Student Loan: How to use the money and save more?

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.

Related posts:

1. How to Use Student Loan from India
2. How to Save Money on International Student Loan.
3. How to Earn Interest from Student Loan Money
4. When To Apply for Student Education Loan?
5. Paid extra college tuition fee? No worries
6. Who else wants to know about student loan?

Tagged as: FAQ's