A large number of international students move to the USA for their further education. The biggest challenge they face for studying in the USA is an arrangement for funds. Cost of studying in USA can be huge and everyone cannot afford it. So in this article, we are going to present you with complete information about Education Loan to Study in the USA.
How to get the Education Loan to Study in the USA?
International Students looking forward to studying in the USA with the help of an education loan must start their process at least 7-8 months before their semester begins. They may also choose to start their loan application process with their university admission application. Here are the steps you need to follow for applying for a student loan:
Now we will present each step in detail. Go through each step thoroughly and take note of the important points, as it is a big decision which will affect your further life.
Your process starts with the research of the different banks and loan options. But before you research, there are a few things you have to consider.
Factors to consider for applying for education loan
Before applying for a student loan to study in USA, you should have a clear idea about how much money you will require and how much you are going to pay from your pocket. Other important factors to keep in mind before applying for an education loan are:
After considering the above-mentioned factors, check your eligibility for an education loan to Study in USA. Here are the criteria:
Eligibility Criteria to apply for international education loan
Before applying, check whether you are eligible to apply for the loan or not. Different banks follow different eligibility criteria. The common eligibility criteria followed by all the banks are:
In the next step, you have to estimate the amount you will require to study abroad in USA. Generally, an education loan to study in USA covers the total cost of a student’s education in the USA. This can vary depending on the chosen institution and study program. While calculating the expenses, consider the following expenses:
Once you get your final amount, you have to check how much you will be able to pay on your own and how much you will require to take a loan from the bank.
You have to get admission to the University of USA. You have to show proof while applying that you are admitted to the American University. There are plenty of universities in USA open for international students. Here are the top universities in USA:
Not only the above-mentioned universities, but you also have a spectrum of options in the USA where you can pursue your higher education. You will get full information here: Universities in USA
You should compare the different loan options provided by the different banks for studying in USA and select the one which suits your needs. Compare the loans options offered by the different banks on factors such as:
Each factor is important, so take your time and come to a conclusion. If you take the decision after careful planning and comparing you can save a few dollars.
In the next step, you will legally start the process of applying. After deciding on the bank and loan amount, you have to fill out the application form. It can be online or offline. Make sure to fill correct information in it.
You have to fill in your name, parent's name, address, ID proof, course name, university name, duration of the courses, date of birth, age, Income, Liabilities, employment details, type of security, tuition fees, other expenses, etc. fill all the columns correctly and recheck it before applying.
Every applicant needs to provide some common and important documents along with the Loan Application Form while applying for an education loan for USA study. The list of these documents required while applying for the loan are listed below:
Documents for Students (Primary Applicant)
Documents for Co-Applicants
Other Optional Documents
As soon as the bank approves your loan, it will issue a loan document that includes various elements of the loan. It will include the borrower's name, agreed loan amount, the period of repayment, interest rate, the signature of both the parties, collateral security, etc. Read the agreement and then sign it.
After signing your loan document, the bank will pay the amount to you in installments or as required by the university. It will also be mentioned in your loan agreement. Once you receive your amount, spend on the necessary expenses such as tuition fee, books, supplies, accommodation, etc. Don’t waste your money on non-essential expenses.
What is Collateral?
Any property either movable or immovable, which can be kept as a security in the bank for an education loan is collateral. The interest rate of education loans to study in the USA depends directly on collateral availability. Most of the banks demand collateral as security to reduce the risk involved in paying off the credit.
Instruments used as collateral:
How much can be borrowed against collateral?
Student loans without collateral to study in USA are also provided by some NBFCs at high-interest rates. To get an international private loan, students don’t need collateral but instead, they will need co-signer security.
Since international students do not have a reliable credit history in the USA, most lenders and loan-providing organizations ask students to have a USA co-signer. Let us first know what is the meaning of the consignor.
Who is a Cosigner?
A cosigner is the second party who will be legally responsible for the repayment of the loan amount if the borrower is unable to repay. The task of a cosigner is to take on the huge responsibility of paying back the amount of the loan including the interest. Almost all lenders in the USA require international students to provide the details of their cosigners.
Guidelines for selecting Cosigner
Based on the cosigner’s background and creditworthiness, the interest rate can differ. Here are a few general guidelines international students should consider:
International Student Loans without Cosigner
International students who are unable to find a cosigner should not lose hope as there are other options for international student loans without cosigners. There are a few loan providers for education in USA who do not ask for cosigner security. Students can explore the options of loan providers in the country as well as outside the country.
The loan taken to study in USA can be paid in installments. The loan can be repaid within a period of 10 -15 years after taking the loan. The repayment period starts from 4- 12 months after the end of the course. However, the period and installment amount differ with the bank and loan amount.
You should also read these articles:
Admission process to visa: Study in USA
Stay back and Work permit after Study in USA
Top Student Cities and Universities to Study in USA
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