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Free Application for Federal Student Aid (FAFSA)

Federal Student Aid offers grants, loans, work-study, and more to help you pay for college or career school. Use the Free Application for Federal Student Aid (FAFSA) to apply.

Begin the FAFSA application

Applying for federal student aid

You must complete the FAFSA application on time to be considered for federal student aid. States and colleges also use FAFSA information to award their own financial aid packages.

FAFSA deadlines

Federal deadlines to submit the FAFSA are:

• June 30, 2025, for school year 2024-25
• June 30, 2024, for school year 2023-24

Many states use the FAFSA for their financial aid programs. See the state deadlines .

Create a FAFSA account and login

Create an account and get an FSA ID. You can use your FSA ID right away to sign and submit your first FAFSA form. But to use your FSA ID for anything else, you will have to wait up to three days for your information to be confirmed by the Social Security Administration (SSA).

Log in to the FAFSA if you already have an account.

Fill out the FAFSA

Find out what information you need to fill out the FAFSA.  It will be easier to complete the form if you have everything together before you start.

Begin the FAFSA application.

Avoid financial aid scams

You may not need to hire a company to help you find financial aid. Instead, search online for scholarships or ask a school guidance counselor for help. Learn what questions to ask before paying for help finding financial aid.

Eligibility for federal student aid

To be considered for federal student aid, you must meet these basic eligibility requirements , including financial need.

Check your FAFSA application status

After you submit your application, check its status to make sure it has been processed. You can:

• Log in to your account at fafsa.gov
• Or contact the Federal Student Aid Information Center

If you submit a paper FAFSA form, you can check its status 7–10 days after you mail it. 

You will receive a report with a summary of the information you entered on your FAFSA form. Review it and make any necessary corrections by the due date.

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Best student loan rates in May 2024

• • Personal loans
• • Debt management

Hanneh Bareham, a Certified Financial Education Instructor℠, has been a personal finance writer with Bankrate since 2020.

• • Auto loans

Pippin Wilbers is a Bankrate editor specializing in personal and auto loans. Pippin is passionate about demystifying complex topics, such as car financing, and helping borrowers stay up-to-date in a changing and challenging borrower environment.

• • Personal Finance

Mark Hamrick is Washington Bureau Chief for Bankrate. He is a national award-winning business and financial news journalist.

Bankrate's ranking of the best student loan lenders analyzes interest rates, terms and features to help you start your search. It's also a resource for how to decide which student loan is best for you and what to know before applying.

A student loan is a type of borrowed money designed to cover the costs of college such as tuition, fees, books, supplies and housing. There is currently more than $1.7 trillion in outstanding student loan debt in the United States, held by 42 million borrowers. Even though it's a common form of debt, choosing the right loan for your needs is a big decision.

Students can choose federal or private student loans to help pay for school. It's usually best to start with federal student loans, which have an interest rate of 5.50 percent for undergraduate students for the 2023-24 school year. However, while private student loans have fewer borrower protections, they can fill in any funding gaps and typically have a wider range of repayment terms. Private student loan rates typically range anywhere from 4.5 percent to 17 percent.

How to apply for a student loan

Fill out the fafsa., get prequalified with private lenders., submit an application., sign loan documents., how to choose a student loan, look at federal student loan options., compare offers from a few private lenders., consider interest rates and terms., look into unique features., on this page, the bankrate promise.

The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Bankrate does not endorse or recommend any companies.

• Student loan refinancing Refinance
• Private student loan Private

The Bankrate guide to choosing the best student loans

When shopping for a student loan, look for a competitive interest rate, flexible repayment terms that meet your needs, generous hardship options and minimal fees. Lender details presented here are current as of Dec. 7, 2023. Check the lenders’ websites for updates.

The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability. Our methodology section at the bottom of the page has more information. Below, you can also find information about when to choose federal or private loans, how to find a competitive interest rate and how to compare lenders to find the best deal for your circumstances. You can also prequalify with the private lenders recommended on this page.

What are current student loan interest rates?

Current interest rates on private student loans vary based on where the loan originates, the type of interest rate and the creditworthiness of the borrower. Federal student loans, aside from Perkins loans , disbursed after July 1, 2006 have fixed rates. The interest rates shown for these types of loans apply to those disbursed between July 1, 2023 and June 30, 2024.

What are interest rates for federal student loans?

Federal student loan rates change each year. Your rate depends on when you took out your loan.

Source: The Federal Register

Compare student loan interest rates in May 2024

• Private Student Loan Rates
• Refinance Student Loan Rates
• Bad-Credit Loan Rates
• Graduate Student Loan Rates
• MBA Student Loan Rates

For more information on private student loan rates, check out our page on  private student loans .

*The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.

For more information on bad-credit student loan rates, check out our page on  bad-credit student loans .

For more information on graduate student loan rates, check out our page on  graduate student loans .

Ascent: 2024 Bankrate Awards winner for best student loan for bootcamps and vocational programs

Check rate with Credible

Why Ascent is best for students without a co-signer: Ascent is one of the only lenders to give undergraduates the chance to qualify for a student loan based on future income rather than credit score, removing the need for a co-signer.

Pros & Cons

• Loan option based on future income instead of credit score.
• Forbearance of up to 24 months over the life of the loan.
• Grace period of nine to 36 months, depending on degree type.
• High rate caps.
• One undergraduate loan option has a 3.0 GPA requirement.
• Undisclosed credit requirements for credit-based loans.

Eligibility & More

Requirements: Borrowers must be a U.S. citizen or have a co-signer who is a U.S. citizen or permanent resident. For some loans, students must be enrolled full time, have at least two years of credit history, have a minimum annual income of $24,000 and maintain a GPA of at least 2.9.

Fees: Ascent does not charge any fees.

Best student loan for multiyear approval

Why Citizens Bank is best for multiyear approval:  Borrowers can get approved for multiple years of student loans without needing to go through a hard credit check every time, which is convenient if you know that you'll need funding every year.

• Multiyear loan option.
• 0.25 percent APR discount for eligible Citizens Bank accounts.
• Scholarship opportunities available.
• $150,000 limit for undergraduate loans.
• No firm deferment or forbearance policies.
• Co-signer requirement.

Requirements: Borrowers must be a U.S. citizen or permanent resident. Eligible noncitizens must apply with a co-signer who is a U.S. citizen or permanent resident. Borrowers must also be enrolled at least half time, have no prior student loan defaults and be the age of majority; younger borrowers must apply with a co-signer. Citizens Bank states that applicants must have creditworthy, though it doesn't specify a minimum credit score.

Fees: Citizens Bank charges a late fee of 5 percent and a returned payment fee of $15.

Best student loan for quick application process

College Ave

Why College Ave is best for a quick application process:  College Ave has a simple online application that only takes a few minutes to complete, and borrowers can accept terms and e-sign documents immediately after approval.

• Three-minute application process.
• Loans available for community college and career programs.
• $150 reward upon graduation.
• Loan cap of $150,000 for most graduate school loans.
• Limited eligibility information.
• Co-signer cannot be released until at least half of the repayment period has elapsed.

Requirements: Borrowers must be a U.S. citizen or permanent resident and be making satisfactory academic progress at their school. International students with a Social Security number may apply with a qualified co-signer. Students may be enrolled full time, half time or less than half time.

Fees: College Ave may charge a late fee.

Earnest: 2024 Bankrate Awards winner for best student loan for parents

on Bankrate

Why Earnest is best for flexible repayment terms: Borrowers can pick their loan term, which ranges between five and 20 years. Plus, once every 12 months, borrowers can choose to postpone a payment.

• Skip a payment once every 12 months.
• Nine-month grace period.
• Extremely low starting rates.
• No student loans available in Nevada.
• No co-signer release.
• Credit score of 650 and $35,000 minimum income required.

Requirements: Borrowers must be attending or enrolled to attend an eligible four-year Title IV institution. Undergraduate borrowers must be enrolled at least half time. Borrowers must also be the age of majority in their state and be a U.S. citizen or permanent resident, or have a co-signer who is the age of majority and a U.S. citizen or permanent resident. Borrowers or co-signers must have at least three years of good credit history, no history of bankruptcy, a minimum annual income of $35,000 and a minimum credit score of 650.

Fees: Earnest charges a returned payment fee of up to $8. Florida residents may be charged a stamp tax of 0.35 percent.

SoFi: 2024 Bankrate Awards winner for best student loan for borrowers with good credit

Why SoFi is best for no fees:  It's standard for lenders to charge late fees or nonsufficient funds fees, but SoFi does away with even these fees. Of course, it's still not a good idea to miss payments, but SoFi's no-fee policy provides a nice buffer.

• Member rate discount of 0.125 percent.
• Exclusive benefits, including rewards.
• No fees required.
• Vague eligibility requirements.
• Loans not available for associate degree programs.
• Maximum term length of 15 years.

Requirements: Borrowers must be the age of majority and be a U.S. citizen, permanent resident or visa holder. Borrowers or co-signers must also be employed or have sufficient income. Borrowers must be enrolled at least half time in a degree-granting program.

Fees: SoFi charges no fees.

Types of student loans

Students have several options for student loans depending on their degree program:

Federal undergraduate loans: U.S. citizens and eligible noncitizens can qualify for federal student loans, regardless of credit score or whether they have a co-signer . Undergraduates may have the option of Direct Unsubsidized Loans or Direct Subsidized Loans, the latter of which is offered only to students with financial need.

Federal graduate loans: Graduate students can qualify for federal Direct Unsubsidized Loans or Direct PLUS Loans. Unsubsidized loans are cheaper, but PLUS Loans have higher loan amounts.

Private undergraduate loans: Borrowers who have taken out the maximum in federal student loans may choose to look for private student loans . In many cases, these loans may also be the only viable option for international students looking to study in the U.S., since these students don't qualify for federal aid.

Private graduate loans: Many private lenders offer loans for graduate study , including loans tailored to students attending law school , business school , medical school and more.

Student loan refinancing:  If you took out a student loan in the past but want to change your repayment term or interest rate, you may choose to refinance . Refinancing pays off your old loans in exchange for a new loan.

Federal vs. private student loans

Federal student loans are offered by the U.S. Department of Education, while private student loans are offered by banks, credit unions and private lenders. It's almost always best to start your search with federal student loans.

The biggest difference between federal and private loans is in the rates and eligibility requirements. Private lenders base your rates on your credit score, with a poor credit score leading to higher rates. Federal student loans, on the other hand, offer every borrower the same rate for each type of loan. The average interest rate on a private student loan can range from around 4 percent to 15 percent, while federal loans charge 4.99 percent, 6.54 percent or 7.54 percent, depending on the loan type.

Federal loans have borrowing limits, so borrowers will often turn to private lenders to finance their remaining academic costs. While private loans can often finance up to the total cost of attendance, they don't offer as many ways to customize your repayment plan. 

Student loan interest information

How student loan interest works.

When you apply for a student loan, you'll be offered an interest rate. This interest rate is an extra percentage of your loan amount that you'll have to pay each month.

With federal loans, this rate is the same for all borrowers and is determined by the federal government each year. With private loans, this rate is determined by your credit score, income and more. The most affordable private student loans go to students in good financial health with high credit scores.

Learn more: How the Fed rate changes impact student loans

Prospective borrowers can usually choose between a fixed and a variable interest rate. Fixed interest rates remain the same over the life of the loan, while variable rates change based on market trends. Federal student loans are always fixed, while private student loans can be either fixed or variable.

Learn more: Fixed vs. variable student loan rates

How student loan interest is calculated

While browsing interest rates, you can calculate your student loan interest to estimate how much you will pay each month. Here's how to do it:

• Find your daily interest rate: Divide your annual interest rate by the number of days in a year (365).
• Determine your daily interest accrual charge: Multiply your daily interest rate by your principal balance.
• Calculate your monthly payment: Multiply your daily interest by the number of days in your billing cycle.

If you have $10,000 in student loans and a 6 percent interest rate, with a 30-day billing cycle, a little over $49 of your first month's payment would go toward interest.

You can also calculate how much interest you'll pay over the life of your student loan by using a student loan calculator .

Learn more: How to calculate student loan interest

Student loan news updates

Following the pandemic-related pause, federal student loans began accumulating interest again on Sept. 1, 2023 and payments resumed in October. 

Early in his presidency, Biden revealed a sweeping student loan forgiveness plan that would cancel up to $10,000 in federal student loan debt for borrowers under a certain income threshold. This original student loan forgiveness plan was rejected by the Supreme Court , but the Biden administration continues to pursue forgiveness options.

Currently, the Biden administration is working with the U.S. Department of Education on a plan that would provide the following : 

• Up to $10,000 in relief to borrowers whose federal student loan debt balance has grown due to interest.
• One-time loan forgiveness to undergraduate-only borrowers whose loans entered repayment 20 or more years ago and any other borrowers whose loans entered repayment 25 or more years ago. 
• Benefits to borrowers who are eligible but have not signed up for forgiveness under various federal plans, such as Public Service Loan Forgiveness .
• Further relief to borrowers whose schools were shuttered or otherwise penalized by the department for leaving students with unaffordable debts or providing a subpar value.

Additionally, the administration has worked to reform and improve federal programs such as PSLF to provide overdue relief to borrowers, as well as forgive the loans of borrowers whose schools have shuttered. On Dec. 4, the Department of Education announced the cancellation of an additional $5 billion in federal student loan debt, bringing the total amount of debt canceled under the Biden administration to $132 billion.

How the Fed rate hikes impact student loans

In an attempt to cool inflation, the Federal Reserve raised rates 11 times from early 2022 to late 2023. Observers say a final hike is unlikely. The Federal Open Market committe has kept rates steady at six meetings since then, including the most recent May FOMC meeting .

While the Fed decisions won’t impact federal student loans for the 2023-24 school year — those are already set in stone — they could impact new private student loans and refinancing. They also impact the rates on Federal student loans for the 2024-25 school year. 

The Fed rate has the biggest influence for borrowers with private student loans with a variable interest rate. If you have an existing loan, now might be the time to refinance into a fixed rate. If you’re taking out a new private student loan, it may be wise to choose a fixed rate from the start.

What to know about the FAFSA

• When does the FAFSA open? The FAFSA opens on Oct. 1 every year. For the 2024-25 school year, the FAFSA opened on Oct. 1, 2023.
• When is the FAFSA due? The federal deadline for the FAFSA is June 30 for the award year you need funding. For the 2024-25 school year, the FAFSA is due on June 30, 2025. However, some states and colleges have earlier deadlines.
• Who is eligible to apply for the FAFSA? U.S. citizens, eligible noncitizens and DACA recipients can fill out the FAFSA. However, only U.S. citizens and eligible noncitizens can receive federal financial aid.

FAQ about student loans

How do i qualify for a student loan.

Every lender has different eligibility requirements for student loans, but generally you’ll need to:

Be enrolled at least half-time in an eligible school.

Meet age, education and citizenship requirements.

Use the loan for qualifying education expenses.

Have a good credit score and consistent income (or have a co-signer who does).

Maintain good grades while in school.

Will I need a co-signer for private student loans?

Whether or not you  need a co-signer  for private student loans depends on your financial health. If you have poor credit or little income, a creditworthy co-signer could help you get approved or receive a better interest rate. Some lenders also require co-signers for undergraduate borrowers, regardless of financial health.

Can you get a student loan with bad credit?

