Expenses Covered Under Education Loan for Abroad Studies

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. 

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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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:

• IELTS fees
• TOEFL fees
• GRE fees

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:

• Documents required for abroad education loan
• Study Abroad Scholarships for Indian Students
• Abroad education loan with collateral
• Abroad education loan without collateral
• Education loan for NRI applicants 

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