS) programs offered in the US in a variety of subjects, including biology, chemistry, engineering, health sciences, statistics, and data sciences. The real conundrum is deciding where to get this degree, and the USA is a great option with lots of prestigious universities.
Obtaining a master’s degree in the US is unquestionably an incredible journey with a ton of opportunities. However, the financial barrier can be intimidating. In India, foreign education loans serve as a vital link between aspirational students and those who are unable to finance their higher education overseas. On the other hand, you must pledge collateral in order to receive a secured education loan.
In this process, knowing the different kinds of collateral security is essential. We shall examine the various forms of collateral security for educational loans for MS in the USA in this article. So pay attention as we continue to explore.
Cost to Study MS
In the United States, private universities are more expensive than public ones, but it’s vital to understand that the benefits they offer outweigh the costs. To put an approximate figure on it, a Master’s degree in the US typically costs between $20,000 and $35,000. The cost varies based on the university and program that you select.
The most sought-after master’s degrees by a large number of students are those in software engineering, computer science, data science, etc. These programs provide you with additional advantages like hands-on training and more in addition to a strong education. Let’s now proceed to comprehend the various forms of collateral security that can be used to obtain an education loan to study for an MS in USA.
What is a Collateral?
Put simply, collateral is an asset of value that is pledged to the lender as security, making sure that in the event of financial difficulties, there is enough collateral to cover the amount borrowed. There are many options available as collateral for master’s degree candidates in the United States. Every asset, including a place to live, fixed deposits, life insurance, and other investments, has a special significance and function in obtaining a secured student loan.
Types of Collateral for Overseas Education Loans
When applying for an education loan, borrowers usually have a selection of collateral types from which to choose. They are mentioned below.
Immovable Property
Common collateral, such as land, houses, and apartments, is real estate or commercial spaces that guarantee stability for the lender. For these immovable assets, it’s crucial to have clear titles and fulfill the requirements that the financial lenders have set forth. Notably, land under the local Gram Panchayat, farmland, farmhouses, or cantonment areas are typically not accepted by lenders. On the other hand, non-farm open property with clearly defined boundaries is still a good bet for getting an MS education loan in the US.
Third-Party Guarantor
The only Indian banks that will take third-party collateral for student loans abroad is the government banks. Under this arrangement, a reliable person (friend or relative) serves as a guarantor, picking up the tab for loan repayment in the event that the applicant defaults. For those without significant assets of their own but with a willing guarantor who is willing to provide collateral, this option offers flexibility.
Government Securities
Recognized collateral securities include RBI relief bonds, National Savings Certificates (NSCs), and government security bonds issued by Public Sector Units (PSUs). Depending on the bond value, you may be able to obtain an overseas education loan of up to 100% if you pledge government security.
Fixed Deposits
Certain financial institutions will take fixed deposits as security for student loans taken out of country. For applicants and lenders alike, FDs provide a safe haven for investments. The bank is guaranteed the amount of the fixed deposit (FD), and in the event of a default, the bank may take the outstanding balance from the FD. It is crucial to remember that lenders assess FDs based on their principal value rather than their maturity value.
Life Insurance Policies
Financial institutions will also accept LIC policies—more specifically, term insurance policies—as collateral for loans for overseas education. Loan amounts typically range from 75 to 100% of the insurance policies’ surrender values. This emphasizes how crucial term insurance policies are to getting an education loan to study MS in the United States.
You can successfully receive loan disbursement and the appropriate amount of money to finance your education in the USA by contacting the appropriate financial institution. Therefore, we advise you to visit an overseas education loan advisor and receive assistance with loan application if you’re looking for a collateral or collateral free education loan for abroad.
