Education loan for MS/MBA Abroad: 2 Common Misunderstandings

    Updated on: 04 Sep 2023 2 min read


    Challenges for MS and MBA aspirants aiming for top universities abroad are boundless. Often education loans add to your list of worries, particularly with several misconceptions going around. Here, we debunk a couple of such myths:

    1. Sanctioned Amount vs Disbursed Amount

    Educational loans are different from other loans in that the interest need not be paid on the entire loan amount sanctioned, but only on the amount that you actually utilize. The sanctioned amount is the amount that is allocated by the bank at the beginning of your venture. However, the interest is required to be paid on only the money that you actually utilize, and only for the period that you borrow the money for.

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    2. Margin Money

    Usually, banks expect the borrowers to pull in a little bit of risk for themselves. They require that up to 15% of the expenses be taken care of by the student’s own sources viz.  personal funds or scholarships. Such an amount is termed as marginal money. For instance, if the fee for the first semester is 7 lakhs and the margin is 20%, the bank would pay 80% of it and the remaining 20% is to be borne by you.

    Part of our mission at GyanDhan is to ensure complete transparency in education loan terms. Should you have any other questions about education loans, feel free to write to us or leave a comment below! Also, if you are planning to take an education loan via SBI then we have launched a new service of door pickup of documents (at zero cost) which will reduce your time and effort substantially. 

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Written by Ankit Mehra

Ankit is the co-founder and CEO of GyanDhan. An IITK / IESE alum who previously worked at Capital One / Credit Suisse, his aim is to equalize and expand access to higher education. His interests include playing football (soccer), and basketball, trading/investing the limited money that he still has, and discussions on economics / politics.


Photo aman jain
Reviewed by Aman Jain

Aman Jain graduated from IIT Kanpur, and currently functions as the CMO at GyanDhan. He is deeply passionate about creating equality in higher education and has directly interacted with 2 Lakh students in his 8-year-long journey.


Specializes in:
Education loan , Study Abroad Admissions


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GyanDhan is India's first education financing marketplace.



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