Prodigy Finance - June, 09 2021
6 min read
About the author
At Prodigy Finance, we're committed to helping international talent to achieve their education dreams. We offer international student loans to qualified individuals attending top master's programmes in the US.
Can student loans cover living expenses? Read on to find out how to get funding for tuition and living expenses when you study abroad.
An international masters degree costs much more than tuition - and that alone is a sizeable investment into your future.
What does the Cost of Attendance mean?
The cost of attendance (CoA) is the average annual cost to attend a particular university. This includes everything you need to complete your degree, including a place to live, food, transportation, books, and - if you’re an international student - mandatory medical insurance. The CoA varies from university to university, as charges of tuition, board, and other expenses are different everywhere.
And, the CoA provided by your university isn’t necessarily the same as your budget as Smith Shah discovered when organising his finances for his MS in Industrial Engineering at in the US. In fact, the difference amounted to an additional $7000 based on his expectations and intended lifestyle in the States.
Why you need a loan that covers more than tuition
If you’re already deep into budgeting for your international degree, you already know that putting together your budget isn’t as easy as taking the CoA your school gives you and breaking it into sub-categories.
Like, Smith, you’ll probably need a little more than the CoA and you should take into account that:
It’s difficult to be precise about your expenses, especially if you’ve never lived in your host country before. You can do all the research you like, but life - and your new classmates - will throw unexpected opportunities your way and you won’t want to miss out.
Getting a visa requires you to prove you can account for every expense. If you can only demonstrate you can meet the minimum, you may not be granted that all-important visa, whether it’s an F-1 for the US or a study visa for any other countrytext.
Prakash Singh, a 2018 MBA graduate from The Marriott School of Business at Brigham Young University in the US, used his Prodigy Finance Loan Letter (also known as a Sanction Letter in some countries) to provide proof of funding to his university. Later he presented it again to US Immigration and Naturalization Service (USICS) when applying for his F-1 study visa.
“In the visa interview, I was asked to explain how I am going to cover my tuition and daily expenses. I explained to them the options I had with photocopies of Prodigy Finance’s Loan Letter and other supporting documents and they were satisfied with that.”
Why don’t all lenders offer loans to cover more than tuition?
International masters students like Smith sometimes struggle to find the right loan for their education. You might fall into one of these groups:
Can get a loan, but it’s not enough to cover CoA.
In some countries, international education loans are available - but only cover tuition or the CoA of a local university. Taking one could rule you out for additional funding elsewhere.
Can get a loan, but can’t transfer that amount out of the country.
Some countries prohibit or highly tax large sums leaving the country. Your loan might not cover your expenses after paying taxes and transfer costs.
Can get a loan, but the interest rate is too high to consider.
Whether you take a loan in your home or host country, there are just some places and circumstances with interest rates that make it nearly impossible to repay.
Can get a loan that covers CoA, but only if you find more collateral.
In countries with banks that demand collateral, you often need to back up your loan with assets far greater than the tuition costs, let alone the CoA.
Smith found himself in the third group before applying for a Prodigy Finance student loan. Although he would have taken a loan with higher interest rates, he wasn’t keen to cripple his financial future before setting foot on campus.
And, it “meant the world” to secure the funds he needed to complete his first year at . He also secured provisional funding for his second year.
Prakash also looked into local loans. He found one that would have covered almost the same amount as his Prodigy Finance student loan, but it didn’t offer the same benefits.
He even considered waiting to pursue his studies if Prodigy Finance wasn’t able to assist.
“The other option I had was taking education loans from regional banks. However, I would have had to convert those amounts to USD which would have been an added loss in terms of exchange rates. So, Prodigy Finance was definitely the best option.”
Can international students get a loan that covers more than tuition?
Yes! But, you may need to look further afield than your local bank.
Smith accepted a Prodigy Finance loan because:
- He could secure a loan up to the amount of his school’s CoA.
- He secured better interest rates than he could anywhere else.
- He didn’t need to put up any collateral or co-signer. (You never need those for a Prodigy Finance loan.)
- He won’t face any prepayment penalties if he decides to pay off his loan sooner.
Prakash made a decision on his lender based on the same criteria and because, personally, it allowed him time to focus on what really mattered.
“It meant a lot to me, a person who comes from a moderate background and was the first person in the family to set foot outside the country to fulfil the dream. The process of application and fund transfer was very organised and smooth which allowed me to focus on other important things and not to spend time worrying about finance.” - Prakash Singh
Vishnu Chundi also looked at all of his options and took a Prodigy Finance student loan because it offered the lowest interest rate. He also made payments during his grace period (which, with Prodigy Finance, is a complete payment holiday, and does not require you to make any repayment during this time).
Many students, like Misha Raina, struggle to finalise loan contracts with local banks - even when they’re prepared to put up all the collateral a bank requires. She’s taken a Prodigy Finance loan to get her MBA in the US.
Before deciding on any loan, it’s important to do your research on what’s available to you. And, this may mean reaching out to several banks, other financial institutions, and international student loan providers like Prodigy Finance. The more data to consider, the more likely you are to find the right loan for your needs.
Should you take a personal loan for living expenses?
You can’t use a personal loan to pay for your college tuition. You can take one for your living expenses, but there are quite a few drawbacks and it is generally not recommended. Instead, you can explore other alternatives, including using your student loan for living costs.
