Education Loan from USA

Education Loan from India or USA

With everyone trying to get into the best universities of the world, top universities in USA get a pool of talent every year. But the competition is so acute that only the ones who perform exceptionally well get the scholarships and the rest are left to finance their studies themselves. The value of talent in these universities, however, is high. So much so that most USA universities have done tie ups with banks to offer education loans to international students at subsidized rates to study at their university. Also, many banks have taken individual steps to ensure international students have access to education loans, without being recommended by a university.

 But before you proceed any further, know your loan options upfront and save yourself a lot of time, money and hassles. When it comes to Indian students there are plenty of Indian banks providing education loan to students to study abroad. However, you must educate yourself and know all the options you can benefit from. It is known for a fact that the rate of interest charged by Indian banks is usually higher than what is charged by USA banks for education loan programmers.

Things to know before applying for an education loan in the United States

But to be able to compare one bank to another you must have the basic understanding of how banks charge interest on education loans. Here we will break down some bank jargon for you. A good understanding of the following important concepts will help you to evaluate education loans better:

Fixed Rate vs.

Variable (Floating) Interest Rate: If you opt for Fixed interest rate, you will have a constant rate of time and the payment amount will never change during the course of your repayment. Whereas, variable interest rate is subject to market risk and hence the interest rate (and your periodic payment) goes up or down over the course of your repayment.

Immediate or Deferred Repayment: Here you have the choice to either start repaying the loan immediately after taking it or wait until after the completion of your degree. The interest rate of your education loan varies accordingly.

Now that you can comprehend the bank jargon, you should know the wide gamut of options available for you to pay your student loans. A lot of people use an amalgamation of different kinds of investments or savings that they have been investing in for a long while. For instance, Fixed Deposits, part-time jobs and even borrowing money from relatives. Though bank loan is the most preferred and hassle free option, it is advised to explore all your options before finalizing one. Because the money borrowed has to be repaid by you only, over a specific time period and not to forget with interest.