How to perform an education loan comparison for Indian students

Indian students studying in the U.S. or Canada must often rely on private education loans to help cover the cost of their degrees. Since federal financial aid isn’t available to Indian students, private education loans are often the best option. However, there are many lenders providing a wide range of loan offers, so it’s important to carefully compare each product to be sure you get the best loan for you. This guide offers an overview of the types of loans available to Indian students, tips on how to compare them, and how to choose a lender.

1. Total number of Indian students in the U.S. (2023-2024):Indian students now form the largest international student group in the U.S., with a record-breaking 331,602 students in 2023-2024. This surge reflects a growing trend of Indian students seeking world-class education and better career opportunities in the U.S.Source: IIE Open Doors 2024 Report
2. Year-over-year growth – Indian students in the U.S. (2022-2023 to 2023-2024):The number of Indian students in the U.S. increased by 23% in just one year, highlighting the strong demand for American education. This is the highest annual growth rate in over a decade, showing a clear shift in global mobility trends.Source: IIE Open Doors 2024 Report
3. The proportion of Indian students among all international students:Indian students now make up 29.4% of the total 1.1 million international students in the U.S. This means that nearly one in three international students in the U.S. is from India, further cementing their dominance in global student mobility.Source: IIE Open Doors 2024 Report

To effectively perform an education loan comparison, you’ll want to understand the different kinds of private loans that may be offered to you.

• Institution-sponsored loans: Some universities offer their own loan programmes especially designed for international students, including those from India. However, these loans are often not available to every student, and they may not cover the full cost of education.
• Loans from India: You may find options for overseas education loans from lenders in India. These may be a good option if the interest rates are lower than loans in the U.S. or Canada. However, changes in financial markets and currency exchange rates can make it difficult to know exactly what your payments will be once you’ve graduated. In addition, you need to allocate more money for foreign exchange fees which can add up over time. Many Indian banks offer education loans but typically require property or fixed deposits as collateral.
• Private loans: Banks or financial institutions provide private loans rather than a government or university. Most Indian students fund their education in part with private loans.

Generally, there are two types of private loans to factor into your education loan comparison.

• Private loans with a cosigner: Because Indian students usually don’t have a credit history in the country where they’re studying, private lenders often require students to have collateral or a cosigner. Collateral is property or financial assets the lender could take if you can’t pay your loan. A cosigner is a U.S. or Canadian citizen or permanent resident who agrees to take responsibility for the loan if you can’t make payments. However many Indian students don’t have the financial resources to offer collateral, and they may not have friends or family in North America they can ask to be a cosigner, making it difficult to get a private loan.
• Private loans without a cosigner: Some lenders are willing to offer loans to Indian students without requiring a cosigner or collateral. Rather than making their decisions based on your current finances, these lenders focus on your previous academic achievements and your future earning potential. They may look at factors like your course of study, your university’s reputation, and your projected income after graduation. For many Indian students, an international education loan without collateral or cosigner is the best way to overcome the challenges of paying for study abroad in the U.S. or Canada.

Here are the most important things to remember when performing an education loan comparison as an Indian student.

• Eligibility: The first thing to consider is whether you’re eligible for a loan, since requirements for loans vary widely between lenders. Some lend only to international students in certain fields or to students with a certain academic standing. Others may require a cosigner or collateral. Check if the lender has specific requirements for Indian students.
• Student loan interest rates: The interest rate on a loan is one of the biggest factors in determining how much your payments will be and how long you’ll have to pay. Interest rates may be fixed, meaning the rate will never change, or they may be variable, meaning the amount of interest you pay may rise or fall from year to year along with changes in economic markets. Compare these rates with those offered by Indian banks to find the most cost-effective option.
• Repayment options: Some lenders will allow you to defer payments until you’ve graduated, or to make interest-only payments while you’re in school. Other education loan providers may allow you to make smaller payments immediately after you graduate and larger payments as your income grows. One thing to remember is that the longer you defer, the more interest you will have to pay. That’s why making payments while you’re in school can help to reduce the overall cost of the loan.
• Additional fees: Many lenders include fees like application fees, origination fees, processing fees, or penalties for early prepayment. Look at and compare the annual percentage rates (APR) as part of your education loan comparison. The APR encompasses the interest plus any fees for the loan each year. The APR allows you to make an apples-to-apples comparison of different loan products by annualizing the full cost of the loan based on the interest and fees charged. For Indian students, it’s also important to consider currency conversion fees that may apply when making payments from India.
• Loan amount: Each student loan provider will have a minimum and maximum amount they’re willing to lend to you. Be sure these amounts make it possible for you to cover the full cost of your education. Remember that living expenses in the U.S. and Canada can be significantly higher than in India, so factor this into your calculations.

In addition to financial considerations like private education loan rates, fees and repayment options, your education loan comparison should also take into account the quality and reputation of the lender. Not all lenders are equal – certain lenders have a stronger reputation than others, and some are better at serving the needs of Indian students.

Lender reputation

Be sure to review the business reputation of any lender during your education loan comparison. Read online reviews from companies like TrustPilot for each lender’s customers to make sure the company is one you want to work with. Avoid any lender that receives a lot of complaints about lack of communication or flexibility. Try to seek out reviews from other Indian students who have used the lender’s services.

Additional benefits

Some lenders offer additional benefits that can be especially helpful for Indian students. These may include:

• Informational resources. Applying to schools in the U.S. and Canada can be overwhelming for many Indian students. Some lenders offer helpful online resources that can help to demystify processes and provide helpful guidance as you navigate the application and immigration process.
• International scholarships. Certain lenders go one step beyond loans and offer access to scholarships for certain kinds of students, including those from India.
• Visa support. This may include resources to better understand the information process and tools to prepare for your visa application. This is particularly valuable for Indian students who need to navigate the complex visa application process.
• Career services. Because they’re invested in your success after graduation, some lenders offer career services to help you find jobs and internships. These may include tools for searching jobs, building a resume and preparing for interviews. Some even offer networking opportunities with other Indian professionals in the U.S. and Canada.

As a leading international student loan company, MPOWER Financing offers no-cosigner student loans that give Indian students the opportunity to fund their education without the traditional obstacles associated with private student loans. Instead of asking for a cosigner or collateral, MPOWER takes a different approach, evaluating students based on their future earning potential rather than their past financial circumstances.

With MPOWER, you’ll find:

• Tailored loan options: MPOWER offers student loans ranging from US$2,001 (INR 1,66,700) to US$100,000 (INR 83,33,000), which can help to pay for tuition, housing, health insurance, and other education-related expenses in the U.S. For loans in Canada, funds can typically only be used toward tuition and university-invoiced expenses. MPOWER loans come with competitive fixed interest rates, no prepayment penalty, and a 0.25% interest rate discount for students who enrol in automatic payments.
• Quick and easy application process: Applying for an MPOWER loan is straightforward, thanks to a fully digital application system. You can check your eligibility in under a minute and receive a conditional offer quickly. MPOWER works directly with schools to disburse funds, ensuring you receive the financial support you need without unnecessary delays.
• Benefits: MPOWER understands that financial aid alone isn’t enough to ensure student success. That’s why they offer career support, visa assistance and financial services through our Path2Success program.