Education Loan for Abroad Studies: Cost Breakdown & Funding Tips
Many Indian students want to study abroad in countries like the USA, UK, Canada, Australia, and France. Foreign education opens doors to global opportunities. However, studying abroad is very costly, and not everyone can afford it. You can study abroad with an education loan.
An education loan for abroad studies provides students with access to funding to study at a foreign university. It covers all kinds of expenses, including tuition fees, accommodation, travel, and study materials. In this blog, you will find a complete guide to the costs associated with studying abroad, along with smart funding tips to manage your overseas journey effectively.
What is an Education Loan for Abroad Studies?
An education loan for abroad studies is the amount you borrow from a financial institution to study abroad. These loans cover costs related to foreign education. It covers all expenses, including college/university fees, examination application fees, book purchases, accommodation, and travel costs.
You repay the loan through monthly instalments after completing the course. You get a moratorium period of 6–12 months after completing your studies, so your EMI starts only after you secure a job.
Which Costs Does an Education Loan for Abroad Studies Cover?
An education loan for abroad studies covers the following expenses:
Tuition & Academic Fees
Tuition fees are among the major expenses covered by an education loan. One can use the loan amount to pay off the tuition fees, of course, at the institution of your choice. The loan generally covers tuition fees for the entire course duration. In addition to tuition fees, it covers academic fees such as examination, library, and laboratory charges, as well as other expenses.
Living Expenses
An education loan for abroad studies covers living expenses such as accommodation, meals, transportation, and other daily needs. Lenders ensure you receive enough funds to support your education abroad. The loan amount depends on the study location, course duration, and the standard cost of living.
Travel Expenses
An education loan can include the cost of international travel to a study destination. This can cover airfare, local travel expenses, and initial relocation costs, such as airport transfers. However, financial institutions do not cover the travel costs by default. It will be included if the borrower requests it.
Travel and Health Insurance
An education loan often provides you with comprehensive health and travel insurance coverage. This helps safeguard wellbeing and financial support in emergencies while studying abroad.
Books and Equipment
While studying in a foreign country, the need may arise for specialised books, digital resources, and equipment. Education loans cover the cost of textbooks, reference materials, laptops, software, and laboratory equipment.
Miscellaneous Expenses
An education loan can also cover additional miscellaneous expenses. These include visa fees, resident permit charges, student union fees, project work, study tours, etc.
Smart Funding Tips for Studying Abroad
Taking an education loan for abroad studies is a big financial decision, and if you use it wisely, it can help to reduce your stress levels during and after studies. Here are some smart funding tips to help you stay in control and get the most out of your education loan: –
Plan Early and Estimate Costs Carefully
Start planning for a loan well in advance. Make a proper, realistic estimate of the total cost of studying abroad, which includes tuition fees, living expenses, travel costs, etc. A clear cost breakdown will help you borrow the right amount.
Compare Multiple Lenders
Many banks and NBFCs offer education loans. Compare their interest rates, processing fees, and the flexibility they offer, etc. Then choose the one that best suits your financial profile.
Strengthen Your Loan Eligibility
Your academic background and the co-applicant’s profile play an important role in loan approval. Strong grades, admission to a reputed university, and a co-applicant with good income can help you get better interest and a higher loan amount.
Use Moratorium Period Wisely
Start paying the loan interest during the study period or moratorium. This lowers the total interest and shortens the repayment period.
Final Thoughts
Studying abroad can change your life, but it also involves financial responsibility. Studying abroad is an expensive affair, but an education loan for abroad studies can help you to cover these expenses. However, you shall plan for this to reduce the stress.
Understanding the costs covered, estimating expenses realistically, and choosing the right lender are very important. By planning early, improving eligibility, and using the moratorium wisely, students can manage repayments more comfortably.
Frequently Asked Questions (FAQs)
Q1. Which expenses are covered under an education loan for abroad studies?
Answer: Education loan for abroad studies covers tuition fees, living expenses, travel costs, health and travel insurance, visa fees, etc.
Q2. When does the repayment for the education loan start?
Answer: Repayment for an education loan generally begins after the moratorium period, which includes the course duration plus 6-12 months after completion of studies.
Q3. Is the education loan interest a fixed rate or a floating rate?
Answer: The majority of lenders offer education loans on floating interest rates. However, this may change depending on market conditions.
Q4. Does an education loan include personal expenses?
Answer: Education loans do not include personal expenses. It only covers education-related expenses.
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We hope this guide to Education Loan for Abroad Studies helps you understand the costs of overseas education and make informed funding decisions. Explore these recommended articles for expert insights, practical strategies, and best practices in study abroad planning, education loans, and financial management.
