In 2024, India saw a record 1.3 million students pursuing education overseas, making it the second-largest source of international students globally, according to the Ministry of External Affairs data.
However, in the education financing scene, foreign currency (USD) loans are still rare in India. Avanse (via its arm Avanse Global Finance) is trying to fill that gap: letting Indian students borrow in USD for their U.S. or abroad studies and repay in USD, removing currency conversion risk.
This guide explains how Avanse Dollar Loans for studying abroad work, identifies the uncertainties, and provides guidance on how to evaluate them wisely.
What Is The "Avanse Dollar Loan"?
The Avanse Dollar Loan is a non-collateral, unsecured loan that provides financial support to students planning to study abroad, with a primary focus on programs in the USA.
Put simply:
1. A foreign currency education loan (in U.S. dollars) by Avanse's overseas financing arm (Avanse Global Finance) is intended for students going abroad (mainly to the U.S.).
2. Borrowers can take a loan in USD and repay in USD. That means you (the student) don't bear the foreign exchange conversion risk in your repayment.
3. It aims to offer "100% financing” (tuition, living expenses, and other study-abroad costs) and longer tenures (up to 15 years) in many cases.
Students applying for STEM and MBA courses in the US from a list of approved universities can avail themselves of this scheme.
Avanse Foreign Currency Loan Features
The Avanse Dollar Loan is customised to support students in two major streams: STEM and MBA. The loan amount and terms vary by course, but the general benefits remain consistent across both categories.
Here's a breakdown:
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Avanse Dollar Loan Eligibility Criteria
It's vital to understand precisely what you need to be eligible for this loan.
1. The applicant must be an Indian citizen.
2. Applicants should generally be under 30 years of age, with an extended limit of 35 years for specific cases. However, if the applicant is over 30, the credit insurance component may increase.
3. Students must have secured a confirmed admission to a STEM or MBA program at one of the pre-approved universities by Avanse.
4. Unlike traditional loans, Avanse does not require a co-applicant to secure the loan. However, a co-borrower (typically a parent or sibling) is required.
The co-borrower's credit profile is assessed, but they are not financially liable for the loan repayment.
How to Apply for Avanse Dollar Loans?
The application process for an Avanse Dollar Loan is straightforward to follow. Here's a step-by-step guide to help you get started:
1. Verify whether your course, university, and profile are likely to qualify for the USD loan scheme.
2. Complete online application via Avanse Global Finance platform or via partner organisations.
3. Avanse will review your admission letter, cost estimates, your profile, the co-borrower's profile, and financial information.
4. Once conditions are satisfied, you submit the necessary documents.
5. If approved, Avanse issues a sanction letter outlining the terms (interest rate, tenure, moratorium, and disbursement schedule).
6. Funds are disbursed (often directly to the university or the relevant vendor) in U.S. dollars.
Document Checklist for Loan Application
To apply for an Avanse Dollar Loan, you need to submit a few essential documents. Here's a checklist for both the applicant and the non-financial co-applicant:
For the Applicant (Student):
1. Valid passport
2. Proof of identity (Aadhaar, PAN, etc.)
3. Proof of address
4. Academic transcripts (10th, 12th, undergraduate, etc.)
5. Standardised test scores (GRE, TOEFL, GMAT), if required by the university
6. Admission/offer letter from the foreign university
7. Cost breakup from the university (tuition + living + miscellaneous)
8. Bank statements (last 6–12 months)
9. Any proof of other funds/scholarships (if applicable)
For the Co-borrower / Co-applicant (if required):
1. Identity & address proofs
2. Income proofs (salary slips, Form 16, ITRs)
3. Bank statements
4. Credit history/credit score
5. Relationship proof to the student
Also, expect legal documentation, such as guarantees or indemnities, loan agreements, and assignments of documents, among others.
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Avanse Dollar Loan Interest Rates
Since this is a USD-based loan, the interest behaviour differs from that of local INR student loans. Avanse's USD loan marketing pushes a 10.5% (starting) interest rate. However, applicants may be quoted higher rates, depending on factors such as their credit history, co-borrower status, and the university's reputation.
In contrast, their domestic (INR) student loan business uses a floating rate model:
"Interest Rate = Avanse Base Rate + Spread."