Do student loans cover living expenses?
Higher education involves a lot of costs over and above the tuition fees, and the board and room expenses. The US Department of Education allows you to use your student loan for living costs because having these expenses taken care of leaves you with more time to study and earn your degree. However, you should ensure that you don’t spend this money on unnecessary luxuries.
You can get student loans that cover living expenses from private lenders as well.
Does Prodigy Finance cover living expenses?
Prodigy Finance covers up to 100% cost of attendance, depending on your course and school. Funds will get disbursed directly to your school. Your school will credit your tuition cost and transfer the remaining amount to your bank account. Take a look at the process here.
Need a student loan?
Prodigy Finance provides collateral-free loans to international masters students. Find out what offer you can get.
Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority.
What next? Find out more about Prodigy Finance’s education loans or check out the list of schools we support.
For any other information about Prodigy Finance, or our student loan process, feel free to check out or browse our site, or register for a webinar to have your questions answered by one of our team.
In the case of an unsecured loan, candidates can receive up to Rs. 40 Lakhs depending on the course and chosen college," says Eela. Some lenders offer even bigger amount as collateral-free loan but again these are offered only to select few students who are going to study in the most reputed institutions.Can I get full loan to study abroad? ›
Yes, you can get 100% education loan for your education abroad.What are the two disadvantages of study loans? ›
Con: Student Loans Can Penalize You for Late Payments
Missing payments on student loans will result in penalties. Some of these penalties include added interest, higher fees, or even wage garnishment. As mentioned above, this also affects your credit score, having a rippling effect on big purchases you plan to make.
Top Lenders to Apply for Education Loan without Collateral
Public banks like SBI, Bank of Baroda, etc offer applicants with a loan of upto 7.5 Lakhs without collateral. Private banks like Axis Bank, ICICI Bank, HDFC, etc offer students a loan amount upto 40 lakhs without collateral.
HDFC Credila offers education loans with preferential interest rates for reputed universities. Thousands of students who are studying outside India have obtained funds from HDFC Credila.Is income proof required for education loan? ›
Documents Required from Co-applicant (if salaried):
Identity proof. Last 3 months salary slips or salary certificate on employer's letterhead. Last 2 years Form 16 from employer or last 2 years Income Tax returns. Any other income proof that is not reflected in the above mentioned documents.
Axis Bank India offers education loans at attractive interest rates for a loan amount ranging from Rs 50,000 to Rs 75 lakh. Apply for an education loan today and fuel your dreams!Which banks give education loan easily? ›
|Name of Bank||Interest Rate (p.a.)||Processing Fees|
|SBI||7.50% onwards||Up to Rs.10,000|
|Axis Bank||13.70% to 15.20%||At the discretion of the bank|
|Bank of Baroda||7.95% onwards||1% of loan amount up to Rs.10,000|
|HDFC Bank||9.55% to 13.25%||Up to 1% of loan amount + tax|
There is no restriction on maximum amount of loan that can be sanctioned under the education loan scheme. For NRI students Maximum quantum Rs. 20 Lakhs & Rs. 30 Lakhs for premium institutes.Are student loans a good idea? ›
They can be considered good debt because the money you're borrowing to attend school is your ticket to earning a degree and getting hired at a well-paying job. That debt should pay itself off over time with a lucrative career in place.
- Foregoing Grad School.
- Forget Buying a Home.
- Living at Home.
- Lowering Your Net Worth.
- Put Your Dreams on Hold.
- A Lower Credit Score.
- Student Debt Doesn't Go Away.
- Being Disqualified for a Job.
College graduates are drowning in debt but it didn't have to be this way. Steadily, tuition increases have outpaced incomes forcing families to rely on student loans to help foot the bill. At this pace, “outstanding student loan debt could topple $3 trillion by 2035,” according to one expert.Can I get 20 lakhs education loan without collateral? ›
According to the rules, collateral security is not needed for loans up to Rs. 4 lakh. Only when the loan surpasses a predetermined sum determined by the bank will collateral and a third-party guarantee be necessary.Can I take 2 education loans at the same time? ›
Well, the answer to the above question is - Yes, a student can be eligible for a second education loan. For this, they can either apply for a second education loan from the bank they already have taken their first loan from or they can apply to a different bank.Can I get 50 lakhs education loan without collateral? ›
30-50 lakh. For any loans up to Rs. 4 lakh you will not be required to provide any collateral or third-party guarantee.Do student loans cover study abroad? ›
As long as you're attending an eligible program, you can use your federal student loans for studying abroad. However, federal loans might not cover all your expenses, meaning you may need to find other sources of funding, such as income from a part-time job, scholarships or a private student loan.How do international students get student loans? ›
Most international students must have a US co-signer in order to apply for a student loan. Although there are no co-signer loan programs at select schools in the USA and Canada, almost all international students will require a co-signer. A co-signer is legally obligated to repay the loan if the borrower fails to pay.Can I use student finance to study abroad? ›
Apply for student finance for your study abroad using your student finance account. You can register and set up an account if you do not already have one. You'll then receive a course abroad form. Once you've filled in and returned the form, you'll automatically receive a travel grant form if you're eligible.Do you pay student loan if you live abroad? ›
Will your student loan be written off when you're living abroad? Sadly not. Your student loan won't be cancelled just because you're moving overseas. You'll still have to pay it back.