You can take out new student loans or refinance your existing loans with bad credit. Most federal student loans don't even check your credit, which makes them a great option for borrowers with little to no credit history. If you are applying for a private student loan, some lenders cater to borrowers with poor credit , although interest rates may be higher and loan amounts smaller.

Before applying for any student loan, check for credit score requirements at each lender and get prequalified if possible.

What are the pros and cons of private student loans?

Private student loans appeal to many borrowers because of their high borrowing limits and low starting interest rates. They also give you the option of fixed or variable rates, so you can choose the best plan for your budget. However, private student loans have fewer deferment and forbearance options than federal student loans, and borrowers with bad credit could see interest rates in the double digits.

When is refinancing student loans a good option?

Refinancing your student loans  may be a good option if you'd like to consolidate multiple loans into a single loan or if interest rates have fallen significantly since you first took out your fixed-rate loan. However, refinancing can only be done through private lenders, so you'll lose options like  income-driven repayment programs if you refinance your federal loans.

How do I refinance my student loans?

To  refinance your student loans,  shop around and compare a few lenders to see which one offers the best rate and repayment terms for your situation, getting prequalified where possible. When you're ready to apply, you can typically apply online, over the phone or in person. Once you're approved and have submitted the necessary documentation, the lender will pay off your existing loans, and you'll begin making your new payments.

Do student loans expire?

In most cases, student loans will stick around until you pay them off in full; they will not disappear after a certain amount of time. The only exceptions are if you qualify for a forgiveness program, such as Public Service Loan Forgiveness, in which case you may not have to pay your full balance.

Can you use a personal loan to pay for college?

In general, you cannot use a personal loan to pay for college tuition — lenders strictly prohibit this. However, there are personal loans for students who need to pay for travel expenses, books or equipment, as long as the student has a good credit score. Keep in mind that student loans can cover all of these educational costs, and they're often a better choice than personal loans. However, if you only need to borrow a few hundred dollars, a personal loan is worth considering.

Methodology

To find the best student loans, Bankrate first looked at lenders that have a national reputation and serve borrowers across the U.S. We then narrowed down the field based on APR ranges, loan options and loan amounts to ensure that the lenders offered competitive loans for a variety of borrowers. Lenders that offered loans for undergraduates, MBA students, medical students and more, for example, scored higher than those offering just one type of loan.

To determine the final rankings, we then evaluated eligibility requirements and any standout features that make a loan uniquely suited to a variety of needs — for instance, the ability to apply for multiple years of school or receive cash rewards upon graduation.

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• Student Loans

Best Private Student Loans and Current Rates of May 2024

Earnest offers the overall best student loans

The strongest private student loan offerings will be those with low interest rates, flexible repayment terms, and sufficiently high loan limits. Ideally, you'll want to find a lender that will also provide hardship options and not levy an origination fee, though this may not always be feasible with the first three goals. Additionally, if a lender you're considering offers pre-qualification, be sure to take advantage of it before applying.

According to our research, Earnest is the best overall student loan lender due to its low rates, customizability, and rate-match guarantee. We evaluated 30 student loan lenders and have spent hundreds of hours researching and verifying their available loan types, interest rates, fees, and repayment terms.

• Best Overall: Earnest
• Best for Negotiating Low Rates: Juno
• Best Student Loan Marketplace: Credible
• Best Parent Student Loan: SoFi
• Best for Graduate School: Iowa Student Loan (ISL) Education Lending
• Best for International/DACA Students: Ascent
• Best Average Interest Rate: Education Loan Finance (ELFI)
• Best for Student Loan Refinance: Splash Financial
• Best for Students Without a Co-Signer: Funding U

It's best to exhaust all of your federal student loan options before even considering private student loans. Rates for federal loans issued between July 1, 2023, and July 1, 2024, are 5.50% for undergraduate direct subsidized and unsubsidized loans.

• Our Top Picks
• Iowa Student Loan (ISL) Education Lending
• Education Loan Finance (ELFI)
• Splash Financial
• See More (6)

The Bottom Line

Compare the best student loans.

• How to Choose

How to Get a Student Loan

• Student Loan Pros & Cons
• Alternatives to Student Loans

Why You Should Trust Us

How we pick the best student loans, best overall : earnest.

$100 rate-match guarantee

Offers loans for part-time students

Customizable loan and repayment terms

Does not offer co-signer release

Not available to Nevada residents

Parent student loan repayment options limited

Aside from choosing your own loan amount, most private student loan lenders offer one-size-fits-all options. That’s not the case with Earnest; aside from its low rates, it offers the most customizable private student loans you’ll find on the marketplace, and that’s why it’s our top pick. If anything, it’ll be a tougher challenge to dial in the exact options for your own loan. 

Earnest starts by asking you what payment you can afford each month, which can be a tough number to pin down, since you may not know how much you’ll be earning in the future. But give it your best guess, and Earnest will present you with several different loan terms to choose from (you can alternatively just opt for a certain term length).

You can choose from four different repayment plans while you’re in school (parents will only have two options), which can help you better control your student loan payments post-graduation.

Originally founded in 2013, Earnest is headquartered in San Francisco, California.

Earnest lets you skip a payment once every year as a reward for making all your payments on time, but it does tack on an extra monthly payment and reduces the amount of forbearance you have available going forward.

• Deferment : You don’t have to make any payments at all while you’re in school and for a generous nine-month grace period thereafter (compared to a six-month grace period for most other lenders), although interest will accrue during this time. This option is not available for parent student loans.
• Forbearance : If you’ve made at least your last three payments on time and an unexpected financial problem pops up, you can request up to 12 months’ total of forbearance if you need to take a short leave from your payments.
• Fixed repayment : If you want to prevent your loan balance from growing too much, you can opt to make $25 monthly payments while you’re in school and for the nine-month grace period after graduating before starting to make full payments. This option is not available for parent student loans.
• Interest-only payments : Similar to the $25 in-school payment option, you can also opt for interest-only payments while you’re in school and for a nine-month grace period thereafter to keep your loan balance from growing at all.
• 650 or higher credit score required
• You must have a minimum annual income of $35,000
• You must be the age of majority in your state
• You must be a U.S. citizen or permanent resident
• You must have at least three years of credit history
• Available in all U.S. states, except Nevada, and Washington, D.C.
• You must have no prior bankruptcies, and no accounts currently in collections
• You must have at least two months’ worth of emergency fund savings

Best for Negotiating Low Rates : Juno

Rate-match guarantee

Long nine-month grace period

Potential for lowest student loan rates

Only one choice of lender

Limited timeline for loan acceptance

Negotiation process can be somewhat confusing

What if you were able to band together with other students to negotiate for a lower rate on your private student loans, à la a union? That’s the premise behind Juno (formerly LeverEdge). It’s not a student loan lender in its own right, but it is a first-of-its-kind student loan negotiation company.

Juno works like this: First, you sign up to join its free list by providing your estimated financial details (actual verification comes later). You’re essentially putting your name down as someone who may be interested in a negotiated deal on a private student loan. You can sign up anytime, but Juno doesn’t start negotiations until the spring when it sends its list details out to “dozens of lenders,” who compete to offer the lowest rate.

Juno picks the winner, and then sends you the details of the negotiated offer, and you can choose whether you want to apply from there. It’s a somewhat confusing process, but it does have the potential to offer the lowest private student loan rates you’ll ever get, and that’s why we included it on our list.

Originally founded in 2018 as LeverEdge, Juno is headquartered in Boston, Massachusetts.

Repayment options vary based on the lender issuing the loan. You may have access to the following options:

• Fixed payments
• Interest-only payments
• Deferred payments
• Immediate repayment
• Varies by a lender; 650 for co-signers
• Lends in all U.S. states except Nevada; some lenders are not available in all states
• U.S. citizens, permanent residents, international students, and DACA students accepted
• You must be enrolled in a four-year, Title IV, nonprofit university or college
• You must be pursuing a bachelor’s or graduate degree

Best Student Loan Marketplace : Credible

Very low rates

Best rate guarantee

Transparent lender network

Loan options may differ

May not qualify with all lenders

Only eight lenders in its partner network

One way you can speed up the loan shopping process is by using a student loan marketplace, and Credible is one of the best. When you get pre-qualified through Credible, you can check your rates with up to eight lenders at once, allowing you to easily see who you qualify with and what rates the lenders can offer you.

Unlike some marketplaces, Credible lets you know exactly which lenders are in its partner network so you don’t need to worry about checking with the same lender twice if you shop around on your own.

Credible also offers a best-rate guarantee. If you can find a lower rate with another lender, subject to certain terms, Credible will offer you a $200 gift card. The downside is that Credible doesn’t cover the full range of lenders out there (no marketplace does, after all), so it’s still a good idea to do some rate shopping on your own.

Originally founded in 2012, Credible has headquarters in both San Francisco, California, and Durham, North Carolina.

Repayment options vary by lender, but you may be able to choose from the following: 

• You or your co-signer must be a U.S. citizen or permanent resident
• Minimum credit score, minimum annual income, and state availability all vary by lender

Best Parent Student Loan : SoFi

Generous member benefits

Lots of options for payment assistance

Children can refinance parent student loans

Requires good credit

International students not eligible

No deferment options for parent student loans

SoFi has somewhat of a reputation as a premier student loan lender. Perhaps it’s because you or your co-signer will need a higher credit score compared with other lenders (650 to 700 minimum). Or maybe it’s because of the wealth of benefits that SoFi provides to its student loan borrowers: everything from complimentary one-on-one access to financial planners and career coaches to exclusive events and lounge access at Los Angeles’ SoFi Stadium.

SoFi is a good private student loan option for just about anyone (assuming you qualify), but it has some extra-special benefits for parents. If you take out a loan for your child’s college education, SoFi is one of the few lenders that will later allow your child to refinance your loan in their own name, assuming they’re willing and able to take over repayment on the loan for you.  

In addition, SoFi offers a rare perk in the private loan world: loan forgiveness in the unfortunate case that you pass away, which can be important if you want to leave an estate behind for your heirs.

Originally founded in 2011, SoFi is headquartered in San Francisco, California, and has offices in nine other states as well as in Hong Kong and eight Latin American countries.

If you take out a parent student loan, be prepared to pay it off entirely by yourself. It can be very tough to transfer to your kids later, and unless you’re able to do that, your child has no legal requirement to help you pay it back.

• Reduced payment : If you’re facing a financial hardship but are able to keep making some amount of payments, SoFi is willing to work with you on a reduced payment schedule.
• Forbearance and deferment : SoFi allows you to defer payment while you’re in school and for certain other instances, like if you’re a soldier deployed to a war zone or if you’re completing a medical residency (not available for parent loans)
• Interest-only repayment : While your child is in school, you only make payments against the interest that accrues.
• Immediate repayment : You make payments against the interest and principal as soon as the loan is disbursed.
• Recommended 650 or higher credit score
• Available in all 50 states and Washington, D.C.
• You must be a U.S. citizen, permanent resident, or DACA recipient
• You must be employed or have sufficient income from other sources
• You must be enrolled at least half-time in a degree granting program at an eligible institution

Best for Graduate School : Iowa Student Loan (ISL) Education Lending

Very low rates for grads

Options for non-co-signed loans

Loan discharge for death or disability

Benefits may vary by loan type

Not available for Maine residents

Some loans only available in Iowa and Illinois

Most lenders charge higher rates for private student loans for graduate students, but that’s not the case with the nonprofit lender Iowa Student Loans, or ISL. Instead, it offers five different loan options : one each for undergrads and graduate students without a co-signer, one for parents and families, and two general-purpose loans that are co-signer-optional for undergraduate and graduate students.

The difference for the designated non-co-signer loans is that you’ll need to meet certain academic requirements and they’re fairly limited, only being available for students studying in Iowa (undergrads and grads) or Illinois (undergrads only). But the rates are exceptionally good. Even if you only qualify for the highest rates that ISL has to offer, they’re still half of what most other lenders charge.

Originally founded in 1979, ISL is headquartered in West Des Moines, Iowa.

• Deferment : You can postpone your payments entirely while you or your student is in school if you choose, but keep in mind that interest will accrue during this time
• Forbearance : ISL offers forbearance, although it doesn’t disclose any details on how the program works. However, it’s typical for student loan lenders to offer up to 12 months of forbearance across the life of your loan if you run into temporary financial snags.
• Interest-only repayment : If you’re not yet ready for full payments but you don’t want your loan balance to grow, you can opt to make interest-only payments while you or your student is in school
• Fixed repayment : If you opt for a partnership loan for undergrads without a co-signer, you’ll be required to make $25 monthly payments while you’re in school until you start normal repayment
• Full repayment : You can opt to start repaying your loan right away, a handy option if you’re a student with income or a parent.
• 660 or higher credit score required
• Available in all states, except for Maine, and Washington, D.C.; Illinois Partnership Loan only available for Illinois residents
• You must be the age of majority in your state or be an emancipated minor
• You must have no prior bankruptcies, student loan defaults, or late payments (two 30-day-late payments are OK)
• You must have a 40% or lower debt-to-income ratio (for non-partnership loans)
• Certain requirements vary by loan option

Best for International/DACA Students : Ascent

1% graduation reward

Long grace period and forbearance

Lower rates and long deferment for med students

Higher rates for marginal borrowers

Co-signer release not available for all people

Outcomes-based loan limited and expensive

Getting funding for school in the U.S. can be tougher if you’re an international student or have Deferred Action for Childhood Arrival (DACA) status; in that case, we recommend checking your rates with Ascent. You’ll need a co-signer who is a U.S. citizen or permanent resident if you’re an international student, although that’s not required for DACA students unless you’re unable to meet the requirements for a non-co-signed loan.

Ascent also offers many loan options, both with a co-signer and without. Its non-co-signed loans do have an (undisclosed) minimum credit score and come in two flavors: one for if you already have at least two years of credit history, and one “outcomes-based” loan based on other factors like your GPA, major, etc.

While some of its loan offers are expensive, Ascent does offer a unique graduation reward where, if you meet certain conditions (be sure to check these in advance), you can receive 1% of your loan balance back in cash.

Originally founded in 2018, Ascent is headquartered in San Diego, California.

• Deferment : Deferment lets you avoid making any payments at all while you’re in school and in certain other cases, such as for active-duty military service. Interest still accrues, and you’ll begin normal repayment after a nine-month grace period (12 months for dental students, and 36 months for medical students).
• Forbearance : Similar to a deferment, Ascent allows you to avoid payments for up to 24 months over the life of your loan if you run into financial problems—twice the length that most other lenders offer.
• Fixed repayment : If you want to prevent your loan balance from growing too much while you’re in school, this allows you to make monthly $25 payments to limit how much interest accrues.
• Interest-only repayment : Similar to the above repayment plan, this allows you to make interest-only payments while you’re in school, thereby preventing your loan balance from growing at all while you complete your studies.
• Progressive repayment : Similar to the graduated repayment plan for federal loans, this allows you to start paying your loan back with smaller payments that increase over time, allowing you to pay it off within the same time frame as a normal repayment plan.
• You must have a minimum annual income of $24,000, except for undergraduate student borrower with less than two years of credit history or a graduate student borrower with a co-signer
• You must be a U.S. citizen, permanent resident, international student, or DACA recipient
• Minimum credit score not specified

Best Average Interest Rate : Education Loan Finance (ELFI)

Flexible in-school repayment options

Dedicated customer support representative

Doesn’t offer co-signer release

Not available to international or DACA students

Not available to associate-degree-seeking students

The rates that Education Loan Finance (better known as ELFI) offers on its student loans are some of the lowest out there, making it an attractive candidate to add to your rate-shopping list if cost is a primary factor for you.

