Education Loan for Engineering Students to Study In USA

Types of Education Loan for Engineering Students

On the basis of the requirement for collateral, there are typically two types of loans- secured and unsecured. Let’s understand them in detail:

1. Secured Education Loans

Secured education loans require the borrower to provide collateral, which could be in the form of property, fixed deposits, or other valuable assets. These loans are often preferred by lenders because they reduce the risk associated with lending.

Key features of secured loans are as under:

• Borrowers need to pledge an asset as security.
• Secured loans have comparatively lower interest rates.
• Lenders may offer higher amounts of loans.
• Lenders may be more lenient with credit score requirements and other eligibility criteria.

• 2. Unsecured Education Loans

Unsecured education loans do not require collateral. These loans are based on the borrower’s creditworthiness and the co-applicant’s (often a parent or guardian) financial status. It is suitable for Students or families who do not have collateral to offer or prefer not to pledge assets.

Key features of unsecured loans are as under:

• Borrowers do not need to pledge any asset to secure a loan.
• Unsecured loans have typically higher interest rates due to a lack of collateral.
• The loan amount may be lower compared to secured loans.
• Lenders may require a good credit score and/or a stable income source for the co-applicant

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What Expenses are Covered Under Engineering Student Loans? 

Typically, an education loan for engineering students covers a wide range of expenses.  Here’s a breakdown of the common expenses that are generally covered:

• Tuition Fees: These fees are paid to the institution for providing education and vary significantly based on the institution, course, and location. The loan often includes all fees related to academic courses, such as registration, admission, and tuition fees for each semester or academic year.

• Semester Exam Fees: Education loans generally cover the fees associated with semester examinations, which include costs for assessments, tests, and evaluations. These are separate from tuition fees and are required for students to complete their courses and obtain certifications or degrees.

• Library and Project Costs: Costs related to accessing the library, including library fees, and resources like books, journals, and databases, are typically covered. Additionally, education loans may also cover expenses for projects and practical training, including materials, equipment, and any other specific needs required to complete academic projects or research assignments.

• Boarding and Lodging Expenses: These expenses include costs for accommodation and meals. Whether a student is staying in a hostel, rented apartment, or other accommodation, the loan can help cover rent, utility bills, and food costs. This is particularly important for students studying away from home.

• Stationery and Other Educational Materials: Loans usually cover the costs of essential educational materials, such as textbooks, notebooks, stationery, etc. This category also includes any other supplies necessary for the student’s academic activities.

 

Eligibility Criteria for Engineering Education Loan

The eligibility criteria are different for every lender on the basis of which they grant loans to the borrowers. However, here’s a set of general criteria that lenders may require to be fulfilled:

• Age Criteria: Generally lenders have limits set between 16 to 35 for the applicants. However, if the applicant is a minor, the loan application may need to be made by the parents or guardians.
• Admission Confirmation: The student must have secured admission to a recognized institution in the USA that is UGC, or AICTE approved. The loan is usually available for full-time courses, although some lenders may also offer loans for part-time or distance education courses.
• Co-applicant Requirement: Education loans often require a co-applicant, such as a parent, or guardian, who serves as a guarantor. The co-applicant’s financial status and creditworthiness are considered in the loan approval process.
• Repayment Capacity: Lenders evaluate the ability of the borrower and co-applicant to repay the loan based on their financial situation and the loan terms. They may also consider the employment prospects in the field of study, which influences the repayment capacity post-graduation.

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Interest Rates and Processing Fees

Different lenders charge different rates of interest and processing fees for education loan for engineering students to study in the USA. Below is the list of lenders with the interest rates and processing fees that they charge:

Bank	Interest Rates	Processing Fees
State Bank of India(SBI)	8.05% – 11.75%	Up to INR 10,000
Punjab National Bank(PNB)	10.25% – 12.75%	1% Minimum Rs.10000/- (Refundable after 1st Disbursement)
Bank of Baroda	9.70% – 13.70%	1% of the loan amount up to Rs.10,000
Axis Banks	13.70% – 15.20%	Up to 2% of the loan amount + GST
HDFC Credila	13.80%	Up to 1% of loan amount + GST

Note – For loans under INR 4 lakh, interest rates tend to be lower, while higher amounts can attract higher rates. 

Many banks also offer concessions for female students who have secured admission to recognized engineering colleges.

