Education Loans for Masters in USA: Costs, Types, Process & More

The USA’s education system was built on ideals of opportunity, freedom, and strong skills that connect students to a successful future. With a concentration of the world’s best Universities and a global reputation for excellent research and teaching, the country seems to fulfill its purpose with aplomb. As one of the ‘Big 4’ study destinations, the USA invites thousands of international students across various States. The country is especially popular among Master’s aspirants, who wish to make the most of its focus on practical skills, interdisciplinary research, and excellent career opportunities after graduation.

However, as everything from tuition fees to visa application costs increases in the USA, students may think twice about the financial investment required for such an endeavor. However, the Indian financial market offers several options for education loans for Masters in the USA. This gives students the confidence to chase their American education dream without any roadblocks. This article will provide a comprehensive overview of these loan schemes, so let’s get started!

The cost of higher education in the USA is possibly the highest among popular study destinations. Although there are relatively affordable options for international students, it is important to have an idea of all the costs one may incur while studying in the USA. We have provided some estimates below.

When students consider all these costs, it becomes difficult to manage them with just savings. An education loan for Masters in the USA helps students keep their savings and investments intact. In the next section, we will explore different types of loans one can apply for.

Overseas education loans in the Indian financial market are divided into two major categories: secured and unsecured loans. Both these types of loans have different requirements and structures, as we will find out below.

• Secured Loans: Students need to provide an asset as collateral against the loan amount, such as property or fixed deposits. This type of loan is generally offered by Nationalized Banks, Cooperative Banks, Private Banks, and some Non-Banking Financial Companies (NBFCs).
• Unsecured Loans: Students do not require collateral for this loan; the focus is instead on their financial profile and creditworthiness. This type of loan is offered by a few Banks, NBFCs, and International Lenders.

Students may require a co-applicant for some of these loans, while others do not require a co-applicant. In the next section, we will compare various lenders offering education loans for Masters in the USA.

As more international students from diverse backgrounds start to foster the dream of higher education in the USA, more lenders respond with inclusive and attractive loan offers. Some lenders may even offer overseas education loans based on GRE, IELTS, and TOEFL scores. We’ve mentioned the details of Banks, NBFCs, and International Lenders providing education loan schemes for Masters in the USA below.

Nationalized Banks

Lenders	Maximum Loan Amount	Rate of Interest	Repayment Tenure
State Bank of India	Secured Loan: Up to INR 3 crores Unsecured Loan: Up to INR 50 lakhs for Prime-Listed Universities	Secured Loan: Starts at 8.40% per annum for Prime-Listed Universities Unsecured Loan: Starts at 8.90% per annum for Prime-Listed Universities	Up to 15 years, including the course duration
Union Bank of India	Secured Loan: Up to INR 1.5 crore Unsecured Loan: Up to INR 40 lakhs for Prime-Listed Universities	Secured Loan: Starts at 8.75% per annum for Prime-Listed Universities Unsecured Loan: Starts at 9% per annum for Prime-Listed Universities	Up to 15 years, including the course duration
Bank of Baroda	Secured Loan: Up to INR 1.5 crore	Secured Loan: Starts at 8.70% per annum for Premier-Listed Universities and at 9.20% per annum for non-Premier-Listed Universities, with a 0.20% concession for female students.	Up to 15 years, including the course duration

Private Banks

Lenders	Maximum Loan Amount	Rate of Interest	Repayment Tenure
ICICI Bank	Secured Loan: Up to 3 crores Unsecured Loan: Up to 1 crore for Premium-Listed Universities	Secured Loan: Starts at 9.50% per annum for Premium-Listed Universities Unsecured Loan: Starts at 11.25% per annum for Premium-Listed Universities	Up to 15 years, including the course duration
IDFC First Bank	Secured Loan: Up to INR 2 crores Unsecured Loan: Up to INR 1 crore for Prime-Listed Universities	Secured Loan: Starts at 9.50% per annum Unsecured Loan: Starts at 11% per annum	Up to 12 years, including the course duration
Axis Bank	Secured Loan: Up to INR 1.5 crore Unsecured Loan: Up to INR 1 crore for Prime-Listed Universities	Secured Loan: Starts at 10.25% per annum Unsecured Loan: Starts at 11% per annum	Up to 15 years, including the course duration

NBFCs

Lenders	Maximum Loan Amount	Rate of Interest	Repayment Tenure
Credila	Secured Loan: As per the cost of attendance Unsecured Loan: Up to INR 75 lakhs	Secured Loan: Starts at 10.35% per annum Unsecured Loan: Starts at 11.50% per annum	Up to 12 years, including the course duration
Avanse	Secured Loan: As per the cost of attendance Unsecured Loan: Up to INR 75 lakhs	Secured Loan: Starts at 11% per annum Unsecured Loan: Starts at 11.50% per annum	Up to 14 years, including the course duration
InCred	Secured Loan: As per the student’s requirement Unsecured Loan: Up to INR 45 lakhs	Secured Loan: Starts at 10.25% per annum Unsecured Loan: Starts at 11.50% per annum	Up to 12 years, including the course duration

International Lenders

Lenders	Maximum Loan Amount	Rate of Interest	Repayment Tenure
Prodigy Finance	Unsecured Loan: Up to $220,000	Unsecured Loan: Starts at 10.55% per annum	Up to 20 years, including the course duration
MPower Finance	Unsecured Loan: Up to $100,000	Unsecured Loan: Starts at 11.99% per annum	Up to 10 years, including the course duration

The loan schemes offered by recognized lenders in India include various secured and unsecured education loans for abroad. These loans help students cover nearly every expense related to their studies, as we will learn in the following section.

