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Hidden Costs of Studying Abroad and How to Factor Them Into Your Loan

Latika Sharma


Studying abroad is a dream for many. It is a golden opportunity to explore new cultures, gain a global perspective, and attain top-notch education. However, beyond all these dreams lies a financial reality that can catch even the most prepared students off-guard.

Enter hidden costs. These are the ninjas of the finance world. Nobody knows where they come from and when they suddenly cripple you financially. These are generally the overlooked expenses that you incur beyond tuition fees.

According to a global survey, half of the students surveyed reconsider their choice of studying abroad due to these hidden expenses.

You must identify hidden costs and prevent financial shortcomings in your overseas education endeavors. This article will cover all critical aspects of tackling just that.

Zolve: Student Loan for Abroad studies
Zolve student loan for abroad studies

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Understanding the Full Cost of Studying Abroad

When understanding the total cost of studying abroad, we need to keep two things in mind, i.e., the basic costs and the hidden ones.

Tuition Fees and Basic Living Expenses

The first factor that comes to mind when considering studying abroad is tuition fees. These are charged by the institution you are enrolled in to provide you with education. Tuition fees vary depending on the country, city, and institute chosen for studying.

Another aspect of foreseen costs is that of living expenses. This comprises accommodation, food, utilities, transportation, and other miscellaneous expenses (laundry, household items, toiletries, etc.).

The Hidden Costs

While you may be quick to calculate the usual costs, there are some additional and unforeseen expenses that you might not account for. These include visa fees and health insurance. They don’t seem like much. However, they can drastically disbalance your entire budget.

Healthcare overseas is quite costly, and even a short trip to the hospital can surely drill a hole into your pocket. Besides hospitals, visa expenses can take up a major chunk of your budget if not accounted for. A visa is expensive if you wish to become a permanent resident or get a job overseas.

Identifying Hidden Costs

Hidden costs are not limited to those discussed above; they even creep into your usual accounted expenses. The following are some examples.

Travel and Mobility

While you must have considered commute in your studying abroad costs, the crux lies in what kind of transportation you opt for. For example, travelling by car will be much cheaper than using public transport such as buses or the metro.

The hidden cost lies in whether you plan on getting a monthly pass for public transport or getting a new ticket each day. In almost every city worldwide, getting a travel pass is much more affordable than buying a new ticket daily.

Communication Expenses

Communication expenses are exorbitant overseas compared to countries like India. This includes internet services, phone plans, and other communication costs. The hidden cost lies in the difference in amounts between the chosen phone and internet plan and the most cost-efficient plan.

Personal and Leisure Activities

You have already counted all these expenses. However, it is often overseen that you will not be studying round the clock. Sometimes, you would need a break and go for a hangout.

Whatever personal and leisure activities you choose to do during this break will also factor into your budget. These activities include going to restaurants, movies, amusement parks, etc.

Budgeting for the Hidden Costs

Now that you know the different variations of hidden costs, you can quickly identify them. However, budgeting for these hidden costs remains a concern. There are some ways you can effectively budget for these unforeseen costs.

Creating a Comprehensive Budget

Creating a comprehensive budget is highly important. This budget will include all your expenses, be it the usual or the hidden ones. Use the following steps to create this budget:

  • List your known expenses, such as tuition fees, accommodation, food, and transportation.
  • Research the hidden costs and factor them into your budget. These include visas, health insurance, communication, and study material.
  • Account for personal and leisure activities, such as a weekend hangout or that summer break trip you’re longing for.
  • Once you have factored in all these expenses, it is equally important to monitor your expenses to ensure you are not overspending. Keep reviewing and adjusting your budget per requirements for optimal finance allocation.

Saving Strategies

While pursuing continuous budget adjustment and finance re-allocation, it is highly helpful to save money for emergency needs or future goals. This can be done by cutting costs in areas where spending can be reduced.

Part-time jobs can also help you quickly manage your finances and make some extra bucks on the side. This supplements your budget and helps you easily tackle those extra money needs now and then.

Financing Your Study Abroad

You are fully aware of the hidden costs and the correct method for creating a comprehensive budget. Now, the only concern is securing funds for your study abroad endeavors. You can easily procure these funds by taking out an education loan.

Education Loans

Education loans are the type of loans given by financial institutions specifically to finance your education, be it domestic or overseas. You can choose between two types of education loans:

  • Secured Loans: These types of loans require that you keep something with the bank as collateral. Secured loans offer higher loan amounts and lower interest rates compared to unsecured loans. This is because the risk of losses is minimal here.
  • Unsecured Loans: In contrast, unsecured loans do not require any collateral. However, this results in comparatively lower loan amounts being sanctioned at higher interest rates. This is because the risk of default and losses is high here.

