Studying in a new country is exciting, but it also comes with a long list of expenses beyond just tuition fees. Accommodation, groceries, transport, and even the occasional coffee run can add up fast. This is where education loans come into the picture. Not only do they cover tuition, but many also extend support for day-to-day living costs. One common question that students have is: Does an education loan cover living expenses? The answer is yes, many education loans are designed to support not just tuition, but also your daily needs while abroad. Understanding how to use your student loan wisely for these expenses is key to managing your finances while studying abroad.
Understanding the Full Cost of Attendance (CoA)
Before we dive into using student loans for living expenses, it’s essential to understand the Cost of Attendance (CoA). Most lenders define CoA as the total estimated cost of completing a year of study.
This includes:
- Tuition and fees
- Accommodation and utilities
- Food and groceries
- Books and academic supplies
- Travel and transportation
- Personal expenses like clothing, mobile plans, and toiletries
A common query among applicants is: Do student loans cover living costs? Since lenders assess the total CoA, they do factor in your everyday expenses along with tuition fees. When you apply for a student loan, lenders generally consider your CoA to decide how much to sanction.
Expenses Typically Covered by Student Loans
While terms may vary, student loans for living expenses are designed to support the following:
- Accommodation (on-campus housing or private rentals)
- Utilities and bills (electricity, internet, water)
- Meals and groceries
- Transportation (local travel, monthly passes)
- Textbooks and stationery
- Laptop or educational software
It’s important to read the loan agreement carefully. Some lenders list the expenses covered in education loans, so you know exactly how the funds can be used.
Disbursement of Funds for Living Expenses
Lenders often disburse the tuition fees directly to the university, and the remaining funds are sent to the student for living expenses, usually in instalments.
Understanding your loan’s disbursement schedule is essential. For example, if your loan covers two semesters, you might receive a portion of your living expenses at the beginning of each semester. Knowing when you’ll get the funds helps you plan your budget month-to-month, ensuring you don’t run out of funds mid-term.
Budgeting and Managing Loan Funds
Getting a student loan doesn’t mean you can spend freely. The key is to budget smartly so the funds last. To manage student loan living expenses effectively, it’s crucial to plan your monthly budget, prioritise essentials, and avoid impulse spending. Here are a few tips to help:
- Create a monthly budget: Split your funds across rent, food, transport, and other essentials. Use budgeting apps or even a simple spreadsheet.
- Prioritise needs over wants: It's easy to overspend on dining out or shopping. Try meal prepping and look for student discounts whenever possible.
- Track your expenses: Keeping track of your spending helps you stay on top of your finances.
- Save for Surprise Costs: If you get your semester funds all at once, pace your spending and save for unforeseen expenses.
Conclusion
Student loans support more than tuition—they help you manage living costs, so you can focus on your goals. If you’re just starting your study abroad journey, take the time to understand how your loan provider structures disbursements and don’t hesitate to ask questions.
Disclaimer:
T&C apply. Credila Financial Services Limited (Formerly known as HDFC Credila Financial Services Limited). The education loan facility provided by Credila Financial Services Limited will be at the sole discretion of the Company and within the Company's prescribed credit and underwriting norms/guidelines prevailing at the time of processing and disbursing the education loan. The Company maintains the right to change the interest rate at any time and at its sole discretion, without prior notice.
