Expenses Covered by Education Loan for Study Abroad: A Comprehensive Overview

When opting for an education loan to study abroad, most students ask, "Which expenses are covered by an education loan?". So here is the list of expenses covered and not covered by an education loan. 

Expenses are covered by an Education Loan

The Education Loan covers significant expenses such as university fees, living expenses, and travel expenses. 

🎓 University Tuition Fees

University Tuition Fees are the primary expense of Studying Abroad and are covered under Education Loans. Most Banks and NBFCs cover 100% of Tuition Fees, and some lenders may keep the margin. The Bank and NBFCs offer the option of Pre-Visa Disbursement if you have to pay University Fees in advance or a Tuition Deposit. 

You can ask your bank to reimburse you if you have already paid the tuition fees from your savings due to the approaching university deadline. The reimbursement will be provided in an Indian Bank Account or a Student's foreign bank account, subject to Banking policies. 

In the case of the Bank's Margin, you have to contribute the agreed margin each time they disburse for University Fees. For example, the agreed margin is 50%, and there are 6 semesters. The lender will pay the university fees on an alternate semester basis, where the bank will pay the first, third, and fifth semester fees, and the Co-applicant will bear the second, fourth, and sixth-semester fees. 

🏠 Living Expenses

An education loan covers daily expenses such as Accommodation, Food and Groceries, Transportation, and Basic Necessities. Instead of releasing separate amounts for Accommodation, Food, Transport, and other fees, Banks and NBFCs release a lumpsum amount for Living Expenses based on the expected Cost of Living in the Country. In specified Banks, you may be asked to provide receipts or proof of payments. 

The lender will load the money in a Forex card or directly deposit it into the student's foreign account. Due to increased fraudulent activities, they refrain from paying living expenses in Indian bank accounts. 

🍁 GIC Account (Canada)

An Education Loan covers the entire expenses of the GIC account required for Canada. As per requirement, the Bank or Lender will do Pre-Visa disbursement and transfer the required funds to the Canadian Bank Account of your choice. The current requirement is CAD 20,635 + processing Charges. 

Open your GIC account with TD Bank through Abroad Cube and benefit from ZERO processing fees. Standard processing fees in other Banks are between CAD 150 and CAD 200. 

🏦 Blocked Account (Germany)

A blocked account is mandatory for most students applying for a German student visa. Hence, the Bank will disburse the Pre-Visa funds and release the funds required for the Blocked Account. As of 9th April 2025, the requirement for a Blocked Account for a German student Visa is EUR 11,904, which is equivalent to INR 11.75 Lacs (approx.). If you opt for a Public University in Germany, the Bank will only give you an Education Loan for a Blocked Account and Living Expenses. 

Open your Blocked account with Expatrio through Abroad Cube and get Lower Fees, Free Travel Insurance, and Free Current Account benefits.

✈️ Travelling Expenses

The expense of a one-way flight ticket is included in the Education Loan. Most NBFCs release about 10% of the Sanction amount as Travelling Expenses after receiving the required Visa and permissions to travel. 

💻 Laptop or Equipment Costs

An education loan covers other expenses, such as purchasing a Laptop or required equipment for Study purposes. 

It is NOT mandatory to take an Education Loan for all expected expenses. If you need an Education Loan only for University Fees or Living Expenses, the Bank will Sanction that amount only. 

Expenses are NOT covered by an Education Loan

Certain expenses during the Study Abroad process are commonly NOT covered under an Education Loan by most banks. 

Student Visa Fees

The Student Visa Fees and Other Service Charges, such as VFS, are NOT covered by an Education Loan. Irrespective of the amount, you are expected to pay them directly.

Documentation Charges

The Expenses related to documentation of University and Visa Applications, such as Embassy Apostille, WES, Document Verification, Courier Charges, etc, are NOT covered by Education Loan.

University Application Charges

Education Loan does NOT cover the University or College Application Fees. These are out-of-pocket expenses, and you are expected to pay them yourself. The expected costs range between $100 to $500 depending on number of applications.

IHS Fees for UK

The Immigration Health Surcharge, which is £776 per year, is NOT covered by Education Loan. These fees must be paid before the Visa Application and are fully refundable in case of Visa Refusal.

OSHC Fees for Australia

The OSHC policy, which is mandatory for an Australian student Visa, is NOT covered by an Education Loan. This policy must be purchased before the Visa application and paid by the student directly. The expected cost is AUD 1400 for a Master's Degree and AUD 2800 for a Bachelor's.

To get a discounted Immigration Approved OSHC policy, use the Abroad Cube Comparison Tool .

Health & Travel Insurance for Ireland

The Travel Insurance policy, mandatory for an Ireland Student Visa and must be purchased before the Visa Application, is NOT covered by the Education Loan. If applicable, you may use the acceptable Travel Insurance provided by the Education Loan provider in India. The Irish Embassy has approved certain Indian insurance companies.

Shopping Expenses

The education loan does not cover expenses such as purchasing luggage bags, clothes, and other necessary items.

Consultant Charges

Consultant Charges, such as Service Fees, Processing Fees, Application Fees, or other expenses, are NOT covered by the Education Loan.

Language Exam Fees

Charges related to English Exams such as IELTS, PTE, TOEFL, and Duolingo or Competitive Exams such as GRE, GMAT, SAT, and ACT are NOT covered under an Education Loan.  

The above-mentioned lists are for reference purposes only. The inclusions and exclusions are at the discretion of the specified Lender.