But how do you determine whether you are eligible for a loan? If you are, then what is the application process?

Loan Eligibility

The following are the eligibility criteria to secure a study abroad loan:

  • You must be an Indian national.
  • If you are under 18, your parents will have to take out the loan.
  • You must have a solid academic record.
  • You must have been accepted to a reputable overseas university, institution, or college.
  • Since banks favour courses that are job-oriented, your chosen course must be technical or professional.
  • A co-applicant with a stable income is required to act as a guarantee in case you default on your education loan..
  • Loan underwriting is also considered at times. This ensures minimal to no interest payment loss for the financial institution.

Application Process

If you fulfill the eligibility criteria, you must follow an application process to secure a study abroad loan.

  • Conduct thorough research to learn all about eligibility, interest rates, and other little extras. You can use loan comparison websites for added convenience. This can help you secure a higher loan at a lower interest rate.
  • Apply for the loan online or by visiting the bank at your convenience.
  • Gather all the necessary documents required for the loan application. If any documents are missing during the application process, your loan application might be rejected.
  • Fill out the loan application form and attach all the required documents in the exact order mentioned in the form.
  • The bank will verify the information and documents provided.
  • The bank will then evaluate your collateral’s actual value based on certain criteria and even check your credit score (if applying for an unsecured loan).
  • Some lenders may even require an interview as a part of the process.
  • If everything is in order, the lender will approve your education loan and disburse the amount in your specified bank account.

Documents Required

The following is a general list of documents required by lenders during the education loan application process:

Identity-related Documents (Both Applicant and Co-applicant)

Academic Record Documents (From Applicant)

Financial Documents from the Co-applicant

Technical Documents

Legal Documents

KYC Documents

10th result

Salary slips of the last 3 months

Approved layout plan and permissions (if applicable)

Sale/gift/partition deed

PAN Card

12th result

Copy of Form 16 for last 2-3 years or copy of IT Returns for last 2-3 financial years, acknowledged by Income Tax Dept.

NOC and allotment letter

Khata certificate and extract

Driving License

Proof of admission

Bank account statement for the last 6 months (salary account)

Possession certificate (if applicable)

Encumbrance Certificate (EC)

Aadhar Card

Undergraduate result semester-wise (If required)

Business address proof (If Applicable)

Copy of prior sale deeds

Latest property tax receipt

Valid Water/Electricity/ LPG Bill

Entrance exam result - abroad institutes (GRE, GMAT, TOEFL, IELTS, etc.)

TDS certificate (Form 16A, if applicable)

Conversion certificate where the property has changed from agricultural to non-agricultural use


Voter’s ID Card


Last 3 years ITR

Urban clearance certificate


Current House Lease Agreement


Certificate of qualification (for C.A./ Doctor and other professionals)



Valid Passport


Bank account statement for the last 6 months



Incorporating Hidden Costs Into Your Loan

When going to study abroad, incorporating hidden costs into your loan is not just beneficial but essential. This is because by including all probable expenses in your loan, you ensure that:

  • You avoid all unexpected costs, ranging from visa fees to emergency flights back home.
  • Your budget will remain constant since you have already accounted for unforeseen expenses and added them to your loan. Thus, you can pay your EMIs on time and maintain a good credit score.

These benefits help you focus on what matters the most: your education. Apart from this, you can even negotiate the terms of your loan with your lender. This can be done in the following ways:

  • Present a comprehensive budget to your lender specifying all expenses. Make sure this budget includes hidden costs as well. This will show your financial acumen and the need for a larger loan.
  • A solid academic record can help you get a larger loan or reduce your interest rate. An excellent academic record shows you have a better chance of landing a high-paying job. Thus, the risk of default slightly decreases.
  • Do not settle for the first offer that you get. Check out the terms at which other lenders are providing the same loan, and choose after careful analysis.


To conclude, thorough financial planning is not just a recommendation but a necessity. The world of international education extends far beyond tuition fees, and overlooking these hidden aspects can lead to unexpected financial hurdles.

Zolve can be your partner in education financing. It is a financial platform designed to ease the burden of education loans for students aspiring to study abroad. Compare loans from 15+ lenders and find the best fit for your needs.

Zolve provides various advantages, such as no-collateral loans, competitive interest rates, and comprehensive coverage. Visit Zolve to start comparing loans and take the first step towards a financially secure study abroad journey.

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