If you’ve heard horror stories about being stuck with a bad student loan servicer, ELFI is a good option. It’ll assign you a dedicated customer support representative who can get to know you and your financial situation better, rather than talking to a random person every time.

There are a few things to keep in mind, however. For instance, if you need a co-signer to get approved for the loan (and most students do), there’s no way to remove them later like with many other lenders. The only way to remove a co-signer from an ELFI loan is by refinancing it entirely. In addition, it’s geared toward people who are U.S. citizens or permanent residents and studying for a bachelor’s degree or higher.

Originally founded in 2015, ELFI is headquartered in Farragut, Tennessee.

• Forbearance : ELFI offers forbearance if you qualify, although it doesn’t disclose the details you’ll need to qualify or what the forbearance looks like.
• Deferment : You can defer your loans while you’re in school, although your balance will continue to grow as interest accrues. After you graduate, you’ll get a six-month grace period.
• Immediate repayment : If you’re able and you choose to, you can start full payments on your loan as soon as you take it out to start chipping away at it. 
• Interest-only repayment : If you have some income but not enough for full payments and you want to save some money, you can opt to make interest-only payments while you’re in school so that your loan balance doesn’t grow. 
• Fixed repayment : If you still want a way to keep your loan balance from growing too much but you can’t afford interest-only payments, ELFI also allows you to set up a $25 monthly payment plan while you’re in school.
• Available in all 50 states and Puerto Rico
• 680 or higher credit score and at least 36 months of credit history required
• You must have a $35,000 annual income or higher
• You must be enrolled at least half-time in a program for a bachelor’s, master’s, or doctoral degree
• The student must be a dependent (for parent student loans)

Best for Student Loan Refinance : Splash Financial

Offers competitive rates

Spouses may be able to refinance together

Medical professionals receive special benefits

Loan options vary

Must have completed your degree

Refinance only; not for in-school loans

Things often turn out very differently from what you had planned after you graduate. Maybe you were able to grow a stellar credit score while finishing your studies, or maybe your post-graduation income didn’t quite take off as expected. 

Either way, if you need to reassess your private student loans once you’ve got your diploma in hand, Splash Financial is a prime choice. It’s a bit like a very small marketplace, checking your rates with a few lenders exclusive to Splash, but it specializes in student loan refinances. 

With most refinance loans, you’ll need to begin making full interest-and-principle payments immediately. But if you refinance medical or dental school loans with Splash while you’re in residency, you’ll have the option of making fixed monthly payments of $100 instead. This can help lighten your monthly expenses, but you’ll end up paying more over the life of the loan compared to someone making full payments.

Splash and its partner lenders charge no application, origination, or prepayment fees, but there may be other fees involved depending on your lender.

Originally founded in 2015, Splash is headquartered in Cleveland, Ohio.

• Full repayment : Full principle-and-interest payments are required for most refinanced student loans.
• Medical and dental school repayment : Refinance your medical or dental school loans and you'll only have to make fixed monthly payments of $100 while you're in a residency or fellowship, and for a six-month period after you leave those programs.  
• 640 or higher credit score required
• Available in all 50 states; Washington, D.C.; Puerto Rico; and the U.S. Virgin Islands
• You must have graduated or be in the final semester of your studies with a formal job offer

Best for Students Without a Co-Signer : Funding U

Available for DACA students

Generous forbearance policies

Loan decisions based on career, not just credit

Does not allow co-signers

Not available in many states 

Requires payments while you’re in school

Funding U is a very different lender than most, starting with the fact that it bases its lending decisions on your academic trajectory, rather than just income and credit like most student loan companies. In fact, you don’t even have the option of applying with a co-signer. Funding U will look at your credit reports to make sure you don’t have any red flags like bankruptcy , but aside from that, it’ll base its decision on your career plans and current academic performance. 

That’s both good and bad news. Not everyone is able to find a co-signer, so this is a great option if that’s your case. You might have problems getting approved, however, if you’re a newer college student, don’t have good grades, or are in certain career paths that don’t point toward high incomes later.

In addition, it’s only available to full-time undergraduates, but it still requires payments while you’re in school. The minimum you can opt to pay is $20, which isn't much, but if you’re going to school full-time, even that amount can be hard to manage.

Originally founded in 2015, Funding U is headquartered in Atlanta, Georgia.

• Fixed repayment : Make $20 monthly payments while you’re in school, with a six-month grace period after you graduate before full repayment begins.
• Interest-only repayment : Pay only the interest that accrues while you’re in school, and for the six-month grace period afterward.
• Forbearance : Up to 24 months of forbearance with no payments while interest still accrues (up to 51 months if you’re in school). Some forbearance options, such as for natural disasters, have no specified maximum length.
• Full repayment : Make full interest-and-principle payments on the loan.
• You must be over the age of 18
• Only available for full-time students working toward a bachelor’s degree
• Only available in the following states: Ala., Ariz., Ark., Calif., Colo., Conn., Del., Fla., Ga., Hawaii, Ill., Ind., Iowa, Kan., La., Md., Mass., Mich., Minn., Mo., Neb., N.J., N.M., N.Y., N.C., Ohio, Okla., Ore., Pa., S.C., Tenn., Texas, Utah, Vt., Va., Wash., W.Va., and Wis.

Earnest is our top pick for all-around best lender due to its unparalleled range of loan options and its low rates. However, if finding the absolute lowest rates is the most important thing for you and you’re not too picky about your lender, Juno is a good option. 

For students without a co-signer, Funding U and Ascent offer unique student loans based on your own academic qualifications and career trajectory, sans credit, although they are expensive. If you need to refinance, a company like Splash Financial could serve you well. Finally, don’t rule out lender marketplaces like Credible, which can help you compare many lenders at once.

Guide to Choosing the Best Student Loans

Student loans are money borrowed from the government or a private lender to pay for college. The loan has to be paid back after graduation, along with the interest that has been accrued. The loan can usually be used to cover tuition, room and board, books, and other school-related expenses. Student loans are different from scholarships and grants, which don’t have to be paid back.

You can apply for a student loan online and fill out your (and your parents', if applicable) financial information. Student loan qualifications are different depending on the type of loan you receive but can include FICO score and income. Typically, you will need multiple student loans to cover your entire tuition and all related expenses. A financial aid counselor from your high school or your future college should be able to help you better navigate the process.

Private vs. Federal Student Loans

There are effectively two types of student loans. The U.S. Department of Education is responsible for administering federal student loans, which have several benefits over their private counterparts. Interest rates on federal loans are fixed (compared to variable rate loans), in addition to typically being lower than interest rates on both private loans and credit cards.

Depending on the type of federal loan you're interested in, a credit check may not be required, the loan may be subsidized while you're in school, and payments may not be due until after graduation. Additionally, there are several repayment plans available for federal student loans. These include:

• Fixed payment repayment plans : These three plans base your monthly student debt payment on how much you owe, your interest rate, and a fixed repayment time period.
• Standard Repayment Plan : A fixed payment amount is set for this plan that ensures your debt will be paid off within 10 years, or up to 30 years for consolidated loans. After leaving school, you will automatically be enrolled in the Standard Repayment Plan unless you choose otherwise.
• Graduated Repayment Plan : Payments for this plan start lower and then increase over time (typically every two years). Like its Standard counterpart, the Graduated Repayment Plan's payment amounts are calculated to ensure your debt will be paid off within 10 years (up to 30 years for consolidated loans).
• Extended Repayment Plan : This plan's payments can either be fixed or start lower and then increase over time. In either case, these payments are designed to ensure your debt is paid off within 25 years.
• Income-driven repayment (IDR) plans : These four plans base your monthly student debt payment on a percentage of your discretionary income and your family size. Following a certain number of months of qualifying payments (which varies by plan), any remaining student loan debt is forgiven.
• Saving on a Valuable Education (SAVE) Plan : Originally known as the REPAYE Plan, payments on a SAVE Plan are equal to 10% of your discretionary income. The repayment period will be either 20 years (undergraduate loans only) or 25 years (any graduate/professional loans).
• Pay As You Earn (PAYE) Repayment Plan : Payments on the PAYE Plan are equal to 10% of your discretionary income, up to the amount you would have paid under the Standard Repayment Plan. This plan is only available to new borrowers, and it has a repayment period is 20 years.
• Income-Based Repayment (IBR) Plan : Depending on when you borrowed, an IBR plan will be set at either 10% (first borrowed after July 1, 2014) or 15% (borrowed before July 1, 2014) of your discretionary income, with repayment periods of 20 or 25 years, respectively. Like the PAYE Plan, your monthly loan payment is capped at what you would have paid under the Standard Repayment Plan.
• Income-Contingent Repayment (ICR) Plan : Payments on an ICR Plan are equal to 20% of your discretionary income or what you would pay on a fixed repayment plan over 12 years (adjusted according to your income), whichever is lower. An ICR plan has a repayment period of 25 years.

In order to qualify for federal student loans, prospective borrowers need to submit the Free Application for Federal Student Aid (FAFSA) for each academic year they expect to be in school, as it's used by the Education Department to determine a family's eligibility for grants, work-study jobs, and loans to help fund a higher education.

Private student loans, meanwhile, aren't solely restricted to one source. You can get a private student loan from a bank, credit union, or other financial institution. Private lenders typically won't consider a borrower's financial needs when determining who to lend to. As such, a loan applicant will likely need to pass a credit check, which can be difficult for students with hardly any credit history.

Private student loans lack many of the other benefits afforded to their federal government counterparts. Interest rates on private student loans are usually higher and can be either fixed or variable, and they typically aren't subsidized.

Some benefits unique to private loans are that they typically have higher borrowing limits and are usually quicker to fund than federal loans. However, these may not be necessary for some borrowers. It's generally best to exhaust all of your federal aid options before turning to private student loans, and you shouldn't take more than what you need to cover the cost of attendance, since more loan funds means more debt to repay later.

Getting a student loan is a relatively straightforward process. There are two types of student loans: federal and private. Rather than choosing between the two, it may be best to start with federal loans first and then fill in any remaining gaps with private loans.

• Fill out and turn in the FAFSA : If you want federal student loans, the FAFSA must be filled out first, and you can do so on the Federal Student Aid website . You'll need to provide information regarding your and/or your parents' Social Security number (SSN); tax returns; total cash, savings, and checking account balances; investments; etc., so having any relevant files on hand before you start may be a good idea. You'll also need to list at least one college on the FAFSA, so you should already have an idea of what schools you want to apply to.
• Review and accept your loan offer : For each university that sends you an admission offer letter, you should eventually receive a financial aid package that includes any federal loans you're eligible for. You may have to contact a school's financial aid office to determine how to apply for its aid beforehand, depending on the college.
• Apply for private loans (if necessary) : If your chosen college's financial aid package is insufficient to cover your college costs, then you should consider taking out a private student loan from a bank, credit union, etc. The exact process of getting a private loan will vary by institution, but you can typically apply on a lender's website and will have to provide much of the same information as you would for a federal loan, in addition to your or your parents' credit score.

Student Loan Pros & Cons

• Makes higher education affordable : College can be incredibly expensive. Between tuition, fees, books, housing, and more, many people won't be able to afford to pay for a higher education out of pocket. Student loans can cover some or all of the costs of college, and because they tend to have lower interest rates than other types of loans, they're often one of the most cost-effective options available to young borrowers.
• Increased earning potential : While student loan repayments can cost you a lot in the long run, this may be outweighed by how much you could earn thanks to having a college degree. Many high-paying jobs are impossible to qualify for without at least a bachelor's degree. There are certainly still jobs available to workers who are unable or choose not to attend college, but student loans can unlock additional (and potentially more lucrative) career paths.
• Little to no credit history required : Unlike several other borrower options, most types of federal student loans (as well as some kinds of private student loans) don't require a credit check. Given that most students are unlikely to have much of a credit history, making on-time payments on student debt is an excellent way for young adults to build credit.
• Loan amount may be insufficient : Most types of federal student loans (and some private loans) have set limits for how much can be borrowed. Depending on a university's cost of attendance, this may leave funding gaps that will force prospective students to take out additional loans or seek other sources of funding.
• Repayment delays financial goals : While taking out student debt can increase your earning potential, this does come at the cost of delaying your more immediate financial goals. In the best-case scenario, making monthly loan payments can restrict some borrowers' ability to save for retirement, a house, or a wedding. Conversely, student loan repayment may make it impossible for other borrowers to afford basic expenses, such as rent or child care.
• Can't be discharged in bankruptcy : As with other types of debt, defaulting on your student debt can have a serious detrimental impact on your credit score. However, unlike most kinds of debt, student loans are typically very tricky to discharge in bankruptcy. In addition to a standard bankruptcy procedure, borrowers wishing to have their student debt discharged will have to file an adversary proceeding and then prove to a bankruptcy court that repaying their student loans would cause undue hardship.

What Are Some Alternatives to Student Loans?

If you decide that a student loan isn’t for you or want to know what other options you have, there are some alternatives:

• Parents pay for college
• Merit-based scholarship
• Athletic scholarship
• Work-study aid
• Savings or an inheritance
• Military service

Investopedia collected and analyzed a wide range of key data points from several student loan providers to identify the most important factors for readers choosing the right lender to suit their needs. We used this data to review each company for interest rates, fees, and repayment terms, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999, and has been helping readers find the best student loan companies since 2019.

Frequently Asked Questions

What are the different types of student loans.

Typically, a student loan falls into one of two major categories: federal and private. Private loans are also called alternative loans. 

• Federal student loans : There are multiple types of federal loans but, in general, they have lower interest rates and better repayment terms than private loans. They’re also more readily available and may be easier to obtain than a private loan. They have fixed interest rates, and some options aren’t dependent on your credit history.
• Private student loans : These should be looked into after federal student loans are exhausted. Private student loans may cover continuing education without a degree, tuition for non-U.S. citizens, and for education costs incurred after graduation.

How Much Do Student Loans Cost?

The main cost associated with student loans is the interest. Federal loans tend to have lower interest rates, so it’s best to apply for them first. Currently, the interest rate on federal undergraduate loans is 5.50%.

Additionally, some loans may also charge origination fees, prepayment penalties, and late fees. A student loan's annual percentage rate (APR) , which represents the interest plus all fees and other costs, will give you a better sense of how much it actually costs.

Do Private Student Loans Allow Deferment or Forbearance?

It's entirely possible for private student loans to have deferment or forbearance options, but this will vary from lender to lender. Not only that, but how deferment/forbearance works will also be different between lenders. If you're considering a loan from a private lender (or already have one), the best way to determine what (if any) deferment/forbearance options are available is to contact that lender directly.

What Is a Good Student Loan Interest Rate?

A good student loan interest rate is the lowest one you can possibly get. With federal student loans, your options are limited, as the current interest rates for direct unsubsidized loans (undergraduate) and direct subsidized loans, direct unsubsidized loans (graduate or professional borrowers), and direct PLUS loans are fixed at 5.50%, 7.05%, and 8.05%, respectively. Private student loan rates can be as low as 4%, but they can also be as high as 17%, depending on the lender, type of loan, etc.

Additionally, there are other factors that make a good student loan beyond the interest rate (i.e., even if you can secure the lowest possible rate on a private student loan, benefits like income-driven repayment plans; loan forgiveness options, including Public Service Loan Forgiveness (PSLF); etc. can reduce the total costs of a federal loan in the long run).

