Studying abroad is a good investment, but not a cheap one. Most students consider and use a range of funding options to cover the total Cost of Attendance (CoA).
After savings, education loans are a common funding source. For example, on an average, Computer Science Master’s students from India borrow USD $70K over 2 years through Prodigy Finance.
So if you decide to take an education loan, start your process early. Often, you’ll need to prove your funding to your university by mid-April to get accepted before May. Depending on your loan provider, this could take some time.
In principle, Indian students have 4 options for international education loans:
Non-banking financial companies (NBFCs)
Online lenders, like Prodigy Finance
Education loans from domestic banks
Domestic banks are typically the first place you’ll look for a loan to pursue your MS degree in the US. These include State Bank of India (SBI), HDFC Bank and, Oriental Bank of Commerce among others.
While opting for domestic banks, you need to consider the following factors:
Requirements around providing security or guarantor for your loan
Ability to pay the 15% margin money upfront
Can your bank can provide a loan sanction letter in USD if your university requires it.
Domestic banks can take up to a few months to process international student loans, especially when property is offered as security. You’ll want to submit your loan application by mid-January to prove funding in time to start college in August.
Education loans from NBFCs (non-banking financial companies)
NBFCs offer a local alternative to domestic banks and include companies such as Credila and Avanse.
Similar to domestic banks, these companies require collateral or security for education loans, but can often provide higher loan amounts to cover your full cost of attendance, with low to zero margin money required.
Education loans from US-based lenders
US interest rates are generally lower than what you’ll find in other parts of the world, and the education loans don’t require security or margin money. However, international students are often given higher interest rates and are required to have a US-based09 guarantor.
Loans often extend up to the full CoA, and they’re given in USD to make it easy for universities to issue that all-important I-20 form.
Education loans from online lenders
Prodigy Finance is an example of an online lender for international students and leads as a pioneer in international funding. The application process is entirely online, the loans don’t require security or a guarantor, margin money isn’t required and the USD loans are up to 100% of your Cost of Attendance.
There are several reasons you might want – or need – to get a loan on your own. Perhaps your parents can’t help. Or perhaps you don’t want to burden your parents with large loan sizes. After his acceptance to UC Berkeley, Aminad began looking for a loan without a guarantor requirement. He didn’t want to depend on anyone else for his success, and he definitely didn’t want to burden his parents by using their property as security for his education loan.
I feel that the collateral belongs to them and that I want to stand on my own two feet”, Aminad said.
Prodigy Finance came to his rescue then.
Akash from Duke University felt that the entire online process of Prodigy Finance was a huge benefit.
He says, It was much more efficient than Indian banks. The thing that stood out most for me about Prodigy is the people. There is someone you can reach out to, and someone will personally get back to you.
Online lenders like Prodigy Finance are worth researching to understand whether they suit your needs. To find out more, visit their website. You will be able to quickly check the rate you would get and apply online for a commitment-free quote- all in under 30 minutes.