Engineering Student Loans for Studying in the USA

Pursuing an engineering degree in the USA can give Indian students access to advanced research, specialised programs and industry-focused learning, but tuition and living costs can make financing challenging.

Indian students can explore secured and collateral-free education loans from Indian lenders, US loans with a cosigner and international student loans that may not require a cosigner.

This guide compares the major education loan options for engineering studies in the USA, including eligibility, costs, documents, repayment and factors to consider before choosing a loan.

Apply With Expert Guidance!

Education Loan Options for Engineering in the USA at a Glance

There is no single type of engineering student loan suitable for every student. Indian students may be able to borrow from banks and NBFCs in India or explore international lenders, depending on their circumstances.

Here is a quick comparison:

Eligibility, maximum funding, interest rates and repayment conditions vary by lender and loan product. Students should therefore compare actual loan offers rather than selecting a lender based only on its category.

How Much Funding May You Need to Study Engineering in the USA?

The cost of studying engineering in the USA varies considerably between universities, degree levels and locations.

Your overall cost of attendance may include:

• Tuition and university fees
• Accommodation and living expenses
• Books and study materials
• Laboratory or program-related expenses
• Health insurance
• Laptop or equipment, where eligible
• Travel expenses
• Other education-related costs accepted by the lender

Loan coverage varies by lender. Depending on the product, funding may cover tuition, living costs, travel, books, equipment and other approved education expenses. The sanctioned amount can also depend on margin requirements, the university, applicant profile, collateral and co-applicant strength.

Secured Education Loans from Indian Banks

A secured education loan requires the borrower to provide acceptable collateral to the lender. Depending on the bank’s policy, collateral may include residential property, certain financial assets or other acceptable security.

Key Features of Secured Education Loans

• Potential access to larger loan amounts, subject to lender assessment
• Interest rates may differ from unsecured products
• Longer assessment due to collateral valuation and legal verification
• Indian co-applicant requirements generally apply
• Repayment terms depend on the specific lender and scheme

Students should account for the additional time required for property documents, valuation and legal verification when applying for a secured loan.

Unsecured Education Loans from Indian Banks and NBFCs

Students who do not want to pledge collateral can explore unsecured education loans. Both Indian banks and non-banking financial companies (NBFCs) may provide collateral-free education loans to eligible students.

Some banks maintain institution or program categories that affect unsecured-loan eligibility.

Education loans without collateral can therefore be particularly relevant to students admitted to universities that meet a lender’s criteria.

What Do Lenders Consider for an Unsecured Loan?

The lender may assess:

• University and program
• Academic performance
• Requested loan amount
• Co-applicant’s income
• Co-applicant’s credit profile
• Existing financial obligations
• Expected career outcomes
• Overall repayment capacity

NBFC underwriting criteria may differ from those of banks, but approval still depends on the applicant’s profile and documentation.

Indian Banks vs NBFCs for Engineering Student Loans

Banks and NBFCs can both provide education financing for eligible US engineering programs.

Popular Indian education-loan providers include public-sector and private-sector banks as well as NBFCs.

For more information, students can also understand how an NBFC education loan works before comparing lenders.

Education Loans With a US Cosigner

Another option for Indian students is a US cosigner education loan from a US lender with an eligible US cosigner.

A cosigner shares responsibility for repayment and generally needs to satisfy the lender’s credit and eligibility requirements.

Having a qualified US cosigner can potentially give a student access to additional loan products. However, the cosigner becomes financially responsible for the debt according to the loan agreement.

Before selecting this route, both the student and cosigner should understand:

• Interest rate and APR
• Fixed versus variable rates
• Origination or other fees
• Repayment schedule
• Cosigner obligations
• Cosigner-release provisions, where available
• Consequences of missed payments

Get US Co-Signer Loan Assistance

Education Loans Without a Cosigner

International lenders may provide loans for qualified international students without the need for a US co-signer. Qualification may be determined by several considerations, including the university, program, degree level, and student.

No-cosigner loans should also be compared carefully on total borrowing cost. Students should check the APR, fees, repayment terms and currency exposure rather than looking only at the advertised interest rate.

Are Government Education Loan Schemes Available for Engineering in the USA?

Government education initiatives are not necessarily separate loan products; some are portals or interest-subsidy schemes.

Not every government education initiative is a separate education loan.

For example, the Central Sector Interest Subsidy Scheme under PM-USP should not be treated as a financing option for engineering studies in the USA. The Ministry of Education states that PM-USP CSIS applies to eligible technical and professional higher-education courses in recognized institutions in India.

Dr. Ambedkar Central Sector Scheme

Interest subsidy is available under the scheme known as Dr. Ambedkar Central Sector Scheme for education loans taken by eligible students for pursuing higher studies abroad.

Government issued guidelines state that this is an “interest subsidy scheme” for eligible OBC & EBC students undertaking approved courses abroad at Masters, M.Phil. and Doctorate level, under the conditions of the scheme.

Students should check the latest official guidelines before relying on any subsidy, as eligibility criteria and scheme provisions can change.

