Pursuing a Master’s degree in the USA is a dream for many students, but it comes with a high cost of tuition and living expenses. Fortunately, we have a solution. Students can finance their education through education loans. The loan application process requires candidates to complete consecutive steps starting with discovering the lender followed by submitting paperwork. The following guide shows you a step-by-step method to obtain an education loan for MS in the USA. Let’s begin!
Table of Contents:
- Research Loan Options
- Eligibility Criteria
- Loan Amount
- Documentation
- Loan Application
- Loan Approval & Sanction
- Repayment Planning
- Common Mistakes to Avoid
- Tips to Get Your MS Education Loan Approved in the US
- Frequently Asked Questions
Research Loan Options
Your first step after choosing to pursue higher studies in the United States should be to explore available financial loan options. Banks offer two different types of loans:
- Collateral (Secured): A collateral-based loan needs applicants to present assets like property or fixed deposits to the lender as security.
- No Collateral (Unsecured): No-collateral loans do not demand security assets from the borrower. However, due to a lack of collateral, they may be subject to higher interest rates.
Choose whichever suits you best. Assess interest rates, grace period, repayment plans, processing fees, and more.
Eligibility Criteria
After researching loan options, check the eligibility criteria of the loan. A bank’s selection of eligibility criteria must be satisfied by applicants who want to get their loan approval. Check if loan approval needs co-signer support with proof of financial stability or requires admission documentation and any other specified documents.
Loan Amount
After checking the eligibility criteria, review the loan amount the bank is offering. Determine the full loan amount by estimating tuition and living expenses, health insurance, travel costs and vital needed expenses. Ensure that the loan amount covers your study period and your required amount. You should get loan information from several lenders to decide which loan choice will work best for you.
Documentation
Once you have fulfilled all the requirements and are planning to apply for a loan, ensure that you have all the required documents. Correct documentation makes it easier for you and your lender to pass your loan application. Some of the common documents required for a successful loan application for MS in the USA are:
| Admission Letter from University | Academic Transcripts |
| Proof of Address | Proof of Identity |
| Cost of Attendance (COA) | Proof of Income |
| Collateral (if applying for Secured loan) | Passport Size Photographs |
| Passport | Bank Statements |
Loan Application
The last stage requires you to initiate your loan application. Apply directly in one of your preferred bank branches or submit the request through their official website. Connect with your lender and get his help in filling out your loan application with all the required documents.
Loan Approval & Sanction
After a successful loan application lenders check your application against eligibility requirements and documents along with your credit report to issue an approval. When all items check out your lender gives approval for the loan while issuing a sanction letter. Funds are directly deposited into your account or your university’s (as specified in your loan).
Repayment Planning
Students must start repaying their loans after finishing their educational program. Banks usually have a grace period of 6 – 12 months (after course completion), during which you are not required to make repayments.
The grace period is typically given to secure a job and achieve financial stability before repayment starts. Banks allow borrowers to pay their study abroad loan through Equated Monthly Installments (EMIs) over 10-15 years.
Common Mistakes to Avoid
Securing an MS education loan in the USA involves several steps and can be challenging. Students make avoidable mistakes that can often lead to higher interest rates or loan rejection. Here are the top 5 common mistakes to avoid while applying for an MS education loan in the USA:
- Not Researching Loan Options: As basic as this sounds, it is one of the most common reasons for loan rejection or higher interest rates. Students usually depend on one lending institution but they neglect to examine different loan choices. Your best solution for financing requires you to investigate loan choices among banks, NBFCs and international lenders.
- Underestimating Cost: During the loan process, students often ignore the overall cost and calculate only the tuition fees. Underestimating the overall cost often leads to several financial problems. Make sure to determine the full amount needed by combining tuition costs with the expenses for living, health insurance, travel, and other necessary expenses.
- Ignoring Credit Score: A low credit score can easily lead to loan rejections or sometimes higher interest rates. Ensure that you thoroughly check your credit score (for yourself or your co-signer). If you have a low credit score, consider improving it before applying for an education loan.
- Applying Late: Students often think that they will easily get the loan in no time. This is a very common mistake that can be easily avoided. Do not wait until the last minute to apply for your U.S. education loan. Waiting until the last minute can delay the process; ensure that you are applying 3-6 months before your program begins.
- Overlooking Repayment Terms: Anyone who lacks understanding about their loan terms should directly approach their lender for an explanation. Students who seek education loans from the United States need to grasp the fundamental loan terms which consist of fixed/variable interest rates and both moratorium periods and prepayment penalties.
Tips to Get Your MS Education Loan Approved in the US
Securing an MS education loan in the US may seem like a small task, but it plays a huge role in shaping your career. However, obtaining an education loan approval can be a bit complicated. Factors such as interest rates, grace periods, repayment plans, co-signers, and credit histories all play significant roles.
Missing even one detail can cost you a significant amount of money or result in loan rejection. Don’t worry, though! At Nomad Credit, we specialize in helping students like you secure the best loan options with competitive interest rates. With our top and experienced experts, you will get the best guidance through every step of the process, completely free of charge.
Frequently Asked Questions
How can I obtain an education loan for an MS degree in the USA?
To secure an education loan, confirm admission to a US university, then start by comparing lenders. Before submitting your application you must provide necessary documents while also inspecting interest rates and repayment conditions.
When should I start applying for an MS education loan in the USA?
Ideally, you should start applying for an MS education loan in the USA 3-6 months before your program start date. As loan processing, documentation, approval, and sanction can take time.
Do I need a co-signer for an MS education loan in the USA?
It is not mandatory to have a co-signer. However, some lenders may ask for one. A US co-signer (a permanent resident or green card holder) with good credit would be beneficial.
How do I compare different loan options for an MS education loan in the USA?
When selecting a loan, you need to evaluate multiple options through assessing their interest rates and loan terms together with their processing expenses and prepayment limitations, and additional factors.
How is the loan amount disbursed for an MS education loan in the USA?
The loan amount can be disbursed either in your bank account or the university’s. However, the loan amount can also be disbursed directly to the university’s account (for tuition fees) and to your bank account (for living expenses).
