Funding for other expenses may come in handy to support your education abroad. (File Photo: AP)

Education loan can even pay for your travel expenses

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NEW DELHI: One takes an education loan not only to fund tuition fee but for many other expenses related to a course. A lender could even fund travel expenses based on the limit sanctioned.

Take the State Bank of India (SBI) for instance. According to the bank’s website, it can pay various fees, including hostel, examination, library, laboratory, and fund books, equipment, uniforms and computer (at reasonable cost), study tours, project work, and so on. The lender can even fund travel expenses.

Many lenders even fund some of refundable deposits that a university may ask a student to pay. Most lenders also fund the premium for an insurance policy. Financial institutions, however, typically don’t pay for external coaching.

But most of these expenses are capped – there’s a maximum limit on them. Most lenders use the term that these expenses should be at a “reasonable” cost. Also, they should be 20% of the total tuition fee payable for the course. While 20% is the overall cap, some lenders would fund only up to 75% of the expenses.

The refundable deposit is capped at 10% of the total tuition fee. There can be a maximum specified limit for each expense, too. For example, according to Avanse’s website, it provides travel expenses/passage money up to ₹75,000 for students travelling abroad.

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Funding for other expenses may come in handy to support your education abroad. However, lenders can also have maximum funding it would provide for students studying abroad. For example, the Bank of India provides a loan of up to ₹20 lakh for studying abroad, according to data from Paisabazaar.com. Bank of Baroda offers a maximum of ₹80 lakh, Union Bank of India provides up to ₹30 lakh.

Whatever are your expenses other than the tuition fee, you will have to manage them within the overall loan sanctioned to you.

(Do you have personal finance queries? Send them to mintmoney@livemint.com and get them answered by industry experts)

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