Expenses covered by the education loan


Abroad education is an asset to leading a quality life, and students who wish to study abroad are familiar with the expenses involved. When considering studying abroad, finances become an important factor since a large sum of money is required to study abroad. Being an Indian student, you must be aware of the living costs and currency differences between an overseas nation and your native country.

Still, the demand to study abroad has increased in recent years because of the easy availability of education loans abroad. However, there is a myth revolving around the idea that abroad education loans cover only tuition costs. Well, that’s not true, since an education loan abroad covers costs like tuition and living expenses.

Why is there a need for education loans?

We have listed some of the benefits of taking out an abroad education loan abroad to pay off these expenses instead of liquidating your family assets and self-financing your education. These benefits will make you realize how you can easily pay off these expenses with the help of a foreign education loan.

  • Tuition fees and living costs in any foreign country can easily go up to INR 30 to 40 lakhs, and if your aim is the USA and Canada, then this range can go up to 50 lakhs to 1 crore INR. To arrange for such a large amount.
  • Anyone who is moving abroad must have health insurance. In such cases, some education loans have also started covering the cost of health insurance and one-way travel fares.
  • Applying for an education loan to study abroad from authorized banks and NBFCs ensures utmost transparency.
  • Education loans have a repayment period that lasts up to 8 to 10 years, including course duration and moratorium periods. Repayment of the principal loan amount begins after the completion of your study only, which means you will have sufficient time in hand to repay the loan.
  • Instead of using your own savings, by taking an education loan to study abroad, you can safeguard your savings for your future.

List of expenses covered by an education loan abroad:

It's important to have prior knowledge about what expenses must be covered under your education loan. Most students are aware that only tuition fees and living expenses are covered in their education loans; however, other expenses like travel costs, stationery expenses, and the cost of international health insurance are also included in your education loan.


Tuition fees are an important part of foreign education loans; almost all lenders, whether they are banks or NBFCs, cover the cost of tuition fees in study abroad loans. Among all the expenses of studying abroad, tuition fees make up most of them, as tuition fees at any university will not cost you less than 5 to 10 lacs INR. The main objective behind borrowing the study abroad loan from a bank is to pay tuition fees only; other expenses like living costs and accommodation can be managed through part-time jobs.


The cost of living covered by an education loan depends on the loan provider. This cost varies from country to country; living expenses in countries like the USA, the UK, and Canada are higher than in Australia. There is no uniformity in the amount of living expenses covered by the education loan; the country chosen as the study destination will impact the amount of living expenses. Students are advised to pay attention to every detail related to living costs.


Other expenses, like study-related expenses, are also covered under education loans. Abroad education is not restricted only to college education; outside the regular curriculum, you will have ample opportunity to explore a variety of projects, research, and many more things that will help you enhance your knowledge. Many loan providers have started taking study-related costs into consideration and have initiated including them in education loans. This will include the cost of library fees, stationery, books, and laptops. Loan providers like SBI and Avanse are among the leading lenders in India that cover study-related expenses on education loans.


Traveling to an overseas country can cost you a lot. Banks have started including this cost in education loans, and students also get the fare amount as a part of their education loan. However, it depends on the lender whether they are willing to include this cost or not.


Medical facilities in foreign countries are expensive in comparison to India; it can add thousands of bucks to your bill, but having medical insurance is a smart move. Not only will this save you from paying unnecessary medical bills, but many countries, like New Zealand, Canada, and Germany, have made it mandatory for students to have medical insurance before applying for study visas. However, students are required to check whether their medical insurance costs are covered by their education loans.

What expenses are not covered under the education loan?

Studying abroad is full of new opportunities. You will also get chances to explore the new country and hang out with your international friends. Keeping these factors in mind, there is clarification on what expenses are covered under an education loan.

Education loans do not cover any costs associated with personal travel, movie tickets, or other entertainment-related expenses.

On average, a large portion of the total education loan amount will include only tuition fees, and the rest will include living expenses and study-related costs. However, entertainment expenses are not covered, and you have to bear the cost of them.

Factors to Keep in Mind While Calculating Your Expenses

An education loan is a one-time affair; after signing the loan agreement, there will be no room for changes. So, a student should keep in mind all the expenses prior to applying for the education loan. It is relevant to calculate the loan amount you will require to manage the tuition fees and all and how much you have in your hand. To calculate your expenses, give rational thought to the factors we have mentioned below:

  • Accommodation: In order to calculate your expenses in the right manner, make sure to consider the cost of accommodation. If you have decided to rent an apartment nearby your university location and hostel, look for shared accommodation to reduce the cost of rent and living.
  • Daily Expenses: If students are able to cook on their own instead of eating out daily, they can save a few bucks. This will substantially reduce their daily expenses.
  • Cost of Transportation: Use public transport instead of private taxis and vehicles for daily movement. It will save you from paying huge taxi bills.
  • Part-time jobs: Students can take up internships and other part-time jobs during their study period to maintain the flow of money as well. Various countries have a lot of opportunities for part-time work with fixed minimum wages.

All the above-mentioned factors are helpful for students to assess the amount they require in order to manage their education expenses. It's in the student's best interest to prioritize calculating all the expenses and giving rational thought to all the possible scenarios. Education Loan Guru understands the level of stress students have as they go through all the loan processes. Education Loan Guru will not only help you with the loan application but also guide you to an accurate idea of the expenses covered under an education loan

By Education Loan Guru