Is Sallie Mae a Good Student Loan Company?

If you need additional loans to cover any funding gaps you may have, then the private student loan company Sallie Mae can be a good option. This lender offers undergraduate, graduate, and professional student loans, including for medical, law, and dental school, with competitive rates. However, repayment terms are fairly limited, and it levies fees on late and returned payments.

Additionally, while the company has an A+ rating from the Better Business Bureau, it also has a 1 out of 5 average customer star rating on the same website, in addition to a 1.5 (Bad) Trustscore on Trustpilot. Sallie Mae has also been the subject of controversy. In 2014, the lender agreed to a $60 million settlement for violating Servicemembers Civil Relief Act (SCRA) protections.

Which Is Better: Federal or Private Student Loans?

Generally speaking, it's a good policy to prioritize federal loans first and then apply for a private loan if you need additional funding. Federal student loans tend to have lower interest rates, don't require credit checks (unless they're for PLUS loans or federal parent loans), and have a myriad of other benefits and borrower protections that private loans typically lack. Additionally, private student loan interest rates can be variable, private lenders may charge prepayment penalties, and loan payments are often required while borrowers are still in school.

What Are the 4 Types of Federal Student Loans?

The U.S. Department of Education offers the following four types of federal student loans as part of its William D. Ford Federal Direct Loan Program:

• Direct subsidized loans : A direct unsubsidized loan is made only to eligible undergraduate students, who aren't responsible for paying interest while in school or during a grace or deferment period. Borrowers must demonstrate a clear financial need to qualify for a direct unsubsidized loan.
• Direct unsubsidized loans : A direct unsubsidized loan is made to eligible undergraduate, graduate, and professional students. Unlike their subsidized counterpart, eligibility for this type of loan isn't based on the borrower's financial need.
• Direct PLUS loans : A direct PLUS loan is made only to graduate or professional students, or the parent(s) of dependent undergraduate students (in which case they're often referred to as parent PLUS loans), for funding gaps not covered by other forms of financial aid. Eligibility for a direct PLUS loan also isn't based on financial need, though a credit check is still required.
• Direct consolidation loans : A direct consolidation loan combines all of a borrower's existing eligible federal student loans into just one loan. The new loan's interest rate will be the weighted average of the interest rates of the loans being consolidated (rounded to the nearest one-eighth percent).

Companies We Reviewed

We researched and reviewed 30 lenders to find the best student loan companies listed above. While we write individual reviews for most companies, we do not always write reviews for companies we would not recommend. Below are the companies we researched along with links to individual company reviews to help you learn more before making a decision: Advantage Education Loans, Ascent , Brazos , College Ave , Citizens Bank , Credible, Custom Choice, Discover , Earnest , Edly , Education Loan Finance (ELFI) , EDvestinU , Funding U, Iowa Student Loan (ISL) Education Lending , Juno , Laurel Road , Lendkey , MEFA , MPower , NaviRefi , Navy Federal, Nelnet Bank (U-Fi) , PenFed , PNC, Prodigy , Rhode Island Student Loan Authority , Sallie Mae , SoFi , Splash Financial , Stride

Investopedia has been dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders for over four years. We've collected thousands of data points across 30 lenders—spending hundreds of hours researching and verifying loan types, interest rates, fees, loan amounts, and repayment terms—to ensure that we help readers make the right borrowing decision for their education needs.

Investopedia

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Qualifications

Typical credit score of approved borrowers or co-signers: Does not disclose.

Minimum income: Did not disclose.

Loan amounts: $1,000 up to 100% of the school-certified expenses.

Available Term Lengths

10 to 15 years

One of the few lenders to provide loans to part-time students.

Non-U.S. citizens, including DACA students, who live in the U.S. and attend school in the U.S. can apply with a qualified co-signer who is a U.S. citizen or permanent resident.

You can't see if you’ll qualify and what rate you’ll get without a hard credit check.

Typical credit score of approved borrowers: Mid-700s.

Minimum income: $35,000 per year.

Loan amounts: $1,000 up to cost of attendance.

5, 8, 10 or 15 years

You can see if you’ll qualify and what rate you’ll get without a hard credit check.

More flexible repayment options than other lenders.

Six-month grace period extension is available.

You must be at least halfway through your repayment term before you can request a co-signer release.

Minimum income: $70,000 per year.

Loan amounts: $1,000 up to school-certified cost of attendance.

Between 5 and 15 years.

You can choose your monthly payment while the student is in school, provided it covers at least the interest.

No co-signer option.

Estate is still responsible for the loan if the parent borrower dies.

Typical credit score of approved borrowers: Did not disclose.

Minimum income: $0 for primary borrower. $24,000 for current and previous year for co-signer.

Loan amounts: $2,001 to $200,000 per year with an aggregate loan limit of $200,000.

5, 7, 10, 12 or 15 years

Among the best for payment flexibility.

Stands out for features that enable faster loan repayment.

Students enrolled less than half-time are not eligible.

Co-signer release not available to international students.

NerdWallet's Guide to Private Student Loans

When you apply for private loans, the lender will want to see proof you can repay it, usually in the form of a good credit score. A co-signer can help you qualify; that person will be responsible for the loan if you can’t pay it back.

Private student loans can cover any costs related to attending college and are originated from a bank, credit union or an online lender. Since private student loans come with less flexibility for borrowers, look to these loans only after exhausting all of the federal student loans available to you.

Specific types of private student loans

Student loans for bad credit or no credit.

Most federal student loans don’t require a credit check, so they’re your best option. If you need more money for school, a handful of private lenders offer loans specifically for borrowers with bad credit. They’ll decide whether to lend to you based on additional factors like earning potential.

Student loans without a co-signer

Undergraduates in particular often need a co-signer to get a private loan. But if you don’t have access to one, a few lenders will assess your ability to repay according to factors beyond credit history, making it more likely you’ll qualify on your own.

Graduate student loans

Graduate student loans are offered by both the federal government and private lenders. Take advantage of the unsubsidized federal student loans offered to you before taking on any federal grad PLUS loans or private student loans.

International student loans

Students who aren’t U.S. citizens generally won’t qualify for federal student loans (unless you’re an eligible noncitizen). Several private lenders offer loans for international students, and they often require a U.S. citizen co-signer.

State and nonprofit loans

Many states offer their own loan programs, but they generally behave more like private loans than federal loans.

Credit union loans

Credit unions and community banks offer private loans, too. If you have an existing relationship with one of these institutions, you may have access to more favorable terms and discounts on your loan than larger financial institutions offer.

Income share agreements

An income share agreement, or ISA, offers funding for college that you repay based on your future salary. Consider an ISA instead of high-interest loans, such as federal PLUS loans or private student loans — especially if you plan to enter a high-paying profession. You'll likely get the most favorable repayment terms.

Medical school loans

Private student loans may offer lower interest rates than federal loans for medical students with good credit. But they don’t come with forgiveness options if you work for a nonprofit hospital after graduation, which would qualify you for federal Public Service Loan Forgiveness .

Institutional loans

This is a type of loan offered directly by a college. An institutional loan doesn't come with standard features such as interest rates, terms and repayment options, so consider all attributes of the loan before accepting it.

Bootcamp loans

If you need to borrow money for your coding bootcamp, steer toward personal loans designed for bootcamp costs and away from credit cards or high-interest personal loans. Bootcamp loans may have lower interest rates and more favorable repayment terms for students.

Bar exam loans

These loans cover expenses traditional student loans won’t — like prep classes, living expenses and exam application fees — while law students or graduates study for the bar exam. Bar loans also typically have higher interest rates than private or federal student loans do.

Private student loan interest rates

The NerdWallet team of student loans experts analyzed reported rates from 24 lenders over a period of 38 months. We considered four variables — average maximum fixed rates, average minimum fixed rates, average maximum variable rates and average minimum variable rates — for each lender on a month-over-month basis.

The average rates as of Apr. 14, 2023, were:

Minimum fixed interest rate - 5.69%

Maximum fixed interest rate - 12.70%

Minimum variable interest rate - 6.46%

Maximum variable interest rate - 14.00%

Average rates in general have continued to trend upward over the last 12 months. All average rates — except maximum fixed rates — have increased since last month.

The reported rates represent lenders' advertised ranges. It's best to prequalify with multiple lenders to ensure you accept the best rate available to you.

Lenders typically offer the lowest rates to those with the strongest financial profiles. Based on our analysis, less than 30% of borrowers are offered the lowest rate. That percentage includes companies that offer all borrowers the same rate. Excluding those companies, less than 18% of borrowers are offered the lowest rate.

Use this chart and data to gauge how your student loan offers measure against typical interest rate ranges.

STUDENT LOAN RATINGS METHODOLOGY

Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

Read more about our ratings methodologies for student loans and our editorial guidelines .

Disclaimers

Annual Percentage Rates (APR), loan term and monthly payments are estimated based on analysis of information provided by you, data provided by lenders, and publicly available information. All loan information is presented without warranty, and the estimated APR and other terms are not binding in any way. Lenders provide loans with a range of APRs depending on borrowers' credit and other factors. Keep in mind that only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend on factors like credit score, requested loan amount, loan term, and credit history. All loans are subject to credit review and approval.

1 Sallie Mae Undergraduate Student Loan

Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 2/26/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website may be subjected to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years.

2 College Ave Private Student Loan

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 5/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

3 College Ave Private Student Loan

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 3/7/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

4 Ascent Private Student Loan

Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: Ascent Services Terms of Use - Ascent Funding . Rates are effective as of 5/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: Affordable Rates & Repayment Examples (APR) | Ascent Funding . 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require interest-only payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.

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Education Dept. Extends Deadline to Consolidate Loans for Forgiveness

Borrowers with commercially held loans will now have until June 30 to take steps to make their loans eligible for elimination.

By Stacy Cowley

More than two weeks after a deadline passed for federal loan borrowers seeking debt relief, the Education Department has extended the offer, giving millions of borrowers a fresh shot at aid.

The department said on Wednesday that borrowers would now have until June 30 to consolidate commercially held education debt under the Federal Family Education Loan Program — loans originally from private lenders — or Perkins loans into new direct loans, which are held by the Education Department. That consolidation is a required step for borrowers to receive relief through an expansive, but temporary, government waiver program intended to wipe out the remaining debt for borrowers who have been making payments for a term that’s typically at least 20 years.

“The department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” said James Kvaal, the under secretary of education. The previous deadline to consolidate was April 30.

The move is part of the Biden administration’s effort to aggressively cancel education debts through longstanding relief programs and by easing bureaucratic barriers. One of the trickiest challenges has been reaching borrowers with loans through the Federal Family Education Loan Program, a lingering vestige of a previous federal student loan system.

Before 2010, many federal loans were insured by the government but issued by private lenders like banks and other financial institutions. That year, the government took over the system and began making loans directly; it now holds $1.4 trillion in debt for loans to nearly 38 million people.

But millions of people still have loans made under the Federal Family Education Loan system. As of the end of April, according to Education Department data, there were still 3.5 million federal student loans owned by private lenders.

Borrowers with those loans are ineligible for most federal student debt forgiveness programs. However, they can consolidate the loans into a new, federally owned direct student loan. People can see what kind of loan they have, and consolidate into a new one , at StudentAid.gov .

Consolidating commercially held loans into a direct loan makes those borrowers eligible to benefit from a temporary government program that counts many past payments — or lengthy periods of forbearance — as qualifying ones for income-driven repayment programs , even for people who never enrolled in those programs.

Nearly one million borrowers have had $49 billion of debt eliminated through that temporary program, the Education Department said. In total, the Biden administration’s changes have led to $160 billion in debt elimination for nearly 4.6 million borrowers.

Also on Wednesday, the department said it would need more time than it had anticipated to finish those income-driven repayment adjustments. The process, which began last summer and was previously scheduled to be finished by July, will now take until September to complete, the department said. The adjustments are done automatically by the department — borrowers do not need to apply to have their loans included in the program.

Stacy Cowley is a business reporter who writes about a broad array of topics related to consumer finance, including student debt, the banking industry and small business. More about Stacy Cowley

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Graduating with student loans? Prepare for your financial future

• Published: May. 18, 2024, 12:12 p.m.
• NerdWallet | special to cleveland.com

College graduation season is underway, and nearly 3.2 million students are slated to pick up their associate or bachelor’s degree diplomas this spring, according to the National Center for Education Statistics. When the cap tosses and festivities wrap up, it’ll be time for job applications, apartment leases — and student loan payments.

It can be challenging to navigate major bills and student debt repayment. This year, new payment plans may complicate matters further.

Investing time now to research repayment options can pay off, says Emma Crawford, a certified financial planner and student loans expert at Perk Planning, a registered financial advisory firm in Madison, Wisconsin: “It’s not easy, but it’s worth it because it can save them a lot of money in the long run.”

If you’re leaving campus this year and starting your first full-time job, here’s how to prepare for impending student loan bills and a new financial reality.

Complete student loan exit counseling

If you have federal loans, you must complete mandatory student loan exit counseling when you leave school. The process takes about 30 minutes and can be done online at StudentAid.gov . Exit counseling will ask you to update your contact information, walk you through how much you owe and explain the basics of student loan repayment.

Many universities require students to complete loan exit counseling before they will post their official diplomas, Crawford says.

Private student loans won’t appear on StudentAid.gov . To check your loan amount and terms, including any exit counseling requirements, refer to the documents you signed when you took out the loan and reach out to your lender.

Get to know your servicer or lender

Federal student loan servicers act as intermediaries between borrowers and the Education Department. You were assigned a servicer when you first took out your loans. Your servicer’s customer service department can help you with individual questions about your loans and repayment options.

Your federal student loan servicer is listed on the right side of your StudentAid.gov dashboard. You’ll have to set up a separate account on your servicer’s website to manage your bills.

“Understanding who your servicer is is really important, because a lot of people don’t know that they’re not going to be paying on StudentAid.gov . They have to pay their servicer,” Crawford says.

Spend a few minutes logging into your servicer account and updating your contact information. Here, you can also enroll in autopay, so you don’t have to manually pay your student loan bill each month. Autopay also gives you a 0.25 percentage point interest rate deduction on your bills.

Choose a repayment plan

If you don’t pick a specific student loan repayment plan , your servicer will automatically place you on the standard repayment plan. This splits your total debt into 10 years’ worth of monthly payments, plus interest.

The Education Department’s loan simulator will give you estimates for how much you could pay on various repayment plans, including how much forgiveness you could get. Take some time to go through the pros and cons of each repayment plan, and learn about how monthly payments are calculated, Crawford says.

The new income-driven SAVE repayment plan is a good fit for many recent graduates, who tend to earn lower salaries as they start their careers. Beginning in July, SAVE will cap undergraduate student loan payments at 5% of discretionary income.

If you’re unemployed or earn less than $32,800 (roughly $15 an hour) as a single household, you’ll qualify for $0 monthly payments and interest won’t build under SAVE — while also making progress toward loan forgiveness. However, this plan could extend your repayment period from 10 years to up to 25 years, depending on how much you owe.

Reach out to your servicer to switch repayment plans. You can also sign up for an income-driven plan like SAVE on StudentAid.gov/IDR .

Repayment options for private student loans vary by lender.

Prepare for your first bill

You have a six-month student loan “grace period” after graduation or dropping below half-time enrollment, during which you don’t have to make federal student loan payments. After the grace period ends, your first bill is due.

