Student Loan: How to use the money and save more?
September 29, 2007 by Author
I had this question from one of the reader about Student Loan,
If I apply a loan for say $20,000 for the full course..it will include what all? How can I pay for my room rent, groceries, recharge, books,etc? How much will these expenses come to in a month?
Before continuing with this post, If you guys haven’t read Who else wants to know about about Student Loan, I suggest you to read , I have also discussed about monthly expenses, how much it would cost, what expenses are involved and how place of study will affect your monthly expenses.
Now, you should have clear idea about monthly expenses. So, part of the question about monthly expense is answered. Now, let me say about how to use the loan amount.
When you get loan approved, usually banks will ask for your I-20 which will have the amount listed for Tuition, Living Expense, Book and Others. Banks in India will use that as a proof for confirming your admission to U.S. Universities. Some banks will not issue for loan less than the amount stated in I-20, but majority of the bank will issue the loan. Its always better to get loan approved for amount atleast equal to the your total expenses. I-20 will list the expenses only for the 1st year of studies.
Masters degree will usually take 1.5 years to 2.5 years to complete. So, even though you your parents can cover your educational expenses, its nothing wrong to get loan approved for say 15 to 20 Lakhs( India ). It will be useful when applying for F1 student visa.
Bank will issue 2 demand draft’s. That’s the case with majority of the bank. Suppose you are going to do Masters in University of Florida at Gainesville. Then, your first demand drat will be issued in the name of the university and another demand draft will be issued in your name.
Total Student Loan Amount = Living expense + Tuition fees
Some bank will issue you just one demand draft for entire amount you request. One you reach U.S. it would take only few minutes to open a bank account in your name and deposit the demand draft.
Example:If your 1st year tuition fee = $15,000 ( University of Florida )
Living Expenses = $5,000 ( Your Name )
I usually prefer to carry only your first semester fee with you and living expense. Both in the form of Demand Draft.
Reason why I recommend to carry Demand Draft instead of Travelers Check.
Before your next semester begins, you can ask your parents to send next demand draft for paying college tuition fee. This would save you interest rate for some $7,500 as per our example for 5-6months.
Next question that will come in mind..
How much will be my exact fees?
What if I get Demand Draft more than the tuition fee.
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well its a nice topic sir
I have a doubt
U have considered that the edu load should be 15 to 20 lakhs but most of my friend just took 8 lakhs from their home ie student loan and they managed to pay the rest of the amount by doing an off campus jobs. I have read ur other article where u stated that doing off campus job is illegal. I am also planning to take the same amount that is 8 lakhs from home[i.e.,] student loan. Can u give me suggestion should i follow their foot steps or not???
@ Ravi
Getting approval for 15 Lakhs is different from using entire 15 lakhs. Even if you get 15 lakhs loan and use only 8 lakhs, its good for you.
Majority of students who couldn’t find part time jobs work off campus. It’s illegal, but its the risk that are taking. If you want to take that risk and work, thats upto you. But, you will understand more after you come here. Good Luck.