You aced your GRE/GMAT score, you’ve got selected your college also, now there’s just one step left between you and your dream of studying within the USA. Availing a study abroad education loan! Banks have simplified the method of availing an education loan for USA by resolving the complexities of financing. The USA compared to countries such as Germany, United Kingdom, Australia, Canada, is an expensive country to do higher studies. The cost of education can range from INR 40 Lakhs to above INR 1 cr depending on the type of course. With the proper guidance, students can complete the loan process hassle-free with no complication. While the application, approval, disbursement, and repayment process may differ among various financial institutions, most banks and NBFCs, International Funds follow an easy procedure. Take a Look!
Step 1: Determine the loan amount
It is advisable to start out the method of study abroad education loan evaluation before the admission is confirmed. The expenses evaluated should cover the hostel and college fee, examination, laboratory, library fee, cost of books and equipment and travel expenses. The loan amount should be precise because it can make a difference within the rate of interest. While education loan in USA is often applied before admission is confirmed, disbursement will happen only after getting the I-20 form from the school which incorporates fee details per annum alongside living expenditure.
Step 2: Compare lenders to avail loan
The entire process of comparing different banks and NBFCs could seem overwhelming to students and their families since it requires tons of your time and efforts. Rather than getting to different banks, you’ll use Eduloans because it provides one window platform i.e. Students can compare and choose between all the lenders on various different parameters to suit the best needs.
SECURITY FOR THE LOAN: As a student you have to look at what you would provide as security. In overseas education loan in USA there are basically three security parameters, firstly the student himself, his cosigner/parent, his the parents or collateral in the form of house, commercial property, not a culture land, fixed deposits, gold, LIC certificates, mutual funds etc. The nationalized banks provide education loan purely based on collateral security. In case the student is looking at an unsecured loan with a valid cosigner which in most cases is his parents he can opt for NBFC or private banks. In case the student is not looking to provide a cosigner, he can look at international funds like Mpower, Prodigy & Leap finance.
INTEREST RATE: While comparing education loans in USA, the borrower should consider the speed of interest, the bank is offering. Lower the rate of interest better is that the loan offer. Different banks have different criteria for fixing the interest rates on loans; borrower’s academic performance, college, family background, collateral provided, etc are factors on which the rate of interest are often negotiated.
LOAN AMOUNT: A borrower must consider the study abroad education loan for USA amount that the bank is prepared to supply. If the loan amount that the bank is offering is a smaller amount than what the borrower needs, then the borrower should consider loans offered by other banks. Generally, in case of secured loans the maximum loan provided is equivalent to the value of the collateral security. In case of unsecured loans most of the banks have an upper limit of 40 lakhs and provide the loan based on the university Of the student. In case of international funds for education loan in USA they provide up to a maximum of I20 value.
REPAYMENT PERIOD: The repayment period affects EMI, and thus, the borrower should choose the repayment period he/she is getting, as the EMI that he wants to pay after his/her course.
MORATORIUM PERIOD: Some banks offer moratorium periods starting from 6 months to 1 year, whereas a number of them might not even offer one. The borrower should consider these factors to settle on the simplest offer for him/ her. Generally, All nationalized banks offer complete moratorium at the time of studying comparatively private banks and NBFCs have a requirement to pay partial interest during the study period.
Step 3: Apply for education loan
Application process starts with filling out the appliance form. You ought to have the specified documents to finish the appliance process. The documents required are: –
- Offer letter given by 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 (GRE, 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-applicants.
The loan is disbursed after receiving the I-20 form from the university which contains information about the varsity (address, university code), course and therefore the department details, course duration, fees details alongside living expenditure, and SEVIS number.
Step 4: Repayment
The repayment of the student loan for the USA starts after the moratorium period (EMI holiday) or as soon because the person gets employment (whichever is earlier). But, the interest is charged even during the study period and moratorium period. The interest charged during the study period is straightforward Interest whereas the one charged after this era is interest.
The Bottom Line!
While the entire process of having your study abroad education loan can seem daunting, we at Eduloans can help you move forward with ease. We at Eduloans match the most convenient lender based on your eligibility, cost and convenience. We have over 10,000 students on our platform looking to study abroad loans for USA. Our dedicated counselors will help you get the best interest rates for your profile. So, hurry up and call us today or register on our website.