If you start a job before the grace period ends and your federal loans are unsubsidized, consider starting repayment anyway. Interest will accrue during the grace period, which could increase the total amount you’ll repay over time. But if you have need-based subsidized loans, there’s no downside to taking advantage of the grace period — interest won’t start building until after the six months end.

“Take advantage of that grace period to try and get your career up and running,” says Scott Stark, a financial coach and certified financial planner at Financial Finesse, a workplace financial wellness company. “Until you have a job and some income, it’s just all about trying to keep your expenses as low as you can, trying to avoid getting into debt or getting into situations that you’re going to be digging out of a hole.”

Some private student loan lenders offer grace periods after leaving school. Check with your lender for the specifics.

Plan your financial future

Student loan bills might be a major part of your financial life for the next decade or longer. But as a recent graduate, you should also check in with other parts of your financial life to set yourself up for present and future success.

During your grace period, try to save at least $1,000 for emergencies — and once you start your first full-time job, aim to put 10% to 15% of your income into a workplace retirement account, like a 401(k), Stark says.

“Your future self will be so thankful, because of the benefit of how much time you’ve got for that to compound,” Stark says. “That is an amazing opportunity to get things started on the right foot.”

If your workplace offers a financial wellness counseling benefit, take advantage of it, Stark says. Some jobs even offer student loan repayment benefits , which can help you pay down the debt faster.

More From NerdWallet

• Federal Student Loan Interest Rates Will Hit Some Record Highs
• How Participating in Campus Protests Could Affect Your Financial Aid
• No Financial Aid Package Yet? Look to Last-Minute Scholarships

Eliza Haverstock writes for NerdWallet. Email: [email protected] . Twitter: @elizahaverstock.

The article Graduating With Student Loans? Prepare for Your Financial Future originally appeared on NerdWallet.

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• Summer 2017

Education Loans for Indian Students: Financing USA Studies

Navigating through the path to studying in the USA, you are most likely to encounter numerous challenges. One of the most significant is financing your education. Studying in the USA will cost you a fortune; let's face that. That is why education loan is of utmost importance. And if you are an Indian, you won't face many difficulties either. But with a myriad of options available, how do you navigate the complex world of education loans and make informed decisions?

In this comprehensive guide, we will walk you through everything you need to know about education loans for studying in the USA as an Indian student. From understanding the types of loans available to deciphering the application process and exploring repayment options, we will equip you with the knowledge and insights to make informed financial choices. Join us as we demystify the world of education loans, empowering you to turn your dreams of studying in the USA into a tangible reality. Let's embark on this transformative journey together!

Education Loans: Fueling Study Abroad Dreams in USA

Studying abroad comes with its fair share of challenges, and finances often top the list. This is where education loans play a crucial role, providing a lifeline for students aspiring to study in the USA . Let's delve into the financial challenges associated with studying abroad and the importance of education loans in making this dream a reality:

• High Cost of Education: American universities are renowned for their quality education but often come with a hefty price tag. Education loans bridge the financial gap, allowing students to pursue their academic aspirations without compromising their financial stability.
• Limited Scholarships and Grants: Scholarships and grants are available for students all over the world. But those are very limited, causing a hefty competition. Many Indian students may find it challenging to secure this financial aid, making education loans a more feasible option.
• Exchange Rates and Currency Fluctuations: Currency exchange rates can significantly impact the cost of education for Indian students studying in the USA. Fluctuations in exchange rates can make education expenses unpredictable and potentially increase the financial burden. Education loans provide stability by providing funds in the local currency, shielding students from exchange rate risks.
• Repayment Flexibility: Education loans offer flexible repayment options tailored to the specific needs of students. Most lenders provide a grace period after graduation, allowing students to find employment and establish a stable financial footing before starting loan repayments. This flexibility alleviates immediate financial pressures and enables students to focus on their studies and career development.

Let us learn more about the education loan in the USA for Indian students in detail.

Understanding the Cost of Education in the USA

A proper understanding of how things work in the USA allows Indian students to plan their finances effectively and make informed decisions. Let's explore the various components of the cost of education in the USA:

Components of the Cost of Education:

• Tuition Fees: Tuition fees vary significantly depending on the institution, program, and level of study. Public universities have lower tuition fees. On the other hand, private universities generally have higher tuition fees. Specialized programs such as medicine or engineering can also have higher costs.
• Living Expenses: Major cities and metropolitan areas generally have higher living expenses compared to smaller towns. Living expenses include accommodation , utilities, transportation, groceries, and personal expenses.
• Books and Study Materials: Textbooks and study materials can be a significant expense for students. The cost varies depending on the program and courses taken. Students can explore options like buying used textbooks or renting them to reduce costs.
• Healthcare: Health insurance is mandatory for international students studying in the USA. Universities usually offer health insurance plans, and the cost is an additional expense to consider.

Average Cost of Studying in the USA for Indian Students:

• Tuition Fees: On average, undergraduate tuition fees for international students in the USA can range from $20,000 to $50,000 per year. For graduate programs, the average tuition fees can vary from $20,000 to $60,000 per year or even higher for specialized programs.
• Living Expenses: The cost of living varies depending on the location. On average, international students can expect to spend approximately $10,000 to $20,000 per year on accommodation, utilities, transportation, groceries, and personal expenses.
• Books and Study Materials: The cost of textbooks and study materials can vary significantly depending on the program and courses. On average, students can expect to spend around $1,000 to $2,000 per year on these expenses.
• Healthcare: The cost of health insurance for international students can range from $500 to $2,000 per year, depending on the university and the coverage provided.

Importance of Financial Planning and Budgeting:

• Determine Affordability: Financial planning allows students to assess their financial resources and determine if studying in the USA is financially feasible. It helps in understanding the potential gap between available funds and the cost of education.
• Evaluate Funding Options: By having a clear picture of the expenses, students can explore various funding options, such as scholarships, grants, personal savings, and education loans . This evaluation ensures students make informed decisions about their financial needs.
• Manage Expenses Wisely: Financial planning and budgeting enable students to prioritize their expenses and allocate funds accordingly. It helps in avoiding unnecessary expenses and maintaining a healthy financial balance throughout the academic journey.
• Loan Repayment Considerations: Financial planning helps students estimate future loan repayment obligations, allowing them to make informed decisions about loan amounts and repayment terms.

Understanding the cost of education in the USA and engaging in financial planning and budgeting is crucial for Indian students considering studying abroad. By having a clear understanding of the expenses involved, students can approach education loans with confidence and embark on their academic endeavors with financial stability.

Types of Education Loans Available

When it comes to financing education in the USA, Indian students have access to various types of education loans. Each loan type has its own features, eligibility criteria, and pros and cons. Let's explore the different types of education loans available for Indian students studying in the USA:

Secured Loans:

These loans require collateral, such as property, fixed deposits, or other assets, to secure the loan amount.

• Key Features: Lower interest rates, higher loan amounts, longer repayment periods.
• Eligibility Criteria: Proof of collateral ownership, credit history, income, and employment stability, and co-applicant may be required.
• Pros: Lower interest rates, higher loan amounts, longer repayment periods, easier approval with collateral.
• Cons: Risk of losing collateral in case of loan default; requirement of collateral may limit accessibility for some students.

Unsecured Loans:

These loans do not require collateral and are granted based on the borrower's creditworthiness.

• Key Features: Higher interest rates, lower loan amounts, shorter repayment periods.
• Eligibility Criteria: Good credit history, stable income, and employment, co-applicant may be required.
• Pros: No collateral required, accessible for students without significant assets, fast processing and approval.
• Cons: Higher interest rates, lower loan amounts, shorter repayment periods, stricter eligibility criteria.

Government-Sponsored Loans:

These loans are offered by various government schemes.

• Key Features: Lower interest rates, flexible repayment options, longer repayment periods.
• Eligibility Criteria: Varies based on the specific government scheme, and typically includes academic performance, admission to a recognized institution, income criteria, and co-applicant may be required.
• Pros: Lower interest rates, flexible repayment options, longer repayment periods, support and benefits provided by the government.
• Cons: Limited availability and eligibility, may require fulfilling specific criteria, longer processing times.

It's important to weigh the pros and cons of each loan type before making a decision:

• Secured Loans: Pros include lower interest rates and higher loan amounts, but the risk of losing collateral in case of default is a significant consideration.
• Unsecured Loans: These loans offer accessibility without collateral, but higher interest rates and shorter repayment periods may be a drawback.
• Government-Sponsored Loans: These loans come with lower interest rates, flexible repayment options, and longer repayment periods, but they may have stricter eligibility criteria and limited availability.

Students should consider their financial situation, risk tolerance, and repayment capabilities when choosing the loan type that suits them best. It is advisable to compare different lenders, understand the terms and conditions, and seek professional guidance to make an informed decision.

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How to Apply for Education Loan in the USA?

Applying for an education loan in the USA requires careful research, a thorough understanding of loan requirements, and proper documentation.

Let us find out what the correct approach is -

Research and Identify Suitable Lenders:

• Explore different lenders, such as banks, financial institutions, and government-sponsored loan programs.
• Compare interest rates, repayment terms, loan features, and customer reviews to determine which lenders align with your needs.

Understand Loan Requirements and Eligibility:

• Familiarize yourself with the specific requirements and eligibility criteria set by each lender.
• Consider factors such as academic performance, admission to a recognized institution, credit history, income and employment stability, and co-applicant requirements.

Gather Necessary Documentation:

• Collect the required documents, which typically include academic records, proof of admission to a recognized institution, income and employment proof, bank statements, and identification documents (passport, visa , etc.).
• Some lenders may require additional documents, such as collateral-related paperwork or co-applicant details.

Fill Out the Loan Application Form:

• Obtain the loan application form from the chosen lender.
• Fill in all the required information accurately and completely.
• Pay attention to details and ensure that all supporting documents are attached as per the lender's instructions.

Collateral Evaluation (if applicable):

• If you are applying for a secured loan that requires collateral, the lender will assess the value and validity of the proposed collateral.
• Provide all necessary documentation related to the collateral, such as property deeds, valuation certificates, and insurance details.

Loan Approval and Disbursement:

• After submitting the application, the lender will review your documents and assess your eligibility.
• Carefully review the offer letter, ensuring you understand all terms and conditions before accepting the loan.
• Upon acceptance, the lender will disburse the loan amount to your designated account or directly to the educational institution.

Loan Repayment:

• Understand the repayment terms and options provided by the lender.
• Set up a repayment plan that suits your financial capabilities and aligns with your future income prospects.
• Make timely repayments to avoid penalties and maintain a good credit history.
• If possible, consider making prepayments to reduce the overall interest burden and shorten the repayment period.

Financial advisors or loan counselors can provide guidance and help you make informed decisions. Being diligent and well-prepared will increase your chances of successfully obtaining an education loan and pursuing your academic goals in the USA.

Documents required for securing a student loan

When applying for a student loan in the USA as an Indian student, you will typically need to gather several important documents. These documents serve as proof of your eligibility, financial standing, and academic background. Here are the essential documents required for securing a student loan in the USA:

• Admission Letter: A letter from an educational institution in the USA confirming your admission to a specific program.
• Cost of Attendance: A document indicating the total estimated cost of attendance for your chosen program, including tuition fees, living expenses, books, and healthcare.
• Academic Records: Transcripts, mark sheets, and certificates from your previous educational institutions demonstrating your academic performance and qualifications.
• Standardized Test Scores: Test scores from standardized exams such as the SAT, ACT, GRE, or GMAT, depending on the program and institution requirements.
• Proof of Identity: Valid identification documents such as a passport or government-issued ID.
• Proof of Address: Documents verifying your current residential address, such as a utility bill or bank statement.
• Income and Employment Proof: Evidence of your or your family's income and employment, including salary slips, tax returns, employment contracts, or business documents.
• Bank Statements: Statements from your bank account(s) for a specific period demonstrate your financial stability and ability to meet repayment obligations.
• Co-Applicant Information: If required, details and documents of the co-applicant, such as their income proof and identification documents.
• Collateral Documents (if applicable): In the case of secured loans, documents related to the proposed collateral, such as property deeds, valuation certificates, and insurance details.
• Loan Application Form: The completed loan application form provided by the lender, including personal and financial details.

Keep copies of all submitted documents for your reference and maintain open communication with the lender throughout the application process.

Loan Application Process

Applying for an education loan in India involves several steps, from researching lenders to submitting the required documents. 

Below are the steps toward the right path -

Research and Compare Lenders:

• Research different banks and financial institutions that offer education loans.
• Compare interest rates, loan features, repayment terms, and customer reviews to identify the most suitable options.

Determine Eligibility:

• Understand the eligibility criteria set by each lender, including academic requirements, admission to recognized institutions, and co-applicant requirements.
• Evaluate your eligibility based on these criteria.

Gather Required Documentation:

Collect the necessary documents, such as academic records, admission letters, identity proof, address proof, income proof, and collateral-related documents (if applicable).

Fill Out the Application Form:

• If the loan requires collateral, the lender will evaluate the value and validity of the proposed collateral.
• Once the application is submitted, the lender will review your documents and assess your eligibility.
• After acceptance, the lender will disburse the loan amount as per their disbursement process, either to your account or directly to the educational institution.

Interest Rates: Different lenders offer varying interest rates. Comparing loan offers helps you identify the most competitive interest rate, saving you money in the long run.

Loan Features: Loan features such as repayment options, moratorium periods, and processing fees can differ across lenders. By comparing offers, you can choose the loan with the features that best suit your needs.

Repayment Terms: Loan repayment terms, including the duration of the repayment period, can impact your monthly installment amounts and overall loan cost. Comparing offers allows you to select the most favorable repayment terms.

Customer Service: Evaluating customer reviews and experiences with different lenders gives you insights into their level of customer service and support. Opting for a lender with excellent customer service can make your loan experience smoother.

Loan Amount and Interest Rates

Loan amount determinants:.

• Cost of Education: The loan amount is influenced by several factors. Lenders consider these expenses to ensure that the loan covers the student's financial needs throughout their educational journey.
• Living Expenses: The loan amount may also factor in living expenses. Lenders assess the estimated cost of living based on the location and duration of the study program.
• Collateral Availability: If the loan is secured by collateral, such as property or fixed deposits, the value and availability of the collateral may impact the loan amount. Lenders typically provide a percentage of the collateral's value as the loan amount.

Interest Rate Calculation:

• Base Rate: Lenders determine the base rate, which serves as the foundation for calculating the interest rate. The base rate is influenced by various factors, including market conditions, economic indicators, and the lender's own policies.
• Spread or Margin: The lender adds a certain percentage, known as the spread or margin, to the base rate. This additional amount represents the lender's profit and covers their operational costs and risks.
• Creditworthiness: The borrower's creditworthiness plays a significant role in determining the interest rate. Lenders assess factors such as the borrower's credit score, income stability, employment history, and repayment capacity. A higher creditworthiness may lead to a lower interest rate.

Interest Rate Options:

• Fixed Interest Rate: With a fixed interest rate, the rate remains constant throughout the loan tenure. This provides predictability and stability as the borrower's monthly installment remains unchanged. However, fixed rates are typically higher than floating rates.
• Floating Interest Rate: Also known as variable or adjustable rates, floating interest rates fluctuate based on market conditions and benchmark rates. Changes in benchmark rates, such as the base rate or the Marginal Cost of Funds-based Lending Rate (MCLR), impact the interest rate. Floating rates offer the potential for lower rates but come with the risk of increased installments if rates rise.
• Hybrid Options: Some lenders offer hybrid options that combine features of fixed and floating rates. For a certain period, the interest rate remains fixed, providing stability. After the fixed period ends, the rate converts to a floating rate, allowing for potential adjustments based on market conditions.