 

Documents Required for Education Loan for Engineering Students

When applying for an education loan to study engineering in the USA, the required documents typically include:

• Admission Letter: A copy of your admission letter or offer of acceptance from the university where you will be studying.
• Cost of Attendance: Documentation from the university detailing the total cost of attendance (tuition fees, living expenses, etc.) for the academic year.
• Loan Application Form: Completed loan application form provided by the lender or financial institution with affixed photographs.
• Identity Proof: Typically, a copy of your passport, and/or Aadhar card.
• Academic Records: Copies of your academic transcripts and certificates, including proof of previous degrees or qualifications. (Marksheet of class 10th and 12th)
• Collateral Documents (if applicable): If you are providing collateral (such as property or fixed deposits) for the loan, documents related to the collateral may be required.
• Income Proof: If you or your sponsor (if applicable) are employed, documents such as salary slips, income tax returns, or bank statements may be required to demonstrate income and repayment capacity.
• Co-borrower or Guarantor Details (if applicable): If a co-borrower or guarantor is required for the loan, their financial and identity documents may be needed.
• Visa Documentation: Proof of visa status (if already obtained) or documentation related to your visa application process.
• Other Supporting Documents: Depending on the lender’s requirements, additional documents such as a statement of purpose (SOP), references, or any specific forms related to the loan application may be needed.

It’s essential to check with the specific lender or financial institution you plan to apply to, as requirements can vary. Additionally, start gathering these documents well in advance to ensure a smooth loan application process.

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How to Apply Education Loan for Engineering Students in India?

Follow the given steps to apply for an education loan for engineering students in the USA:

• Research and Choose the Right Lender: Look for banks, NBFCs, or other lenders that provide education loans. Compare the interest, and other terms and conditions and choose the one that works best for you.
• Check Eligibility Criteria: Ensure that you meet the eligibility criteria set by the lender such as your academic record, course and institution, etc.
• Gather Required Documents: Manage and collect all the required documents like identity proof, address proof, academic record, bank statements, and other documents specified and required by the lender.
• Fill out the Loan Application: Obtain the loan application form. Carefully read and fill out the form with all the necessary and accurate information.
• Attend the Personal Discussion: Some lenders may require you to attend a personal discussion to discuss your educational plans, career goals, and prospects.
• Wait for Loan Approval: Once you’ve submitted your form and documents, the lender may take time to review and process your application.
• Loan Sanction and Disbursement: If approved, you’ll receive a sanction letter detailing the loan amount, and other terms and conditions.

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How HiWiPay Helps to Get an Education Loan for Engineering Students ? 

Want to study in USA but worried about how to get an education loan for engineering students?

HiWiPay is here to assist you with the process. Here’s what HiWiPay offers:

• Streamlined process which is completely digital. No hassles of endless paperwork.
• Match you with the best-suited provider according to your requirements. 
• Saves you time and money from endless visits to different lenders.
• Relevant lenders interested in your profile will reach out to you directly with personalized offers.

Read More – Education Loan for Medical Studies Abroad

Conclusion

When you apply for an education loan to pursue engineering in the United States, it is advisable to evaluate and compare different aspects offered by different lenders. With HiWiPay, you can shift your worries to us as we’ll align your needs with the most appropriate lender available. Our education loan for abroad studies experts will personally assist you, understand your needs, and then provide you with the most suitable loan options.

FAQ of Education Loan for Engineering Students

References

Education Loan Scheme- Interest Rates

https://sbi.co.in/web/interest-rates/interest-rates/loan-schemes-interest-rates/education-loan-scheme. Accessed on 31st August 2024

Apply Online in India for Studies Abroad

https://sbi.co.in/web/personal-banking/loans/education-loans/global-ed-vantage-scheme. Accessed on 31st August 2024

Interest Rates advance, Interest rate loan

https://www.pnbindia.in/interst-rate-on-advances-linked-to-mclr.html#educationloan:~:text=EDUCATION%20LOAN%3A%20PNB%20UDAAN. Accessed on 31st August 2024

Services Charge Related to Retail Advances | PNB

https://www.pnbindia.in/service-charges-related-to-retail-advances.html#:~:text=For%20Studies%20abroad%2D%201%25%20Minimum%20Rs.10000/%2D%20(Refundable%20after%201stDisbursement). Accessed on 31st August 2024

Baroda Scholar Education Loan for Abroad Studies

https://www.bankofbaroda.in/personal-banking/loans/education-loan/baroda-scholar. Accessed on 31st August 2024

Check Education Loan Interest rates Online | Axis Bank

https://www.axisbank.com/retail/loans/education-loan/interest-rates-charges#menuTab. Accessed on 31st August 2024