Does an education loan for studying abroad include airfare? If no, then what things are included and what things are not?

What does an Education Loan Cover?

Typically an education-loan covers the following expenses:

Accommodation charges, expenses related to the purchase of books and equipment, examination and library fee, travel expenses, and insurance premium for the student.

Note — The bank does not pay you any money; the loan amount is credited directly into the institution’s account at the beginning of each semester or year as stipulated by the institution.

Must-Know Loan Facts:

You will have to provide the bank, margin money for student loans exceeding Rs 4 lakhs which is usually 15% of the loan amount.

For student loans about Rs 7.5 lakhs, you will generally have to offer the bank an LIC policy or a few documents of immovable property in your name.

Be prepared for a slightly lower loan amount at the time of disbursement, as it may be affected by the exchange rate at the time of disbursement.

Your loan will have a moratorium period or holiday period, only after which you will be required to start with your EMIs. This period could last up to the duration of the course or up to the time period till you find employment and varies from bank to bank.

Completing your KYC or (Know Your Customer) is an important part of the loan-process.

This will help the loan-provider feel assured that the student has the ability to repay and that documents provided are accurate.