The cost of studying in the USA is not just limited to the tuition fees and living costs, but so many small and big factors beyond. It is important to select a loan that covers everything that students need, such as:

• The tuition fee deposit, admission fees, examination fees, etc.
• Study material, books, laptops, research equipment, etc.
• Accommodation costs, deposits, and utility bills.
• Travel expenses, including study tours or research projects.
• Health insurance, travel insurance, and other incidental expenses.

It is important to clearly understand which expenses the lender is willing to include in the loan amount, alongside the margin money amount and processing fees. Similarly, students need to check their eligibility for an education loan for Masters in the USA against the criteria mentioned in the upcoming section.

Although each type of lender has different regulations and processes, the education loan criteria for abroad studies in the USA are similar across secured and unsecured loans. An idea of the basic requirements for international aspirants is given below.

• The student/applicant should be aged 18 years or older.
• They need at least 55% to 60% marks in their previous qualification.
• The student should have an admission offer from a recognized University in the USA.
• The co-applicant (wherever necessary) should be a parent or guardian of the student.
• The co-applicant needs to have a CIBIL score above 650 for secured loans and above 700 for unsecured loans.
• If the student offers property as collateral against a secured loan, they need to ensure that it is within urban limits.

Some lenders may have specifications for the student’s chosen course or their co-applicant’s income, so it is best to confirm these aspects before applying. They may get loan approval before receiving the admission confirmation, based on their academic documents, GRE/IELTS/TOEFL scores, and their co-applicant’s financial documents. Next up, we will provide a short but comprehensive list of the documents required for the process.

When applying for education loans for a Master's in the USA, students need to carefully gather and submit documents alongside their loan application form to demonstrate their credibility as borrowers. A list of documents required by lenders from Indian students and co-applicants (wherever necessary) is mentioned below.

• A completed loan application form with all the necessary details.
• Recent passport-sized photographs and government-issued ID proof.
• An offer letter from a recognized US University for a Master’s course supported by the lender.
• I-20 form (optional), which includes the estimated cost of education at the chosen University.
• Marksheets, certificates, and transcripts of the previous academic qualifications.
• Score sheets of standardized tests such as TOEFL, SAT, GMAT, etc.
• Financial records, including bank statements, income proof, CIBIL score, and IT returns.
• Details of assets and collateral for secured education loans.

Students should note that the lender may require additional documents for verification, sanction, or disbursement. Since these are all part of the application process, let us quickly glance through the steps one needs to take for an education loan for Masters in the USA.

An education loan for a Master's in the USA is the bridge that connects students with excellent profiles to an environment that helps them make the most of their innate skills and talents. The process of receiving the loan includes several steps, as we’ve detailed below.

• Step 1: Research different types of loans and lenders for an education loan for Masters in the USA, and learn about each unique scheme.
• Step 2: Compare lenders on various factors like loan amount, interest rate, moratorium period, repayment tenure, Prime University lists, eligibility criteria etc., and shortlist 2-3 options.
• Step 3: Gather all the documents and apply online or offline for an overseas education loan.
• Step 4: Wait for the loan sanction letter from the lender and try to negotiate for the best terms before accepting the loan offer.
• Step 5: Submit documents and finish any remaining formalities to start the disbursement process on time.

Generally, students require a pre-visa disbursement of the loan amount for the I-20 form and the visa application process. So, they must choose a lender that provides this service. Getting a thorough idea of the interest type, repayment structure, and tax benefits is also crucial for a smooth experience ahead.

Wrapping it up, we now know that student loans for studying abroad come in convenient schemes fit for all kinds of academic requirements, financial backgrounds, and study destinations. Students who want to tailor their loan application experience and make it smoother should consider reaching out to Elan Overseas Education Loans. Our experts have in-depth insights about the best lenders for education loans for Masters in the USA. From suggesting the best lenders to helping students create a repayment plan after graduation, we can support and guide them every step of the way.

Q1. When should I apply for an education loan for Masters in the USA?

The most convenient timing to apply for an education loan for Masters in the USA is right after students receive a confirmation of their admission to an American University of their choice. This gives them plenty of time to compare lenders, apply for the best choice, fulfill the verification and sanction conditions, and start the disbursement procedure according to the visa requirements.

Q2. What is an I-20 form, and why do I need the loan amount for it?

The I-20 form is a certificate issued by the chosen University. It marks the student eligible to study in the USA and provides the details of the student’s course and the estimated cost of education for the course duration. This document is essential for the USA student visa process. It is issued by the University after the student shows proof of funds through a bank balance certificate or a loan sanction letter.

Q3. What types of collateral are accepted for an education loan for Masters in the USA?

The acceptable collateral types for secured education loans for Masters in the USA can vary across lenders. However, generally, lenders accept tangible assets like residential property and/or urban plots, as well as intangible assets such as Fixed Deposits and/or government bonds.

Q4. Does my course affect the loan amount I get?

Sometimes, yes. Some lenders may provide higher loan amounts for professional and technical courses, like an MBA or MS. However, the loan amount depends on many other factors, such as the student’s chosen University, the cost of attendance, their academic and financial profile, etc.

Q5. Is there a way to lower the interest rate for an education loan for Masters in the USA?

Yes, there are a few ways in which students can reduce the interest rate for education loans for Masters in the USA. One way is to choose a lender that has their University in their Prime List, as these Universities often get lower rates automatically. Another way is to look for interest rate concessions or subsidies based on their background, academic profile, and government schemes in their state.