Education Loan

Expenses Covered Under Education Loan for Abroad Studies

Expenses Covered Under Education Loan for Abroad Studies

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Know all the expenses covered under an education loan to study abroad. Get information on living expenses, tuition fees & other expenses that can be included in your study abroad loan.

GyanDhan
Ananya Ghai
Updated on:  30 Oct 2023  | Reviewed By: 
Aman 
| 14K | 6  min read

Studying abroad offers incredible opportunities for personal growth and knowledge expansion, but the associated expenses can be daunting. Education loans come to the rescue by covering a wide range of costs, including tuition fees, living expenses, travel expenses, and even insurance premiums. Understanding what expenses are covered under an education loan is crucial, especially as the cost of education abroad continues to rise. It's essential to consider inflation, currency fluctuations, and tax implications when making financial decisions. Taking an education loan not only safeguards against rising expenses but also offers tax benefits, ensuring long-term cost savings. Explore our comprehensive blog to learn more about the expenses covered under an education loan for studying abroad.

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Expenses covered under abroad education loans

An abroad education loan is designed to provide financial assistance and alleviate the burden of studying abroad. From tuition fees and living expenses to study materials, travel costs, insurance coverage, and other miscellaneous expenses, education loans cater to a wide range of financial needs. Here are some expenses that lenders usually cover in their education loans (expenses may differ from one lender to another):

1. Tuition fees

One of the primary expenses covered by an education loan is the tuition fees. Whether you are pursuing an undergraduate, postgraduate, or doctoral degree, the loan amount can be used to pay for your course fees at the institution of your choice. The loan covers tuition fees for the entire duration of the program, ensuring that you can focus on your studies without worrying about financial constraints. So, it is covered by all the lenders irrespective of the fact that they are public sector banks, private banks, NBFCs, or international lenders. 

2. Living expenses

Living expenses, including accommodation, meals, transportation, and other day-to-day costs, are also covered under an education loan. This provision ensures that you have sufficient funds to support yourself during your stay abroad. 

The loan amount considers factors such as the location, duration of the course, and the standard cost of living in the country of study. Living expenses can be a very broad category including expenses related to food, rent, daily expenses, etc. There is no uniformity in the way expenses are covered in the loans. 

3. Study-related expenses

Since studying abroad is not restricted to mere college education, the cost of study shouldn’t be conflated with the tuition fee. Study expenses involve additional expenses as well - such as undergoing projects, research, field visits, internships, etc. Education loans often cover the cost of study materials, including textbooks, reference books, stationery, and other educational supplies required for your academic pursuits. 

 

 

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4. Travel-related expenses

Travel cost is usually in Lakhs, so many banks provide the option of including travel-related costs in the overall loan amount. However, it should be noted that banks do not usually provide the cost of travel as a default part of the loan. It can be included at the request of the borrower. For those who may not be able to afford the travel cost, it is advised to incorporate the travel cost into the loan.

5. Travel and health insurance

An abroad education loan often includes provisions for comprehensive health and travel insurance coverage. This helps safeguard your well-being and provides financial support in case of medical emergencies or unforeseen circumstances while you are studying overseas. 

6. Miscellaneous expenses

There may be additional miscellaneous expenses that can be covered under an education loan. These may include visa fees, resident permit charges, student union fees, library fees, laboratory fees, and other necessary expenses directly related to your education.

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Read More About: Educational Loan on Agriculture Land: Is it Possible?

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Expenses not included in an abroad education loan

An education abroad loan does not include pre-admission expenses. Some of the expenses that are not included in an education loan are as follows:

  1. Study visa: An education loan does not include expenses included in the study visa process. 
  2. Entrance exams cost: Education abroad loans do not cover examination fees of entrance exams such as IELTS, GRE, and TOEFL to name a few.
  3. College admission application fees: Education loans do not cover the application fees of colleges and universities at the admission stage.

 

It is advisable to prepare a list of expenses throughout your education journey to avoid any future hassle.

Know fee-related expenses of study abroad exams:

  • list items IELTS fees
  • list items TOEFL fees
  • list items GRE fees
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    Factors to consider for calculating study abroad expenses

    1. The cost of accommodation in a particular country and if it will be possible to live in shared accommodation for reduced cost of living. 
    2. Keep in mind the inflation over your course period. Therefore, it is advisable to sanction a greater amount in case the cost of living increases during the course.
    3. The cost of transportation. Many places have affordable fuel prices and low-cost used car markets like the US and Australia. While in places like Ireland, students get discounts on public transport. You must research all this beforehand. 
    4. You should check the part-time job opportunities available in the city where the university is located. Many countries have attractive part-time job options with fixed minimum wages. This will help you in covering a considerable amount of your expenses. 

    All the factors mentioned above will help you in assessing the loan amount required to finance your education abroad. So, it’s in your best interest to take help from experts working in this space so that you can be assured that your loan will cover the maximum of the expenses. We at GyanDhan understand that the whole abroad education loan process can be overwhelming at times. Therefore, we are here to help you. All you need to do is check your education loan eligibility at GyanDhan and leave the rest to us. Our education loan experts will guide you at each and every step of your education loan journey. 

    Read more about:

  • list items Documents required for abroad education loan
  • list items Study Abroad Scholarships for Indian Students
  • list items Abroad education loan with collateral
  • list items Abroad education loan without collateral
  • list items Education loan for NRI applicants 
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    Frequently Asked Question

    Does education loan cover living expenses abroad?

    Yes, abroad education loan cover living expenses, the living expenses are usually not sent to universities. On the contrary, it is deposited into an FTC or a foreign travel card.

    What expenses are not covered under an education loan?

    An education loan typically does not cover expenses that are unrelated to education. This includes personal or discretionary expenses, travel for non-academic purposes, luxury items, and non-educational activities. Hobbies, entertainment, and leisure activities are generally not included. It's important to carefully review the loan agreement and consult with the lender to understand the specific exclusions. 

    Does an education loan include personal expenses?

    Education loan typically does not cover personal expenses. The primary purpose of an education loan is to fund tuition fees, study materials, and other educational-related expenses. Personal expenses such as trips, leisure activities, and personal purchases are not usually included in the loan coverage.

    What expenses are covered in the SBI education loan?

    An SBI education loan covers all the expenses related to education. The SBI loan includes tuition fees, living expenses, travel expenses, health insurance, and study-related expenses. However, you will have to show proof of all the expenses.

    Can I use my student loan to buy a laptop?

    Yes, you can use your student loan to purchase a laptop. Many lenders consider laptops as essential educational tools for students and allow funds from the education loan to be used for this purpose. Keep in mind that the loan amount allocated for such expenses may have a limit, so it's advisable to choose a laptop that meets your requirements without exceeding the approved loan amount.

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