Government Scholarships and Loan Schemes

Government scholarships and loan schemes play a significant role in providing financial support to Indian students pursuing higher education in the USA. These schemes aim to encourage academic excellence, promote international collaborations, and ensure access to quality education. Here are some key points about government scholarships and loan schemes available for Indian students studying in the USA:

• Government Scholarships: Various government departments and organizations in India offer scholarships specifically designed for students studying abroad. 
• Government Loan Schemes: Government-backed loan schemes provide financial assistance to students who are unable to secure education loans through traditional banking channels. These schemes offer loans at lower interest rates, flexible repayment terms, and simplified application processes.

Eligibility Criteria, Application Procedures, and Benefits

• Eligibility Criteria: Each scholarship or loan scheme has its own eligibility criteria, which may include academic performance, admission to recognized institutions, income limitations, and other specific requirements. It is important to carefully review and fulfill the eligibility criteria before applying.
• Application Procedures: The application procedures for government scholarships and loan schemes typically involve submitting an online application form along with supporting documents. These may include academic records, admission letters, income certificates, and identity proofs. Applicants may need to undergo a selection process, such as interviews or written tests.
• Benefits: Government scholarships and loan schemes offer several benefits to Indian students studying in the USA, including:
• Financial Assistance: These schemes provide financial support for tuition fees, living expenses, travel costs, and other educational expenses, reducing the financial burden on students and their families.
• Lower Interest Rates: Government-backed loan schemes often offer loans at lower interest rates compared to private lenders, making education more affordable.
• Flexible Repayment Options: Loan schemes may provide flexible repayment options, such as extended repayment periods or income-based repayment plans, ensuring that students can repay the loan comfortably after completing their education.

Examples of Popular Government Scholarships and Loan Schemes:

• Ministry of Education Scholarship Schemes: The Indian Ministry of Education offers various scholarships for Indian students pursuing higher education abroad.
• Indian Bank's Abroad Education Loan: Indian Bank offers the Abroad Education Loan scheme, providing financial assistance to students studying abroad, including in the USA. The scheme offers competitive interest rates, flexible repayment options, and a simplified application process.
• State Government Scholarships: Several state governments in India offer scholarships and financial assistance to students pursuing higher education abroad. These schemes vary by state and may have specific eligibility criteria and benefits.

It is important for students to thoroughly research and explore the available government scholarships and loan schemes, as well as their specific terms and conditions. Consulting with educational advisors or financial aid offices can provide further guidance on the application process and help students make the most of these opportunities for financial support.

Read More About-  Choose Your IELTS Path: Academic or General

Top Benefits of Taking an Education Loan for the USA

Taking an education loan for studying in the USA offers several benefits that make it a viable option for Indian students. Here are the top benefits of taking an education loan for studying in the USA:

• Access to Quality Education: Education loans enable students to pursue higher education in renowned universities and colleges in the USA, known for their academic excellence and global recognition.
• Build Credit History: Education loans offer students an opportunity to establish and build their credit history. By making timely loan repayments, students can develop a positive credit record, which can be beneficial for future financial endeavors.
• Flexible Repayment Options: Most education loans offer flexible repayment options, allowing students to choose a repayment plan that suits their financial capabilities. Options such as moratorium periods, extended repayment terms, and income-based repayment plans provide flexibility and ease the burden of repayment after completing studies.
• Bridge the Funding Gap: Education loans help bridge the gap between the total cost of education and the financial resources available to students and their families. They fill the void by providing the necessary funds to pursue education without compromising on quality or opportunities.
• Focus on Studies: By securing an education loan, students can focus solely on their studies and academic pursuits rather than being burdened by the financial responsibilities of education expenses. This enables them to dedicate their time and energy to excel academically.

It is important for students to carefully consider the terms and conditions of education loans, including interest rates, repayment terms, and associated costs. Conducting thorough research, comparing loan options, and seeking guidance from financial advisors can help students make informed decisions and maximize the benefits of an education loan for studying in the USA.

In conclusion, this blog post has provided a comprehensive guide on education loans for Indian students studying in the USA. Let's recap the main points discussed:

• Rising Trend: The number of Indian students pursuing higher education in the USA is on the rise, presenting a valuable opportunity for academic and personal growth.
• Financial Challenges: Studying abroad comes with significant financial challenges, including tuition fees, living expenses, and other educational costs.
• Importance of Education Loans: Education loans play a crucial role in overcoming these financial challenges and ensuring access to quality education in the USA.
• Loan Types: Students have access to different types of education loans, including secured and unsecured loans, as well as loans offered through government schemes.
• Loan Application Process: The loan application process involves thorough research, understanding eligibility criteria, gathering the necessary documentation, and submitting the loan application form.
• Comparing Loan Offers: It is crucial for students to compare loan offers from different banks or financial institutions to find the most favorable terms, interest rates, and repayment options.
• Cost of Education: Understanding the components of the cost of education, such as tuition fees, living expenses, books, and healthcare, is essential for effective financial planning and budgeting.
• Government Scholarships and Loan Schemes: Indian students can explore various government scholarships and loan schemes that provide financial assistance, lower interest rates, and flexible repayment options.
• Loan Amount and Interest Rates: Loan amounts are determined based on the cost of education, living expenses, and collateral availability, while interest rates are calculated based on base rates, creditworthiness, and the chosen rate type (fixed or floating).
• Thorough Research: Students are encouraged to thoroughly research and evaluate their loan options, considering factors such as interest rates, repayment terms, and associated costs before making a decision.

Remember, education loans are long-term investments in one's education and future. By taking the time to evaluate options and make informed decisions, students can embark on their educational journey in the USA with confidence and pave the way for a successful and fulfilling future.

Frequently Asked Questions

What do international student loans cover.

International student loans typically cover various educational expenses, including tuition fees, living expenses, books and supplies, healthcare, and travel costs. The specific coverage may vary depending on the loan program and lender. It is important for students to review the terms and conditions of the loan to understand what expenses are eligible for coverage.

Are there education loans in the USA for Indian Students?

Yes, there are education loans available in the USA specifically designed for Indian students. These loans are offered by various financial institutions, both private and government-backed. Indian students can explore these loan options to secure financial assistance for their education in the USA, covering tuition fees, living expenses, and other related costs.

Why it's hard for Indian students in us to get a loan?

Indian students in the US may face challenges in obtaining loans due to factors such as limited credit history, absence of collateral, and unfamiliarity with the US financial system. Additionally, some lenders may have specific eligibility criteria or prefer to lend to US citizens or permanent residents. 

How to Get a Personal Loan for Indian Students in the US?

Getting a personal loan for Indian students in the US may require demonstrating creditworthiness, a stable source of income, and a good credit score. Building a positive credit history, establishing relationships with local banks or credit unions, and providing necessary documentation, such as proof of enrollment and income, can increase the chances of securing a personal loan. 

What is an education loan, and why do I need it for studying in the USA?

An education loan is a type of financial aid specifically designed to support students in funding their education expenses. It provides the necessary funds to cover tuition fees, living expenses, books, and other related costs. 

What happens if I face difficulty in repaying the loan after completing my studies?

If you face difficulty in repaying the loan after completing your studies, it is crucial to communicate with your lender as soon as possible. Depending on the loan terms, options such as deferment, forbearance, or loan restructuring may be available to adjust or suspend your loan payments temporarily.

• Divisha Jain
• July 27,2023

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Student-loan borrowers just got 2 extra months to benefit from a temporary debt relief reform

• The Education Department extended the deadline for student-loan borrowers to benefit from account adjustments.
• Borrowers now have until June 30 to consolidate their loans, giving them an extra 60 days.
• The department expects adjustments to be fully implemented in September. 

President Joe Biden's Education Department is giving student-loan borrowers more time to get closer to debt cancellation .

On Wednesday, the Education Department announced that it's extending the deadline for borrowers to benefit from the one-time account adjustments . These adjustments are intended to bring payment progress up to date for those on income-driven repayment plans and Public Service Loan Forgiveness.

To receive the account adjustment automatically, borrowers must be in the federal direct loan program or have federally held loans in the Federal Family Education Loan program. Borrowers without those types of loans previously had until April 30 to consolidate into one of those programs to benefit, but now, the department is extending that deadline to June 30.

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"The Department is working swiftly to ensure borrowers get credit for every month they've rightfully earned toward forgiveness," Under Secretary of Education James Kvaal said in a statement. "FFEL borrowers should consolidate as soon as possible in order to receive this benefit that has already provided forgiveness to nearly 1 million borrowers."

The department wrote in prior guidance that it could take at least 60 days to process consolidation applications, which is why it recommends borrowers do so as early as possible to benefit from the adjustment. Borrowers can apply for consolidation on the Federal Student Aid website here .

According to the department, adjustments will be fully implemented in September 2024, after which borrowers should see "a full and accurate count of their progress toward loan forgiveness."

Borrowers in PSLF can also get credit toward the program for any months covered by the account adjustments as long as they continue to certify that they work for a qualifying nonprofit or government employer.

The adjustments began in August 2023 following evidence that servicers were not accurately tracking borrowers' payment progress, causing some of them to miss out on loan forgiveness despite completing their qualifying payments. Since the adjustments began, according to the department, 996,000 borrowers have received $49.2 billion in debt relief .

Along with the account adjustments, the Education Department is also implementing relief through the SAVE income-driven repayment plan using a provision that cancels remaining balances for borrowers with an original balance of $12,000 or less and makes as few as 10 years of qualifying payments.

More broadly, the department is working to implement its broader version of student-debt relief after the Supreme Court struck its first plan down. The public comment period for the new plan — expected to benefit over 30 million borrowers — ends on Friday, after which the department will move toward final implementation as early as this fall.

Watch: Why student loans aren't canceled, and what Biden's going to do about it

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Don’t let finances hold you back from enrolling yourself in your dream institute. Let us take charge of your finances with a range of student loans. We, at IDFC FIRST Bank, understand your ambitions and acknowledge your merit. We are driven to help you with financial aid to make your journey hassle-free. Our competitive student loan interest rates make us a better choice in the industry. Find out more on our latest rates here . Read More

After extensive research on the requirements and challenges faced by the students, we are proud to present IDFC FIRST Bank’s Education Loan, aimed at providing financial support for education in India and overseas. Read Less

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Why should i take an education loan.

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• Strengthen your credit history
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Our all-new application process offers the convenience of applying through various modes including:

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If you are unsure about your eligibility for an education loan, you can check your eligibility by entering your application information online, and we'll assist you throughout the journey. IDFC FIRST Bank’s eligibility criteria for student education loans:

• You should be an Indian National (includes NRI)
• You should be 18 years old or above
• You should have secured admission in your desired Institution/Course
• In case you have not secured admission, you can opt for a pre-admission sanction

IDFC FIRST Bank Ltd. helped me avail an education loan from them in a simple, smooth, and seamless way. Read More

The team explained the procedure patiently, answered all my queries and were very flexible in accommodating my requests, which normally does not happen with other financial institutions. The team is proactive and courteous, all the documentation was hassle free and services were provided right at the doorstep. Read less.

Neha Dadhich QUEENS UNIVERSITY, Belfast (2022-23)

Hello Guys, my name’s Siddhesh Wagh and I’m from Thane. My main motive behind this video is to thank to IDFC FIRST Bank and Ganesh sir who is my education loan assistant. Read More

Since childhood I always dreamt of completing my higher education abroad but due to the financial problem it is very difficult for the middle-class family student but IDFC FIRST Bank & Ganesh sir helped me to fulfil my dream by providing an unsecured loan. Ganesh sir has provided generous assistance throughout the loan process right from the application process to the disbursement of the loan; also IDFC FIRST Bank provides all this education loan services at your home from opening the bank account to signing the agreement. So, I would like to advise you all to grab this opportunity to fulfil your dream. Once again, thank you IDFC FIRST Bank & Ganesh sir. Read less.

Siddhesh Wagh MASSEY UNIVERSITY, (2022-26)

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Ashish Bhanushali GEORGIAN COLLEGE, Canada (2022-26)

Hi I am Riddhi Bajaj and I’m pursuing my masters from National University of Singapore. For me the idea of transforming businesses with the result-oriented approach draws me to entrepreneurship. Read More

Being an independent woman, I am no stranger to my privileges, which is why I wish to make a difference in lives of those in need; especially women who do not get the same opportunities. IDFC First bank supported me in taking my first step towards turning this dream into a reality. Their super supportive team stepped in & helped me sail through this otherwise taxing process with ease. They guided me through all the steps with patience and honesty. I have nothing but immense gratitude for each & every one who made this possible. Thank you for everything. Read less.

Riddhi Bajaj NATIONAL UNIVERSITY OF SINGAPORE (NUS) (2022-23)

I had dreamed of studying and becoming a successful person in my life. I always wanted to study abroad but coming from a normal family it was difficult for me to pay such a huge amount for paying my fees. After receiving an offer from my college in canada i came across IDFC bank educational loan. Read More

I applied for it and the people assisting me with the process were so understanding and helpful. Tanvi ma'am helped me with the process from start to end till my loan amount was credited to my account. She is still helping me out with all my queries. The total amount of 32,00,000 was sanctioned which covered all my expenses and i was able to achieve my dream. The tenure is 12 years and with really nominal rate of interest. I would like to thank you sincerely to tanvi ma'am and other people who have helped me along the way. I have a very positive experience with IDFC Bank and will always recommend IDFC bank for any financial requirements to my family and friends. Read less.

Priyal Khuman CONESTOGA COLLEGE, Canada

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FREQUENTLY ASKED QUESTIONS

What is an education loan.

An Education Loan is a sum borrowed by students to cover the financial requirements for completing their selected academic course. Education Loans are primarily provided by banks and NBFCs and can be used to cover college-related fees as well as other education related expenses such as living expenses, insurance costs, the purchase of computers and uniforms, and so on.

Why should I take an Education Loan ?

There are numerous benefits of availing an Education Loan, some of which are stated here :

Low interest rates - When compared to interest rates on other loans, Education Loan interest rates are often on the lower side.

Flexible repayment - Unlike Education Loans, most loans require monthly repayment of EMIs as well as interest. The Education Loan's moratorium / partial interest payment period is relatively long, lasting till the course is completed plus an additional grace period.

Tax advantages - Education Loans also provide appealing income-tax advantages. Under Section 80E of the Income Tax Act of 1961, the interest paid on an Education Loan is entirely deductible.

Improve credit history - Regular loan repayment can help students enhance their credit history. Building a great credit history through an Education Loan can be beneficial when attempting to achieve other life goals such as purchasing a home or a car through loans. 

What are the steps involved in getting an Education Loan?

The following are the stages involved in getting an Education Loan:

• Determine the college expenses and total financial support you need.

• Research your options and consider which Education Loan is best suited to your needs.

• Some critical parameters to consider when selecting an Education Loan are: Education Loan interest rates, repayment terms, loan tenure, and eligible amount (secured & unsecured loans).

• Before applying for a loan, it is advisable to use an Education Loan EMI calculator to estimate the loan amount you can afford.