Additionally, for domestic unsecured education loans, rates range from ~10.75% to ~11.75%.
Considering Refinancing Your Avanse Education Loan? Here's How!
If you're living in the U.S. and have an education loan from Avanse (India), refinancing may be an option to reduce your interest burden. However, it's essential to understand the challenges, especially with high interest rates and repayment terms.
A Reddit user, r/StudentLoans, shares:
"I have a 13.4% interest rate on my Avanse loan with ₹1L/month EMIs. I'm looking to refinance either through Indian banks or U.S. lenders. Has anyone here successfully refinanced their Avanse loan while in the U.S.?"
Insight: Refinancing international education loans can be tricky, but it's possible with U.S. banks or NBFCs. However, not all lenders offer refinancing for foreign loans, and U.S. lenders may have stricter eligibility requirements or higher rates for foreign loans.
What do we infer from this case?
1. Refinancing an Avanse loan while in the U.S. is feasible, but not all U.S. banks or NBFCs support it.
2. Indian banks may offer refinancing, but you'll need to check for eligibility and associated costs.
3. Platforms like WeMakeScholars can assist with balance transfers, but be sure to check for any hidden fees or potential complications.
4. The interest rate (13.4%) is relatively high, so refinancing could help lower it. Compare multiple options carefully.
Tip: Before refinancing, ensure you understand the refinancing process, associated fees, and whether it will lead to a lower overall loan cost in the long term. Always compare options with both Indian and U.S. lenders to get the best rate.
Avanse Loan Repayment in USD
Since you borrow in USD and repay in USD, you sidestep currency fluctuation risk (i.e., you're not converting INR to USD on a monthly basis). However, your earnings (initial job) will likely be in INR unless you work abroad. So you must manage currency conversion for your USD repayment, which introduces exchange risk on your end.
The Avanse Dollar Loan offers several flexible repayment options, allowing students to manage their finances effectively throughout their studies. Some key features include:
1. Repayment Period:
The loan can be repaid over a period of up to 15 years.
2. Moratorium Period:
The loan has a moratorium period of the course duration plus six months, allowing students to complete their studies and find employment before starting repayments.
3. Partial Interest Payments:
During the course, students can pay a minimal partial interest of $65 per month.
Learn how to master the education loan sanction process by exploring formats and requirements for a smooth approval.
Risks, Tradeoffs & "What to Ask Avanse Before You Commit"
Before opting for an Avanse Dollar loan, it is essential to be aware of what to watch out for. Here are some quick pointers you should consider:
1. Interest Rate Adjustments:
Even if you lock a rate, specific components may be adjusted upon review. Ask: "Is my interest locked for the entire tenure or floating after X years?"
2. Prepayment / Foreclosure Policies:
Can you prepay the loan early? Any penalty?
3. Change in Forex/Policy Risk:
Although Avanse states “no forex conversion cost," terms can change over a 10 - 15 year loan.
4. University/Course Approval Constraints:
If your university or course later changes (e.g., relocates to a new campus, updates its curriculum), will the loan remain valid?
5. Disbursement Limits per Tranche:
Some loans disburse only to certain heads (e.g., tuition, not living expenses).
6. Hidden Insurance/Risk Premiums:
Some overseas education loans include insurance or risk premiums as part of the loan package.
7. Your Currency Mismatch:
If your job is in India and your salary is in INR, repaying USD always depends on favourable exchange rates. If the rupee weakens further, the cost increases.
8. Customer Experience, Support & Defaults:
A Reddit user with the username r/IntltoUSA claimed they received a loan offer from Avanse Global with a 10.1% interest rate, a 1.5% processing fee, and a 1% insurance premium. However, they reported issues such as an exponential increase in ROI after a year, poor customer support, and complications with loan foreclosure.
That's anecdotal, but do your due diligence before endorsing any service.
The Avanse Dollar Loans for studying abroad is one of the few products in India that lets students borrow and repay in USD, promising to sidestep currency conversion risk. Whether you're eyeing a prestigious university or a specialised program, Avanse provides the support you need to make your global education dream a reality.
Turn your dream of studying abroad into reality with Propelld Get quick, collateral-free education loans with flexible repayment options tailored to your needs. From tuition to living expenses, Propelld supports students across thousands of colleges with a 100% digital approval process.
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