For most Indian students, the dream of studying abroad often comes at a staggering cost. To meet the cost, many rely on education loans from Indian banks or NBFCs. Since India is a developing nation, loans from financial institutions carry high-interest rates. However, once you land a job in the US, student loan refinance is the logical next step.
The prevailing interest rate abroad is far lower than in India. What’s more, it is set to drop even further by the end of this year. This smart financial move can save you lakhs of rupees over the next few years.
The question we get most often is: how long does this process actually take? Here is the answer: refinancing an education loan can happen in as little as 4 weeks and as long as 2 months. We look at what factors affect the student loan refinance timeline and explore how you can speed it up.
Why the student loan refinance timeline matters
For middle-class Indian students, timing is critical when it comes to refinancing an education loan. At the beginning of the tenure, the interest component is highest, and each week matters.
For example, on an education loan of INR 50 lakhs at 12.5% for 10 years, the monthly EMI is INR 73,160.
Of this, as much as INR 52,100 is the interest component. A delay of 4 months adds up to over INR 2 lakhs of interest.
Delays also prolong the pressure on parents or guardians who act as co-signers. Until refinancing is completed, collateral remains tied up and their CIBIL score stays under scrutiny. The faster the refinance goes through, the sooner families can reduce this burden.
Thus, the sooner one can move through the student loan refinance process, the greater the savings.
There is also another reason. Student loan refinance releases the co-signer from their burden. It also releases the collateral and frees up the scrutiny on the CIBIL score. Parents and guardians who have signed the loan application can heave a sigh of relief after refinancing the education loan.
Thus, the sooner one can move through the student loan refinance process, the greater the savings.
Stage-by-stage student loan refinance timeline
The student loan refinance has several stages, and each adds time to the overall process. Let’s dissect the journey step-by-step.
Stage 0 – Preparation and Research
1 – 14 days
Well begun is half done. This initial phase is entirely in your control and is important to setting yourself up for success. You will spend this period doing research.
Compare offers from lenders such as SoFi and Mpower. Find out their requirements. Some refinance lenders require a U.S.-based co-signer, and a few lenders don’t. Online marketplaces such as Credible and comparison articles in CNBC and US News are ideal to start your journey.
You also have to gather the required documents. Here is a table of what you must present:
| Category | Documents Required |
| Identification | • Passport
• US Driver’s License or State ID • Visa (F-1, H-1B) • Social Security Number (SSN) or ITIN |
| Immigration Status | • I-20 Form (for F-1 visa holders)
• I-94 Admission Record • EAD Card (Employment Authorization Document for OPT) |
| Financial & Employment | • Recent Pay Stubs
• Official Employment Offer Letter • 6 Months of US Bank Statements |
| Academic | • Official University Transcripts
• Degree Certificate |
| Existing Loans | • Most recent statements for the loan to be refinanced.
(Must show lender name, account number, outstanding balance, and interest rate) |
| Credit Score (Indian) | • CIBIL Report (notarized) |
| Co-Signer Docs (if applicable) | • Identification, financial, and credit score documents for your US co-signer. |
Note that CIBIL has low weightage abroad, but it demonstrates financial responsibility.
Besides, you will also need a letter from the Indian bank from which you have obtained your education loan. They must be prepared to accept loan closure without repayment.
Stage 1 – Pre-Qualification or Rate Check
1 – 2 days
If you have a credit history in the USA, you are eligible for student loan refinance pre-approval. Pre-approval allows you to see potential interest rates and terms from a lender abroad. It won’t impact your credit score and is easily done via the internet.
To get student loan refinance pre-approval, you have to provide:
- Personal information
- Employment details
- Income details
- Education details
- Current loan amounts
Within a day, you will receive preliminary rate offers based on your information and soft credit pull. If you pre-qualify with multiple lenders, identify the best student loan refinance rates and tenure.
Stage 2 – Formal Application and Document Upload
1 – 7 days
Once you select a lender, complete the full application. You can apply directly on the lender’s website or through a loan marketplace. With the application, you must provide your personal, financial, and educational information. We have already outlined the documents in the table above.
Stage 3 – Scrutiny and Verification
5 – 14 business days
This is the most important part of the process and includes what is known as underwriting. At this stage, the lender determines your creditworthiness and ability to repay the loan. This includes verification of your employment, your status (intern, probationer, full-time employee, etc), salary received, visa status, educational qualifications, US credit score, and other details.
In this case, refinancing an education loan of an Indian student, the lender also has to factor in various non-financial risks. Such as they have to consider whether you are likely to remain in the USA for the remainder of the tenure or if your work visa might be halted at some stage.
A strong profile with all documents will need no more than 5 business days to scrutinize. For profiles that are not optimal, the lender might consider making a counteroffer, adjusting the tenure, and with a slightly higher student loan refinance rate.
