How To Refinance Your Indian Student Loan in the U.S.

Posted by in Loans | Updated on November 15, 2022
At a Glance: Indian citizens in the US may refinance their student loans while in America. Refinancing Indian student loans in the US has a number of benefits, including lower interest rates and shorter repayment terms.

Higher education in the U.S. can be very expensive for Indian students, due to limited financial aid and the ever-increasing cost of education. With as many as 1.86 lakh Indian students, most Indian students rely on student loans from their home country to meet educational expenses in the US.

But most Indian student loans are expensive–at a very high rate of interest, as even though you have high potential, you are considered high risk due to the uncertainty of finding a stable job after you finish your studies abroad. Also, most Indian banks may require a collateral in such a case.

Therefore, it makes sense for you to refinance your Indian Student Loan in the US, once you graduate and start working full time. As, now that you have a stable income every month you are at a much lower risk of default, which is why you are eligible for better terms at a lower interest rate.

What is Student Loan Refinancing?

Student Loan Refinancing means paying off your existing Indian student loan with a new loan from another lender in the US, at new terms- usually at a lower interest rate or shorter term, considering your income and credit score.

There are many benefits to refinancing your student loans. Read on to learn about some of the best.

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Top 5 Benefits of Student Loan Refinancing

There are many benefits to refinancing student loans. Below we discuss the Top 5 benefits.

Lower Monthly Payments

Refinancing your student loan lowers your monthly loan repayment installment, by letting you extend your repayment period or by lowering your interest rate. Most refinancing loans give you the option of a flexible term at affordable interest rates.

Lower Interest Rates

By refinancing your student loans you can negotiate a lower rate of interest on your loan, depending on your financial situation and your credit standing. In some cases, adding a co-signer may allow you to lower your interest rate. This reduces the amount of your monthly payments and saves you money over the long term.

Shorter Loan Term

Now that you have a steady job, you may be comfortable paying a little extra towards the repayment of your loan, allowing you to shorten the term of your loan. It can save you a considerable amount of money in interest payments. Most student loan refinance programs levy zero prepayment penalty, making it an attractive choice for those who can afford early repayment.

Personalized Service

Having to pay your Indian student loan from the US can be challenging, due to lack of communication, which can often lead to misunderstandings. Most lending companies in the US have education loan officers specializing in their domain of service, they can guide you to negotiate better terms and conditions for your refinancing student loan.

Release your existing cosigner

Refinancing your student loan may allow you to release your cosigner from existing student loan in India. Your co-signer will be relieved as he can improve his credit score and gain access to new lines of credit now.

If you think student loan refinancing is the option for you, read below to learn about the important considerations to keep in mind when choosing a lender.

6 Important Considerations When Choosing a Lender

Some of the major considerations involved in choosing an Indian Bank for refinancing student loan in the U.S. are:

Savings in Interest

Choose a bank that offers competitive benefits in terms of savings in interest with the new loan. The whole purpose of refinancing is to ease your financial burden by opting for a new loan at better terms, so it’s of prime importance to quantify and compare your financial benefits.

Repayment Assistance Plans

Choose a lender that helps you manage your money through a variety of options, including multiple repayment options like graduated repayment, deferred repayment, consolidated repayment plans. Such flexibility can make your life easy and convenient.

Forbearance (Hardship) Policy

Some banks will be willing to lower or defer your loan payments for a time if you run into trouble repaying your loan. Choose a lender with a flexible forbearance policy, as having such a policy can really prove helpful when the going gets tough. A saving grace for the mayday.

Hidden Charges

Many lenders, including Indian Banks, levy unnecessary charges on a loan, such as an origination fee, prepayment penalty, etc. Find out in advance about these hidden charges. The objective is to save as much money as possible by minimizing the cost of the loan.

The number of branches in the U.S.

Now, it is really important for the Indian Bank you are considering to have a presence in the United States of America. For any future contingency, it is important to be able to discuss and negotiate the terms and conditions of your new refinancing loan.

Customer Service

The last thing you need is a bank who puts you on hold when you call. Choose a bank with student-friendly services like toll-free telephone numbers and a helpful staff that answers your questions and provides guidance when you call. Look for banks that offer 24/7 service through the Internet.

With these considerations in mind, you’ll be ready to choose a the right lender to help your refinance your Indian student loans in the U.S. Below, discuss how that process works.

4 Easy Steps to Refinance Your Indian Student Loan in the US

Refinancing your Indian Student loan in the US can be difficult, as currently you are in the US on a temporary visa such as F-1/OPT/H-1B, which may be of short duration, whereas student loans are long term. Hence, it doesn’t fit well for most lending companies in the US.

The US Government doesn’t have any programs to help students with international loans, therefore your only option is to rely on willing private lenders. Here is a step by step guide to refinancing Indian Student Loan in the US:

1. Find Suitable Options

As discussed above, there are limited options available for international students when it comes to student loan refinancing. Therefore, first and foremost you need to find lenders willing to refinance your Indian Student Loan.

2. Examine Eligibility Criteria

The next step is to determine your eligibility for student loan refinancing at these funding institutions. As it mostly depends on your credit score (if you have any in the US), college or school you studied at, whether you have a cosigner or not, your current income, and nature of your visa.

3. Analyse All Options

While comparing various refinancing options it’s important to consider any fees, rates, and repayment options to ensure that you are choosing the loan that works best for your needs. You should evaluate and consider the following: Monthly payments, Total cost of the loan, Annual percentage rate, Repayment period and Deferment option.

4. Submit Application and Get Approval

Complete and submit the loan application with necessary details about yourself and your existing loan.

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Refinancing your Indian student loan in the US can be a tough call due to lack of government support and limited borrowing options, but it is most certainly worth the effort as it can save you a substantial amount of money in the long term. Not to mention the inconvenience of having to send money across seven continents for a long time.

Need a Loan? Get One in 3 Simple Steps

If you are considering applying for a personal loan, just follow these 3 simple steps.


Apply online for the loan amount you need. Submit the required documentation and provide your best possible application. Stronger applications get better loan offers.


If your application meets the eligibility criteria, the lender will contact you with regard to your application. Provide any additional information if required. Soon you’ll have your loan offer. Some lenders send a promissory note with your loan offer. Sign and return that note if you wish to accept the loan offer.


The loan then gets disbursed into your U.S. bank account within a reasonable number of days (some lenders will be as quick as 2-3 business days). Now you need to set up your repayment method. You can choose an autopay method online to help you pay on time every month.


About Stilt

Stilt provides loans to international students and working professionals in the U.S. (F-1, OPT, H-1B, O-1, L-1, TN visa holders) at rates lower than any other lender. Stilt is committed to helping immigrants build a better financial future.

We take a holistic underwriting approach to determine your interest rates and make sure you get the lowest rate possible. 

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