How to Apply for Education Loan in the USA? A Detailed Guide

How to Apply for Education Loan in the USA

Pursuing higher education in the United States can be a life-changing experience, but the cost of education in the USA is relatively high. To bridge this financial gap, many students opt for education loans to fund their studies. In this blog, we’ll provide you with a comprehensive guide on how to apply for an education loan to study in the USA, covering everything from eligibility criteria to the application process. So let’s get started.

Eligibility Criteria to Apply for Education Loan in USA

Before seeking a study loan for education in the USA, it’s essential to meet certain eligibility criteria:

  • Citizenship Requirement: To apply for a study loan from Indian banks, the student must hold Indian citizenship.
  • Academic Excellence: Applicants should possess a commendable academic record, reflecting their dedication to education.
  • Program Selection: Eligibility extends to those pursuing technical or professional study programs with a strong focus on career prospects.
  • University Admission: To qualify, applicants must secure admission at a recognized university in the USA, indicating their commitment to higher education.
  • Age Requirement: Eligible candidates should be between 18 to 35 years of age

Required Documents

Banks take proactive steps to evaluate the capability of students to repay the loan amount by requesting a specific set of documents, which may include:

  • University Offer Letter (proof of admission)
  • Estimated cost of study 
  • Loan application form
  • Original education certificates/mark sheets
  • Scorecards of exams qualified like IELTS, TOEFL, etc.
  • Residential proof of student and guarantee
  • IT return of the co-applicant/guarantor
  • Identification proofs and PAN card of the co-borrower/guarantee
  • Co-borrowers proof of income
  • A passport copy of the student
  • Details of assets/liabilities of the parents/guarantee/co-borrower

Also Read: Axis Bank Education Loan Without Collateral For Studying Abroad 

Expenses Covered

The expenses that may be covered under the loan as per the lender will include

  • Tuition fees
  • Living expenses (accommodation, food, utility, and more)
  • Health insurance
  • Visa fees
  • Expenses related to studies (lab fees, instruments, and more)

Courses Covered

Education loans are available for the following courses:

  • Undergraduate degrees
  • Postgraduate degrees
  • Doctorate programmes
  • Diploma courses
  • Vocational courses
  • Skill development courses

Also Read: Student Loan for UK

Prerequisites for Education Loan to Study in USA

Preparing to apply for an international student loan in the USA requires careful planning and a systematic approach. Here are the steps laid out for a clearer understanding:

  • Plan Your Finances: Before applying for an international student loan, it’s crucial to have a precise estimate of the required funds. To do this, finalize your choice of course and university, calculating tuition fees and cost of living.
  • Create a Document Checklist: Compile a list of essential documents that will be required during the loan application process.
  • Arrange a Guarantor: Secure a reliable guarantor who can vouch for your ability to repay the loan.
  • Apply Early: Initiate the loan application process well in advance, ideally before the university’s application period begins.
  • Research Lenders and Banks: Evaluate various lenders and banks based on factors such as loan amount, interest rates, repayment period, loan processing time, loan margin, and processing fees.
  • Document Submission: Submit all the necessary documents to facilitate the loan application and review process.
  • Conditional Loan Offer: Upon approval, you’ll receive a conditional loan offer letter from the chosen bank or lender. This letter serves as proof of funds.
  • Obtain Approvals: Present this “proof of fund” letter to gain necessary approvals from your university, visa/immigration office, and financial aid institutions.
  • Loan Agreement: Once you’ve obtained the required approvals, you’ll be asked to sign the loan agreement document provided by the bank or lender.
  • Loan Disbursement: After signing the loan agreement, you can expect to receive the approved loan amount as per the agreed terms and conditions.


What are the typical loan margins provided by banks for study abroad loans?

Generally, banks and lenders don’t offer the entire required loan amount. They typically provide 90% of the funds, while the remaining 10% needs to be arranged by the students themselves.

How can I manage the repayment of my student loan?

Repaying your student loan typically begins after you complete your course, with a repayment period that usually spans 15 to 25 years. The bank also provides one year moratorium period from the date of completing the course. However, it’s essential to note that the specific terms and instalment amounts may vary depending on the bank, lender, and the type of loan you’ve secured.

What is the most critical factor to consider when applying for an international study loan?

Prior to signing any loan agreement, it is of utmost importance to meticulously review the terms and conditions. If you have any uncertainties regarding the stipulations, seeking guidance from experts, aside from bank representatives, is highly advisable.

Acquiring an educational loan to pursue higher studies in the USA represents a crucial milestone for Indian students pursuing their academic aspirations abroad. Thanks to collaborative efforts between the Indian government, the Reserve Bank, and the Indian Bankers Association, the process of securing funding has become more accessible and streamlined.

The journey begins with fulfilling eligibility criteria, meticulous document preparation, a comprehensive grasp of loan terms, and the selection of the right bank or lending institution. By approaching this process with careful planning and due diligence, students can ensure a successful and financially manageable educational journey in the USA.

To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience. Follow our social media handles on Twitter, LinkedIn and Instagram.  

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