Stage 4 – Final Approval and Loan Offer
1 – 3 business days
Once underwriting is complete, the lender issues a final offer mail. It will have details regarding:
- Loan amount and tenure
- Student loan refinance rate
- Any fees or special conditions
Of course, you don’t sign it immediately. Send back an email stating that you will review the terms and conditions for a week.
You have to carefully review the fine print and read through all the terms and conditions. Here is what you must look for:
| Section | What to Check |
| Borrower & Lender Information | Confirm names and addresses of all parties |
| Loan Amount | Check that the principal matches your discussions |
| Interest Rate | Confirm the APR (including all fees) and whether the rate is fixed or variable |
| Loan Term | Review the duration and full repayment date |
| Repayment Schedule | Ensure the monthly EMI amount, due dates, and number of payments are clearly stated |
| Prepayment Clause | Look for any penalties for early repayment |
| Processing Fees | Identify all application-related charges |
| Late Payment Penalties | Locate the fees for missed or late payments |
| Other Charges | Ask about costs or extras not already listed |
If you are confused by the contract, do not hesitate to consult a lawyer or a CPA (same as CA in India).
You should also check for:
- Obtain a schedule showing principal and interest breakdown for each payment.
- Look for clauses allowing lenders to change terms without your consent.
Should you want clarification, do not hesitate to approach the lender.
Stage 5 – Signing and Cooling-Off Period
3 – 7 business days
After you sign the agreement, many lenders have a short cooling-off period. This allows you time to cancel the contract if needed.
During this time, ensure that your original lender in India knows that the student loan refinance process is complete. Also, pause any auto debit of repayment in India.
Stage 6 – Payment of Existing Loan
5 – 15 business days
The new lender will now pay off your rupee education loan. This often involves a SWIFT transfer to your Indian lender. SWIFT is an international bank transfer messaging service.
Stage 7 – Post-Payoff Confirmation and First Bill
7 – 30 days
The new lender will send you confirmation that they have repaid the original education loan. You will also receive instructions for auto debit setup. Expect the first EMI request a month from this point.
Student Loan Refinance Timeline at a Glance
| Stage | What Happens | Typical Duration |
| 0. Preparation | Gather all necessary documents (ID, visa, income, and loan statements). Crucially, request a Refinance Permission Letter or NOC from your Indian lender. | 1 – 14 days |
| 1. Pre-Qualification | Use online tools to get estimated rates from multiple lenders. This involves a soft credit check. | 1 – 7 days |
| 2. Formal Application | Choose a lender and submit the formal application. Upload all gathered documents. | 1 – 3 days |
| 3. Underwriting & Verification | The lender’s team verifies all information: US credit score (yours/co-signer’s), employment, income, visa status, and existing debt. | 5 – 14 business days |
| 4. Final Approval | Receive the final loan agreement with the confirmed interest rate and all terms. | 1 – 3 business days |
| 5. Signing & Cooling-Off | E-sign the loan agreement. A mandatory “right of rescission” or cooling-off period begins. | 3 – 7 business days |
| 6. Payment to Old Lender | The new lender sends the payoff amount via wire transfer to your previous loan servicer. | 5 – 15 business days |
| 7. Post-Payoff & First Bill | Confirmation of old loan closure. Your new loan account is activated, and your first EMI date is set. | 7 – 30 days after payoff |
Student loan refinance process: Common delays and how to avoid them
Refinancing an education loan is a straightforward process. An international lender pays off the original loan and issues a new loan. However, there are delays that can cause the student loan refinance timeline to drag on for months.
Clearance Delays
Indian banks may take several weeks to issue the necessary clearance, documents, and permission for the student loan refinance process to commence.
Incomplete Documents
You must have everything in place before looking for student loan refinance pre-approval. A missing pay stub or a misplaced EMI receipt from your rupee loan might jeopardize the student loan refinance process.
Co-Signer Issues
Many lenders abroad prefer that you have a U.S.-based co-signer. They prefer a strong co-signer with a credit score above 750 and a low DTI. Finding such a person might take time.
Wire Transfers Delay
Ensure that the loan repayment is sent using the correct SWIFT codes. All bank branches in India do not have a separate SWIFT code. The loan amount will be sent to the local head office, and the branch has to settle your account based on it.
Employment Uncertainty
Student loan refinance timeline delays happen if your visa or job is temporary. Ideally, you should apply towards the end of your moratorium period when you have secured a job.
To avoid any delay and for a predictable student loan refinance timeline, you can use a platform such as Gradright. Instead of looking for student loan refinance pre-approval from multiple lenders, simply upload all your details to Gradright and have the lenders take a look at your financial and career profile. Thereafter, they revert with an offer in a few short days. It makes the whole process easy and achievable within a month.
To know more, write to grad@gradright.com or call 09240209000 and get in touch with our experts who will guide you.