• Collect all essential documentation for an Education Loan and apply in accordance with the lending institution's guidelines.

• The lender will take some time to check the information given in accordance with the predetermined process.

• Lenders often assess the applicant's and co-applicant's ability to repay the loan, as well as their financial background, as well as the student's previous academic records and the reputation of the educational institution to which the student has applied.

What are the expenses covered under Education Loan?

The IDFC FIRST Bank Education Loan amount would cover the following course expenses:

College related expenses/ Cost of education:

• Tuition and fees payable to the institute 

• Examination / library / laboratory fees

• Living expenditures (including Hostel fees)

Additional expenses:

• Travel expenses

• Purchase of computers, laptops, books, equipment, or uniforms

• Overseas Insurance

• Health Insurance

Will my Student Loan cover additional expenses, if I choose to study in India?

Yes. Apart from the college-related expenses, our Student loans also cover travel expenses, purchase of computer/laptops and insurance costs for domestic as well as international courses 

What are the advantages of taking an Education Loan from IDFC FIRST Bank?

There are several advantages in availing student loans from IDFC FIRST Bank.        

With our ALWAYS YOU FIRST principle, you will enjoy:  

• Education Loans available up to INR 1 Cr.*

• Collateral free loans up to INR 50 lakhs*

• Up to 100%* financing

• Flexible repayment options

• Hassle-free education financing fulfilled at your doorstep

• Customized solutions tailored as per your needs

• Income tax benefits under section 80E  

*T&C Apply

What is the maximum loan amount I can get?

IDFC FIRST Bank Education Loan is available up to INR 1 Crore*.

What is the loan period for IDFC FIRST Bank’s Education Loan?

IDFC FIRST Bank provides a flexible loan period of up to 15 years, making Education Loan payments simple.

Do I need to provide any margin money?

IDFC FIRST Bank offers up to 100%* financing. The amount of margin money is subject to the IDFC FIRST Bank's policy.

What kind of courses are funded by IDFC FIRST Bank's Student Loan for studying abroad?

IDFC FIRST Bank's Student Loan for studying abroad includes a wide range of courses at the undergraduate and postgraduate levels. Technical and professional courses given by accredited universities and autonomous institutions are included on the list. We sponsor education for executive, part-time, vocational, and diploma courses in addition to full-time studies.

Which countries are eligible for an Education Loan for study abroad?

IDFC FIRST Bank's Education Loan for studying abroad can be used to study in a variety of countries, including the United States, the United Kingdom, Canada, Australia, Germany, New Zealand, Singapore, and others. To obtain the complete list of countries, please contact an IDFC FIRST Bank representative.

What documents are required to apply for an Education Loan?

The following documents are required for an Education Loan:

• Fully filled application form

• Photo Id proof

• Proof of residence

• Passport sized photograph

• Proof of admission / entrance exam score e.g. GRE, IELTS, GMAT etc.

• Fee structure document

• Salary slips of experienced candidates

• Visa copy for overseas education (Pre-visa documents in case visa not received)

• Academic documents

Co-applicant:

• Last 6 months’ bank statements, if required

• Relationship proof

• Balance fund proof

• Residence ownership proof

• Collateral documents, if applicable

• Income proof, if applicable

How is the IDFC FIRST Bank's interest rate on an Education Loan calculated?

The IDFC FIRST Bank Education Loans are tied to the Repo rate.

(The repo rate is the rate of interest at which the government lends money to commercial banks. To compensate the numerous costs involved, banks charge a spread above the repo rate to arrive at the interest rate.)

Education Loan interest rates that are tied to the repo rate are subject to change anytime the repo rate changes.

How can I check my Education Loan EMI amount?

Click here to use our Education Loan EMI Calculator on our website to see how your EMI will be calculated.

Who is eligible for IDFC FIRST Bank’s Student Loan?

IDFC FIRST Bank's Student Loan eligibility conditions are as follows:

• You must be an Indian national (including an NRI)

• You must be 18 years old or older 

• You must have obtained admission in the authorized institution/course

• If secured admission is not available, you can obtain a pre-admission sanction

How can I apply for an Education Loan from IDFC FIRST Bank?

We have simplified the procedure so that applicants can apply through various channels such as our website, branch, mobile application, and customer service.

You can also apply through FIRST UNI, IDFC FIRST Bank's one-stop shop for education financing. FIRST UNI provides individual support through a buddy and connects you with an expert counsellor for writing SOP, building resumes, test preparation, and much more.

• IDFC FIRST Bank Website: https://www.idfcfirstbank.com/edu-lead-creation-new-page

• FIRST UNI Mobile App: https://firstuni.onelink.me/RfBJ/homepagev1

• FIRST UNI Website: https://www.firstuni.in/finance/loan/Availsimplestep

• Customer Care: 1800 10 888

• IDFC FIRST Bank Branch Locator: https://www.idfcfirstbank.com/support/branches

What is the Education Loan process at IDFC FIRST Bank?

IDFC FIRST Bank's Education Loan application procedure is as follows:

Step 1 - Simple application and documentation

1. Submit your request for an Education Loan on the IDFC FIRST Bank website, in person at a branch, or by calling the customer service number.

2. Submit your and your co-applicant's documents to your Relationship Manager, as applicable.

Step 2 - Quick Approvals

Wait for loan approval; each lender has a specific process for sanctioning an Education Loan that includes verification of the information provided.

Step 3 - Disbursement

Plan your disbursement once your loan has been accepted in accordance with the requirements of your academic session or VISA application.

Can I submit my Education Loan application at an IDFC FIRST Bank branch?

Yes, You can visit your nearest IDFC FIRST Bank branch to submit a fully completed application form. The Education Loan application form is available on the IDFC FIRST Bank website at: https://www.idfcfirstbank.com/support/form-center.

If you'd like a dedicated relationship manager to assist you in your Education Loan journey, click here.

When is the most suitable time to apply for an Education Loan?

It is recommended that you apply for an Education Loan well before the start of the academic session, even before your admission is confirmed, especially if you are studying abroad. It is preferable to keep a significant time frame available to avoid last-minute problems. You can determine your loan eligibility ahead of time and obtain a conditional sanction letter, which serves as financial assurance proof for the university, making your admission procedure easier.

Can I apply for an Education Loan before my acceptance has been confirmed?

Yes, you can apply for an IDFC FIRST Bank Education Loan even if your admission has not yet been confirmed. If your application is approved, you can receive a conditional sanction based on your academic profile.

Do I need a co-applicant for my Education Loan?

Yes, a co-applicant is required to avail IDFC FIRST Bank’s Education Loan.

Who can be my co-applicant?

Your co-applicant can be your parents, brother, sister, spouse, parents-in-law, grandparents, or maternal/paternal uncle/aunt.

Can I qualify for an Education Loan if I don't have an earning co-applicant?

IDFC FIRST Bank believes in your potential and offers an Education Loan based on your future earnings. However, according to IDFC FIRST Bank's policy, the co-applicant's income is necessary for assessment on a case-by-case basis.

Can an NRI resident or working in another country be added as a co-applicant on my Education Loan?

Yes, you can include your NRI parent/relative living overseas on your Education Loan structure as long as that person meets the remainder of the criteria for becoming a co-applicant as specified in the IDFC FIRST Bank policy.

Does my work experience factor into the approval of an Education Loan?

Yes, your work experience is one of the numerous factors that the Bank analyses when evaluating your profile for approval, particularly for applicants interested in pursuing executive education.

What effect does the reputation of the institute (college or university) have on the approval of an Education Loan?

When it comes to Education Loans, the reputation of the institute does make a difference. A higher rated college/university may provide you with better loan approval possibilities in terms of lower interest rates, greater loan amounts without collateral, flexible repayment alternatives, and a longer loan period.

Can I reapply next year if IDFC FIRST Bank rejects my Education Loan application this year?

Yes, you can reapply for an IDFC FIRST Bank Education Loan. The case  will be reassessed in accordance with IDFC FIRST Bank's policy.

Do I get any tax benefit on my Education Loan?

Yes, you can deduct interest paid on your Education Loan under Section 80E of the Income Tax Act of 1961.

How can I calculate how much money I'll save due to the tax benefit?"

To calculate your tax savings, click here . 

What is Section 80E of the Income Tax Act of 1961?

Section 80E of the Income Tax Act provides a tax benefit for people who take out Education Loans for higher education. It allows you to deduct the interest amount charged on an Education Loan EMI from your taxable income. According to Section 80E, the total interest paid on an Education Loan in a given fiscal year can be claimed as a deduction.

Who is eligible for tax exemption under Section 80E of the Income Tax Act of 1961?

Section 80E of the Income Tax Act states:

• This deduction is only available to individuals. It is not available to Hindu Undivided Families (HUFs) or any other type of taxpayer.

• The Education Loan should be used for the higher education of the individual, spouse, or children, or for a student whom the individual is the legal guardian.

• Parents can simply claim this deduction for loans obtained for their children's higher education. 

• Loans should be taken from a bank or a recognized financial institution; loans taken from friends or relatives are not eligible for deduction.

• The loan should be availed to pursue higher education.

What is the maximum exemption amount under Section 80E of the Income Tax Act?

There is no upper limit for exemption under section 80E; you can claim the entire interest amount paid on your Education Loan in a fiscal year as a deduction. Please refer to the most recent Income Tax Department guidance on Section 80E deductions.

What are the different IDFC FIRST Bank Education Loan repayment options?

IDFC FIRST Bank provides flexible repayment alternatives for student loans. According to IDFC FIRST Bank's policy, the repayment modes are applicable based on credit assessment.  There are several repayment options available, including:

• Immediate EMI - Begin repaying your loan as soon as the loan is disbursed.

• Simple Interest (SI) - Begin repaying accrued simple interest immediately, while you study. 

• Partial Simple Interest (PSI) - Begin repaying a portion of accrued simple interest immediately, while you study.

• Moratorium - Do not pay anything for the defined moratorium period.

What is the Moratorium / Partial Simple Interest (PSI) / Simple Interest (SI) period for an IDFC FIRST Bank Education Loan? How will my repayments be calculated?

The maximum Moratorium / Partial Simple Interest (PSI) / Simple Interest (SI) period offered is the course duration plus a grace period of 12 months. This is subject to the IDFC FIRST Bank's policy. At the time of repayment, the unpaid interest amount accrued during the moratorium or partial simple interest term will be applied to the outstanding principal loan amount. The EMI will be calculated based on the total amount. In the case of Simple Interest, the EMI is calculated using the outstanding principle amount.

Can I foreclose on my Education Loan? If so, what will the charges be?

Yes, you can foreclose your Education Loan at IDFC FIRST Bank without incurring any additional charges.

Is it possible to get a part-closure on an Education Loan with IDFC FIRST Bank?

Yes, IDFC FIRST Bank Education Loans offer a part-payment option at no extra cost.

What type of collateral does IDFC FIRST Bank accept?

We accept a variety of collaterals, as detailed in the IDFC FIRST Bank policy. Real estate properties such as houses and flats, as well as commercial properties such as office buildings and shops, are examples of assets that can be pledged to obtain a loan. Fixed Deposits, which are more liquid assets, are also accepted as collateral.

Is it necessary for me to offer collateral in order to obtain an Education Loan?

No it is not mandatory to offer collateral to obtain an Education Loan from IDFC FIRST Bank. The collateral requirement, on the other hand, is determined based on the requested Education Loan amount, institute classification, and applicant profile.

I already have an Education Loan with another Bank. Is it possible to transfer it to IDFC FIRST Bank?

Yes. You can use our Balance Transfer option to transfer your existing Education Loan to IDFC FIRST Bank.

Can I transfer an Education Loan from another financial institution/NBFC to IDFC FIRST Bank?

Yes, an Education Loan balance transfer from a Non-Banking Financial Company (NBFC) to IDFC FIRST bank is possible.

What are the benefits of transferring my Education Loan to IDFC FIRST Bank?

Transferring your Education Loan to IDFC FIRST Bank has several advantages.  

You can take advantage of benefits such as:   

• Enjoy up to 1%* lower rate of interest

• Education Loans up to INR 1 Cr.* 

• Collateral-free loans up to INR 50 lakhs*

• Up to 100%* financing available 

• Flexible repayment choices

• Hassle-free doorstep education financing  

• Customized solutions tailored to your specific need 

•  Income tax benefits under Section 80E

*Terms & Conditions Apply

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• Education Loans to Study in India /

What is an Education Loan in India: Meaning, Benefits & Process

• Updated on  
• Sep 14, 2023

Education is the cornerstone of personal and societal progress, yet the rising costs of higher education can often be a significant barrier. In India, students can avail themselves of education loans to finance their studies. This financial instrument facilitates access to quality education and plays a pivotal role in shaping the nation’s intellectual capital. The education loan in India covers the student’s basic course fee, accommodation, and exam fee. 

The education loan is available to students who wish to pursue education either within India or abroad. The specific funding limits for studying in India or overseas can differ among different banks. In this blog, we will talk about the education loan in India, their benefits, the process, and the interest rates. 

Also Read: Education Loans to Study Abroad for Indian Students

What is an Education Loan in India?

An education loan in India is a financial arrangement provided by banks or financial institutions to students who are looking to pursue higher education, both within India and abroad. This loan helps students cover various educational expenses, including tuition fees, course materials, accommodation, and other related costs. 

These loans often come with favorable terms and repayment options, making it easier for students to fund their education and achieve their academic goals.

Looking for Education Loans to Study Abroad? Reach out to FlyFinance

Benefits of Education Loan in India 

Education is a powerful tool that can shape one’s future, but the cost of pursuing higher studies can be a significant obstacle for many students in India. This is where education loans come into play. These financial instruments are designed to provide aspiring scholars with the necessary funding to pursue their dreams of higher education. Let’s explore the key benefits of education loans in India.

Financial Accessibility

Education loans make quality education accessible to a broader spectrum of students, irrespective of their financial background. They cover a wide range of educational expenses, including tuition fees, books, equipment, and living expenses, easing the financial burden on students and their families.

Competitive Interest Rates

Many banks and financial institutions offer education loans at competitive interest rates , often lower than personal loans or other forms of credit. This makes it cost-effective for students to borrow the necessary funds for their education.

Flexible Repayment Options

Education loans typically come with flexible repayment options. Students can often choose to start repaying the loan after they complete their studies or opt for a grace period, giving them time to find stable employment before beginning repayments. This flexibility ensures that students can focus on their studies without immediate financial stress.

Tax Benefits

Under section 80E of the Income Tax Act, the interest paid on education loans is tax-deductible, providing additional financial relief to borrowers and their families. This tax benefit can significantly reduce the overall cost of borrowing.

Credit Building

Successfully repaying an education loan can positively impact an individual’s credit history. This can be beneficial for future financial endeavors, such as securing housing loans or starting a business, as it demonstrates responsible financial behavior.

Check Out : Education Loan for Abroad Studies by Indian Government

Process of Obtaining an Education Loan in India

In India, pursuing higher education is a dream cherished by many, but the costs involved can often be a significant barrier. Thankfully, education loans provide a viable financial solution for students and their families.

Obtaining an education loan in India involves a structured process that, when followed diligently, can help aspiring scholars achieve their academic goals. Let’s delve into the key steps involved and the application process of obtaining an education loan in India.

