Understanding Education Loan Coverage
Education loans are designed to support students financially, but do they cover more than just tuition fees? Many students worry about managing their daily expenses while studying, especially when pursuing higher education abroad or in expensive cities. The good news is that most education loans include a provision for living expenses, but the extent of coverage varies based on the lender and the loan scheme.
This guide breaks down what living expenses are covered, how to apply for an education loan that includes them, and alternative funding options if your loan falls short.
Gold Rate
15April 2025
What Living Expenses Can an Education Loan Cover?
Most education loans go beyond tuition fees and cover essential living expenses, such as:
1. Accommodation Costs
- Rent for hostels, PGs, or private apartments
- University dormitory fees
- Security deposits (in some cases)
2. Food & Daily Expenses
- Monthly grocery bills
- Dining expenses
- Basic utilities (electricity, water, internet)
3. Travel & Transportation
- Flight tickets (for international students)
- Local commuting expenses (bus, metro, train)
4. Study Materials & Equipment
- Books, laptops, and study-related gadgets
- Lab fees and project expenses
5. Health Insurance & Medical Costs
- Mandatory health insurance (especially for foreign studies)
- Medical emergencies not covered by insurance
6. Additional Course-Related Expenses
- Study tours, thesis, dissertation, and project work
- Any other expenses required for course completion, as supported by the institution
Types of Education Loans and Living Expense Coverage
| Loan Type | Living Expenses Covered? | Coverage Details |
| Government-Funded Education Loans | Yes | Covers accommodation, travel, food, and books within a set limit |
| Private Bank Loans | Yes | Higher loan amounts include living expenses |
| NBFC Education Loans | Yes | Flexible financing with customized disbursal |
| Scholarships & Grants | No | Usually covers only tuition fees |
How to Apply for an Education Loan Covering Living Expenses
Step 1: Check the Loan Scheme’s Coverage
- Review the loan policy from government banks, private lenders, and NBFCs.
- Confirm if living expenses are included in the total loan amount.
Step 2: Estimate Your Cost of Living
- Research accommodation, food, and transportation costs in your study location.
- Universities often provide an estimated cost-of-living sheet for students.
Step 3: Apply for a Loan with Adequate Funding
- Use the Vidya Lakshmi Portal or apply through banks and NBFCs directly.
- Mention living expenses in your loan application under “additional costs.”
Step 4: Loan Disbursement & Usage
- Banks usually disburse tuition fees directly to the university.
- Living expenses may be credited to the student’s account in installments.
Alternative Funding Options for Living Expenses
If your education loan does not cover all living expenses, consider:
- Part-time Jobs & Internships: Many universities allow students to work part-time.
- University Grants & Stipends: Check if your institution offers housing grants or financial aid.
- NBFC Education Loans: Financial institutions like Propelld provide flexible education loans that cover 100% of living costs.
| Feature | Details |
| Max Loan Amount | ₹50 Lakhs |
| Processing Time | 10x Faster than Banks |
| Collateral Required? | No |
| Approval Rate | Higher than Banks |
| Special Benefit | Marks-Based Loan Approval |
Plan Your Education Loan Wisely
An education loan can help fund both tuition and living expenses, making it easier for students to focus on their studies without financial stress. Always check your loan terms to ensure it covers essential costs like rent, food, and travel.
If your bank loan doesn’t provide enough coverage, explore NBFCs like Propelld, which offer hassle-free education loans covering 100% of fees and living expenses.
Worried about pledging assets for an education loan? Many lenders offer education loans without collateral, making higher education more accessible.
Why Propelld?
Propelld offers easy and flexible education loans with quick approval and low interest rates. It provides customized repayment options, making higher education more accessible without financial stress.
The following are the primary benefits of Propelld:
| Particulars | Details |
| Max Loan Amount | 50 Lakhs |
| Collateral | Not Required |
| Moratorium | Available |
| Processing Time | 10 Times Faster than Banks |
| Disbursal Time | 7 Days |
| Approval Rate | Higher than Other Banks |
| Special USP | Marks Based Approval |
| % Financed | 100% of Fees |
Why Propelld?
The following are the primary benefits of Propelld.
| Particulars | Details |
| Max Loan Amount | 50 Lakhs |
| Collateral | Not Required |
| Moratorium | Available |
| Processing Time | 10 Times Faster than Banks |
| Disbursal Time | 7 Days |
| Approval Rate | Higher than Other Banks |
| Special USP | Marks Based Approval |
| % Financed | 100% of Fees |
FAQs on Education Loan Coverage for Living Expenses
1. Can an education loan be used for rent and daily expenses?
Yes, most education loans include living expenses, but the amount varies depending on the loan provider.
2. How is the living expense amount disbursed?
Banks either transfer it directly to your account or provide it in installments.
3. Do government banks cover living expenses in education loans?
Yes, but the coverage amount is usually lower than private banks or NBFCs.
4. What if my education loan does not cover living expenses?
Consider NBFC loans, part-time work, or university stipends as additional funding options.
5. Can I take a separate loan for living expenses?
Yes, some financial institutions offer personal education loans specifically for living costs.
6. Do all banks provide education loans with living expenses coverage?
No, some banks may only cover tuition fees. It’s essential to check the loan terms before applying.
7. Is there a separate application process for living expenses in an education loan?
No, living expenses are usually included in the total loan amount if specified in the application.
8. Are living expenses covered for both domestic and international students?
Yes, but the amount varies. International students often receive higher living expense coverage due to higher costs abroad.
9. What if my estimated living expenses exceed the loan amount sanctioned?
You may need to arrange for additional funds through scholarships, part-time work, or alternative loans.
10. Can I claim tax benefits on the living expenses portion of my education loan?
No, tax benefits under Section 80E apply only to the interest paid on education loans, not living expenses.