Eligibility for an Education Loan for Engineering in the USA

Lenders generally evaluate the student, university, program, and financial profile.

Student and Academic Eligibility

You may need:

• Indian citizenship or residency as required by the lender
• Admission to an eligible US institution
• Satisfactory academic history
• Admission to an eligible engineering program
• Required entrance or English-language proficiency results, where applicable

Financial Eligibility

For Indian lender products, assessment may include:

• Co-applicant’s income
• Employment or business stability
• Credit history
• Existing liabilities
• Repayment capacity
• Collateral value for secured loans

International lenders can apply different underwriting criteria, particularly for loans designed specifically for international students.

Documents Required for an Engineering Education Loan

Preparing your documents before applying can make the process more efficient.

Student Documents

Commonly requested documents include:

• Passport
• PAN and other applicable KYC documents
• University admission letter
• Academic transcripts and certificates
• Entrance-test scores, if applicable
• English proficiency test scores, if applicable
• Statement of the university’s estimated cost of attendance
• Scholarship details, if applicable

Co-applicant Documents

Depending on employment status and lender requirements, these may include:

• Identity and address proof
• PAN
• Salary slips or business-income documents
• Bank statements
• Income-tax returns
• Employment or business proof

Collateral Documents

For secured loans, lenders may request:

• Property title documents
• Ownership records
• Tax receipts
• Approved building plans, where applicable
• Other legal and valuation documents

Interest Rates and Other Costs You Should Compare

The interest rate is important, but it should not be the only factor used to compare engineering student loans.

Students should consider the total cost of borrowing. Check:

• Interest rate
• Fixed or floating/variable rate
• APR, where provided
• Processing or origination fee
• Margin requirement
• Simple interest during the study period
• Repayment tenure
• Prepayment conditions
• Late-payment charges
• Currency-conversion risk for foreign-currency loans

A loan with a seemingly lower rate may not always be less expensive after fees and repayment conditions are considered.

Is Section 80E Available on Education Loans?

The Income Tax Act of India in Section 80E could help qualified borrowers avail themselves of the deduction on interest charged for loans taken for higher education purposes, according to certain conditions. Make sure that your loan is applicable for deduction under Section 80E of the Income Tax Act.

Repayment and Moratorium Period

The education loan can have a moratorium period before the start of EMI repayments. Nevertheless, even after the moratorium period, the interest continues to be charged, and sometimes some lenders ask for partial/complete interest payments while studying.

Before accepting a loan, ask:

• When does interest start accruing?
• Are payments required during the course?
• When does full EMI repayment begin?
• Is accrued interest added to the principal?
• What is the final repayment tenure?
• Are there prepayment charges?

How to Choose an Education Loan for Engineering in the USA

The right financing option depends on your individual profile rather than simply whether the lender is a bank or NBFC.

1. Calculate Your Actual Funding Requirement
Calculate your actual loan needs by deducting scholarships, grants, personal savings and family contributions from the university’s cost of attendance.

2. Check Whether You Have Suitable Collateral
Should you be able to provide acceptable collateral, assess the merits of taking out either a secured or unsecured loan. If not, assess the unsecured loan options available.

3. Evaluate Your Co-applicant or Cosigner Options
Determine whether you have:

• An eligible Indian co-applicant
• An eligible US cosigner
• Neither

This can significantly affect which loan products are available.

4. Compare the Total Cost
Compare the total borrowing cost, including interest, fees and interest accrued during the moratorium, not just the advertised rate.

5. Compare Multiple Lenders
Eligibility criteria vary considerably. A profile rejected or offered a particular amount by one lender may be evaluated differently by another lender.

How to Apply for an Engineering Student Loan for the USA

The application process typically involves the following steps:

1. Estimate your funding requirement: Calculate tuition, living expenses and other eligible study costs.
2. Identify suitable loan types: Compare secured, unsecured, cosigner and no-cosigner options.
3. Check lender eligibility: Confirm that your university and engineering program are accepted.
4. Prepare documents: Gather admission, academic, KYC and financial documents.
5. Submit applications: Apply to suitable lenders and provide the requested information.
6. Review loan offers: Compare interest rates, fees, repayment terms and sanctioned amounts.
7. Complete formalities and disbursement: Give all the documents/collateral that may be required and get disbursement done with the help of lender and university.

Conclusion: Finance Your Engineering Degree in the USA With Nomad Credit

An education loan can make an engineering degree in the USA more financially accessible, but choosing a loan requires more than finding the lowest advertised interest rate.

Indian students can explore secured bank loans, collateral-free bank and NBFC loans, US cosigner loans and international no-cosigner options. The right choice depends on your university, program, funding requirement, collateral, co-applicant or cosigner profile and repayment preferences.

Nomad Credit can help you explore and compare relevant education loan options. Our experts can guide you through lender selection, documentation and the education-loan process so you can make an informed financing decision.

Loan Finder

Find Your Best Loan
Options in Minutes

Explore Offers Now