• Research and Selection: Begin by researching various banks and financial institutions that offer education loans in India. Compare their interest rates, loan terms, and eligibility criteria. Choose the one that best suits your needs.
• Eligibility Check: Once you’ve selected a lender, review their eligibility requirements. These typically include criteria related to age, academic course, institution, and often a co-borrower or collateral. Ensure you meet these criteria.
• Application Form: Obtain the loan application form from your chosen lender or download it from their website. Fill out the application form accurately and completely. Be prepared to provide details about your course, institution, and financial requirements.
• Document Submission: Prepare a set of required documents, which may include proof of identity, residence, age, academic records, offfer letter from the institution, and income proof of the co-borrower (if applicable). Ensure all documents are in order and up to date.
• Loan Processing: Submit the completed application form and the required documents to the bank or financial institution. The lender will then assess your application, including your eligibility and the creditworthiness of your co-borrower (if applicable).
• Loan Approval: If your application meets the lender’s criteria and is approved, you will receive an education loan sanction letter specifying the loan amount, interest rate, and terms and conditions. Review this document carefully before proceeding.
• Collateral or Security (if applicable): If your loan requires collateral or security, provide the necessary documentation and assets as specified by the lender. This step is essential for securing the loan.
• Loan Disbursement: Once all formalities are completed and documentation is in order, the lender will disburse the loan amount directly to the educational institution to cover your academic expenses.
• Loan Repayment: Start repaying the education loan as per the agreed-upon terms and conditions. Many lenders offer flexible repayment options, such as a grace period post-course completion.
• Regular Communication: Maintain regular communication with your lender and stay informed about your loan status, repayment schedule, and any changes in interest rates or policies.

By following this structured process, aspiring students in India can secure the financial support they need to pursue higher education and realize their academic aspirations. It’s essential to plan and execute each step carefully to ensure a smooth education loan application and approval process.

In conclusion, education loans play a pivotal role in making quality education more accessible to students in India. They offer financial support, competitive interest rates, flexible repayment options, tax benefits, and an opportunity to build a strong credit history. These advantages collectively empower students to pursue their educational aspirations and pave the way for a brighter future.

Must Read: The Student Loan Eligibility for Study Abroad

Ans. An education loan in India is a financial product designed to provide monetary support to students pursuing higher education. It covers expenses like tuition fees, books, accommodation, and other related costs. These loans are offered by banks and financial institutions to help students, and sometimes even parents, manage the financial burden of education. They typically have favorable terms, including lower interest rates and flexible repayment options.

Ans. Eligibility criteria for education loans in India vary from lender to lender, but generally, the following factors are considered: 1. Indian Citizenship: The applicant should be an Indian citizen. 2. Academic Performance : For most loans, a good academic record is required. 3. Admission to Recognized Institutions: The student should have secured admission into a recognized course or institution, either in India or abroad. 4. Course and College Approval: Some lenders have specific lists of courses and colleges they support. 5. Co-signer (if required*: In some cases, a co-signer like a parent or guardian may be required, especially for larger loan amounts.

An education loan in India typically covers the following expenses: 1. Tuition Fees: This includes the basic fees charged by the educational institution. 2. Examination and Library Fees: Charges related to exams and access to the institution’s library resources. 3. Cost of Books and Study Materials: Expenses for textbooks, reference materials, and other study aids. 4. Accommodation and Living Expenses : If the student is staying in a hostel or rented accommodation, these costs may be covered. 5. Travel Expenses (if applicable): Some loans include provisions for travel expenses, particularly for students studying abroad.

We hope this article has provided you with all of the necessary information on the types of education loans for Indian Students . Get in touch with the experts at Leverage Edu to make the entire application process a breeze!

Aditi Gupta

A bachelors in Journalism and Mass Communication graduate, I am an enthusiastic writer. I love to write about impactful content which can help others. I love to binge watch and listen to music during my free time.

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Biden administration extends deadline to consolidate old student loans

Those with commercially held loans from the Federal Family Education Loan Program have until June 30 to consolidate and take advantage of a forgiveness initiative.

More than 3.5 million student loan borrowers who received funding under a defunct private program will have more time to consolidate their loans if they want to qualify for a one-time initiative that could wipe out their debt, the Education Department said Wednesday.

Borrowers with federal loans that originated through the Federal Family Education Loan Program (FFEL) will have until June 30 to consolidate, 60 days more than originally planned, the Education Department said.

The extension will throw a lifeline to borrowers who are shut out of debt-relief policies because their federal loans are held by private entities. FFEL ended in 2010. If borrowers with FFEL loans consolidate into the Direct Loan program — where loans are made and held directly by the federal government — they can access the Biden administration’s payment-count adjustment that could result in debt relief.

“The department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” said Undersecretary of Education James Kvaal. “FFEL borrowers should consolidate as soon as possible in order to receive this benefit that has already provided forgiveness to nearly 1 million borrowers.”

The adjustment, launched in April 2022 , temporarily waives the rules of income-driven repayment plans to retroactively credit borrowers with additional payments toward loan forgiveness. It is an effort to rectify years of mismanagement of the plans, which cap monthly payments at a percentage of earnings and forgive the remaining balance after 20 or 25 years.

A 2022 Government Accountability Office report found that decades of poor record-keeping, misleading information and miscommunication between the Education Department and its loan servicers left people repaying their loans for much longer than necessary.

In response to the findings, the Biden administration said any month in which borrowers were in repayment would count toward forgiveness, regardless of how much they paid, the repayment plan or if they were delinquent on the debt. The waiver applies to debt in the Direct Loan program and FFEL managed by the Education Department, but requires borrowers with commercially held FFEL loans to convert their debt with the promise of getting credit for time in repayment before consolidation. Anyone who satisfies the required number of years for forgiveness receives automatic loan cancellation.

To date, the Education Department has approved nearly $50 billion in forgiveness for more than 996,000 borrowers through the initiative. The federal agency said Wednesday it would finish adjusting borrowers’ payment counts in September, two months later than anticipated, giving a full and accurate count of their progress toward debt relief.

“Without this extension, millions of borrowers who could benefit from the [income-driven repayment] account adjustment will be cut off from relief,” said Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center. “For many, this extension could make the difference between being debt free and years of additional payments.”

Before it ended, FFEL was a $60 billion program in which private lenders used their own money to finance loans, while the government paid a portion of the interest and guaranteed the debt. The Education Department purchased some of the bank-based debt to keep the program going when the 2008 recession threatened the liquidity of private lenders.

Student loans

The latest: President Biden announced a new student loan forgiveness plan , holding firm to a campaign promise to ease the burden of college debt despite past court setbacks. Additionally, changes to the Public Service Loan Forgiveness program will help teachers, social workers and other public servants have an easier time navigating the debt relief effort.

What are my student loan repayment options? Many borrowers say they are stressed after the restart of student loan payments . Personal finance columnist Michelle Singletary shares what to focus on as student loan payments resume and why she says President Biden’s new SAVE student loan income-driven plan is a game changer .

What’s next for student loan debt relief? Biden is forging ahead on a new path to narrower student loan relief after the Supreme Court rejected his earlier loan forgiveness plan . Meanwhile, conservative groups sued to block Biden’s effort to provide $39 billion in forgiveness to longtime borrowers.

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Apply Online in India for Studies abroad (above Rs. 20 lakhs) | SBI - Personal Banking

Studies abroad (above Rs. 7.50 lakhs)

• Documents Required

Eligible Courses - Studies Abroad

Regular Graduate Degree/Post-Graduate Degree/Diploma/Certificate/Doctorate Courses in any discipline offered by foreign Institutes/Universities in USA, UK, Canada, Australia, Singapore, Japan, Hong Kong, New Zealand and Europe [Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom] will be covered under the scheme.

Eligible Expenses

• SBI Global Ed-Vantage is an overseas education loan exclusively for those who wish to pursue full time regular courses at foreign colleges/universities. Key features include :
• Faster: Online application process
• Lighter: Attractive interest rate
• Higher: Loan amount Upto Rs. 1.50 Crores
• Easier: Repayment through EMI upto 15 years
• Early Approval: loan sanction prior to i20/Visa
• Tax Benefit: under section 80(E)
• Get the SBI Global Ed-Vantage today! Study abroad and challenge the world!
• Fee payable to college/school/hostel.
• Examination/Library/Laboratory fee.
• Travel expenses/passage money for studies abroad.
• Purchase of books/equipments/instruments/uniforms/ computer at reasonable cost, if required for course completion and any other expense required to complete the course– like study tours, project work, thesis, etc. can be considered for loan subject to the condition that these should be capped at 20% of the total tuition fees payable for completion of the course.
• Caution deposit /building fund/refundable deposit supported by Institution bills/receipts the amount considered for loan should not exceed 10% of the tuition fees for the entire course.
• Premium of ‘RiNn Rakhsha’ (IRDA License No: UIN: 111N078V01): Finance for ‘RiNn Rakhsha’ will improve insurance-coverage of the loan
• Minimum Loan Amount: Above Rs. 7.50 Lacs
• Maximum Loan Amount: Rs. 1.5 Cr
• Margin : Scholarship/assistantship to be included in margin.
• Margin to be brought in on year-on-year basis as and when disbursements are made on a pro-rata basis.
• Processing Fee : Rs. 10,000/- per application.
• Simple Interest will be charged during Course Period + Moratorium Period
• Please click here to Rate of Interest
• Tangible collateral security
• Collateral security offered by Third Party (other than parents) can also be accepted

Repayment And Repayment Holiday (Moratorium)

• Accrued interest during the moratorium to be added to the principal and repayment in EMI fixed.
• Repayment will commence 6 months after completion of course
• Repayment upto maximum of 15 years

Checklist of Documents to be submitted along-with duly filled Loan Application Form

• Mark sheet of 10th, 12th, Graduation (if applicable), Entrance Exam Result
• Proof of admission to course [ Offer Letter/ Admission Letter/ ID card if available]
• Schedule of expenses for course
• Copies of letter conferring scholarship, free-ship, etc.
• Gap certificate, if applicable (self-declaration from student for gap in studies)
• Passport size photographs of Student / Parent / Co-borrower / Guarantor (1copy each)
• Asset-Liability Statement of Co-applicant / Guarantor (Applicable for loans above Rs 7.50 lacs)
• (a) Latest Salary Slip
• (b) Form 16 OR latest IT Return (ITR V)

For other than Salaried Person:

(a) Business address proof (if applicable)

(b) Latest IT Returns (if applicable)

• Bank Account Statement for the last six months of Parent / Guardian/ Guarantor
• Copy of Sale Deed and other documents of title to property in respect of immovable property offered as collateral security / Photocopy of Liquid Security offered as collateral
• Permanent Account Number (PAN) of Student / Parent / Co-borrower / Guarantor
• AADHAAR (mandatory, if eligible under various interest subsidy schemes of GOI)
• Passport (mandatory for Studies Abroad)
• Submission of OVD (refer to table below)

At least one self-attested copy of the Officially Valid Documents (OVD) mentioned below to be submitted, as proof of identity and address:

• Driving license,
• Proof of possession of Aadhaar Number,
• Voter's Identity Card issued by Election Commission of India,
• Job card issued by NREGA duly signed by an officer of the State Government,
• Letter issued by the National Population Register containing details of name and address

If the OVD furnished by the customer does not contain updated address, the following documents shall be deemed to be OVDs for the limited purpose of proof of address:

• Utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
• Property or Municipal tax receipt;
• Pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public-Sector Undertakings, if they contain the address;
• Letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial Institutions, listed companies and lease and licence agreements with such employers allotting official accommodation.

[Provided that the customer shall submit OVD updated with current address within a period of three months of submitting the above documents]

Last Updated On : Monday, 15-06-2020

• Interest Rates

8.50%* p.a. onwards

w.e.f. 05.04.2024

*T&C Apply.

11.15% p.a.*

less than Rs.10 Cr. w.e.f 15.10.22

Rs.10 Cr. and above w.e.f 15.10.22

Starts From 8.75%*

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SBI Gold Loan

*T & C Apply

Starts From 7.90%

SBI Personal Gold Loan

Loan amount up to Rs. 3 lakhs

> Rs. 3 lakhs & up to Rs. 5 lakhs

Balance below Rs. 10 crs

Balance Rs. 10 crores and above

8.15% p.a.*

(On Applying through YONO)

2 years to less than 3 year

5 years and up to 10 years

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HECS indexation to be overhauled in budget with $3 billion in student debt 'wiped out'

Millions of Australians with student loans will have hundreds of dollars wiped from their HECS debts as the federal government rolls out its plans for cost-of-living relief in the upcoming budget.

Every June HECS debts are indexed and bumped up a few percentage points to make sure the amount owed keeps up with inflation.

For almost 35 years indexation has been calculated based on the Consumer Price Index (CPI), which is now at historic highs.

Last year's 7.1 per cent increase was the largest hike since 1990 leaving some in a debt spiral with loans increasing faster than they could be repaid .

Annual HECS indexation will now be calculated on whichever figure is lower out of CPI and the Wage Price Index (WPI).

The policy will be backdated to June 1 2023, which means last year's 7.1 per cent indexation will be lowered to the WPI of 3.2 per cent.

"This will wipe out around $3 billion in student debt from more than three million Australians," Education Minister Jason Clare said.

HECS debt indexation to 'wipe out what happened last year'

The government released a wide-ranging review of higher education called the Australian Universities Accord earlier this year.

It warned student debt levels, which had reached $74 billion, were turning people off universities and recommended making HECS "simpler and fairer".

Among its recommendations was indexing HELP loans to whichever was lower out of CPI and WPI.

Mr Clare said adopting the reform and backdating it to last year would help ensure HECS debts did not rise faster than wages in future.

"This will wipe out what happened last year and make sure it never happens again," he said.

Students and graduates had been bracing for another large indexation hit this year of about 4.7 per cent .

The increases had led to a growing backlash with some students so despondent they were considering leaving the country .

How much will you save on your HECS debt?

Instead of another dreaded rise, students will now receive an indexation credit.

Last year's indexation rise of 7.1 per cent will be lowered to 3.2 per cent under the new policy.

For a student with the average debt of $26,494 that means an indexation credit of about $1,200 for the last two years if legislation reforming HECS is passed after the budget.

The debt relief will also apply to apprentices who owe money through the VET Student Loan program or Australian Apprenticeship Support Loan.

These loans work in a similar way to HECS but for young people undertaking a course at TAFE or an independent higher education provider.

According to the latest available figures from 2022 around 30,000 students owed about $220 million.

"This continues our work to ease cost-of-living pressures for more apprentices, trainees and students, and reduce and remove financial barriers to education and training," Skills and Training Minister Brendan O'Connor said.

"By backdating this reform to last year, we're making sure that apprentices, trainees and students affected by last year's jump in indexation get this important cost-of-living relief."

Wider university reforms may be ahead in the budget

There will likely be more money to fund wider-ranging changes to universities recommended in the government's Accord review.

Its other recommendations included:

• reviewing bank lending practices so that HECS debts didn't prevent people from borrowing money to buy a house
• changing the timing of indexation so it occurred after annual compulsory payments
• repealing the previous governments Job-ready Graduates program which increased the cost of some degrees and lowered others

The Greens have been pushing the government to go further and may demand further changes to support the legislation in the Senate.

As cost-of-living pressures have grown, so too has momentum for change.

A recent petition from MP Monique Ryan calling for indexation changes attracted more than 285,000 signatures.

Shadow Education Minister Sarah Henderson has also called for the government to act .

The government's budget will be delivered on May 14.

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