If you are from an economically developing country and planning to study abroad, financing your education becomes as important as choosing the right course and university. In today’s digital age with countless resources available online, education indeed knows no boundaries! Whether you are financially stable or not, scholarships and loans make quality education abroad accessible to every dreamer from any corner of the world.

However, not every student is finance savvy, so a challenge arises as most of the aspirants face hurdles in understanding the types of loans available to them and the expenses covered under study abroad loans. So, whether applying for an education loan to study in UK, USA, Australia, or elsewhere, consider this article as your finance guidebook.

Types of Study Abroad Loans

Firstly, let us explore the two primary types of study-abroad loans available to international students,

  • Unsecured Education Loans: These loans don’t require collateral, making them accessible to students without assets to pledge. Banks, Non-Banking Financial Companies (NBFCs), and private lenders typically offer unsecured loans for study abroad, providing flexibility but often at higher interest rates compared to secured loans.
  • Secured Education Loans: Secured loans necessitate collateral, typically tangible assets like property, vehicles, etc, or intangible assets like fixed deposits, life insurance policies, etc. Public and private banks commonly provide secured loans for study abroad, offering lower interest rates due to the reduced risk associated with collateral.

Expenses Covered Under Study Abroad Loans

Study abroad loans are designed to offer financial support and ease the financial burden of international students. Here is the list of expenses that lenders usually cover in their education loans making your dream of studying abroad more achievable than ever before!

  • Tuition Fees
    Regardless of your level of study, whether it’s a bachelor’s, master’s, or Ph.D., tuition fees are the primary expense covered by overseas education loans. Once you receive your offer letter from the university, simply present it at the bank, and the tuition fees for the entire program duration are directly disbursed to the university.
  • Living Expenses
    Whether you are dealing with NBFCs, private banks, or public banks, this provision ensures you have enough funds to support yourself during your time abroad. Factors such as location, course duration, and the standard cost of living in the study destination are considered when determining the loan amount. Also, living expenses may include various aspects like food, rent, and daily expenses, but the coverage extent may vary among financial institutions, and the disbursement process can differ as well.
  • Health Insurance
    When considering an education loan for Canada, Germany, the USA, or any other prominent study destination, health insurance is mandatory. Why? well, health expenses can sometimes be on the higher side, and these countries often require health insurance to ensure your well-being and provide financial support in times of emergencies. However, it is crucial to note that only a few banks include health insurance as part of the loan coverage. For more detailed info on this, it is advisable to consult your loan advisor.
  • Exam and Studies Related Expenses
    Apart from tuition fees, study expenses may include additional university-related costs like library fees, laptops, study-related visits, examination fees, and course-related equipment. While many financial institutions include these expenses in the loan amount, some have limited coverage and ensure these expenses don’t exceed 20% of the total loan amount. It’s advisable to inquire with your bank for more information on this aspect.
  • Miscellaneous Expenses
    Certainly! Education loans often extend to cover additional miscellaneous expenses such as visa fees, student union fees, and other related costs. However, it is important to note that typically, it is only the private banks or institutions that include coverage for these types of expenses.
  • Travel-Related Expenses
    Let us accept the fact that airfare to your study destination can often be expensive. Fortunately, some banks do offer coverage for air tickets. Still, it is important to note that travel-related expenses aren’t included in the loan package. You will need to request it separately if you need assistance with travel costs.

In conclusion, while opting for an overseas education loan is a smart move, it is equally important to start repaying the loan at the earliest. This can be achieved through part-time jobs, savings, and investments. Additionally, exploring scholarship opportunities is highly recommended. To understand the process of how to get education loan for abroad studies in depth, seeking guidance from an expert overseas education loan advisor becomes paramount.

Don’t miss out on the opportunity of a lifetime by financial constraint – seize it!