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How to Use Education Loan Money from India in USA in Demand Draft

I received this question from one of our avid readers, regarding Student Loans:

If I apply for a loan, let’s say for $20,000 for the full course, what will it include?

How can I pay for my room rent, groceries, recharge, books, etc.? How much will these expenses come in a month?

Before continuing with this post, please read this article first: Facts about education loan payments.

I have also discussed previously about the cost of graduate education in the USA and how your place of study will have some effect on your monthly expenses.

So with that, part of the question on monthly expenses is already answered. Now, let me discuss about how to use the loan amount.

When you get your loan approved, banks will usually ask for your I-20, which will bear the amount listed for tuition, living expense, books, and others.

Banks in India will use that information as a proof for confirming your admission to U.S. universities.

While some banks will not issue loans less than the amount stated in I-20, majority of banks will issue the loan.

It is always better to get a loan approved for an amount at least equal to your total expenses. I-20 will list the expenses only for the 1st year of studies.

A master’s degree will usually take 1.5 years to 2.5 years to complete.

So, even though your parents can cover for your educational expenses, there is nothing wrong to get a loan approved for, let’s say, 15 to 20 Lakhs (India). This fund will be useful when applying for an F1 student visa.

A bank will issue 2 demand drafts (called as bank draft in the U.S.). That’s the case with majority of banks. The first demand draft will be issued in the name of the university and the other demand draft will be issued in your name.

  • Total Student Loan Amount = Living expense + Tuition fees

Some banks, though, issue just one demand draft (bank draft) for the entire amount you requested, so it depends on the bank’s policies.

Once you reach the U.S., it would take only a few minutes to open a bank account in your name. You then deposit the demand draft.

  • If your 1st year tuition fee = $15,000 ( University of Florida )
  • Living Expenses = $5,000 ( Your Name )

I usually prefer to carry only my first semester’s fee with me, plus those covering my living expense.

Before your next semester begins, you can ask your parents to send the next demand draft for paying your college tuition fee. This would save you interest rate for around $7,500 as per our example for 5-6 months.

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  1. If a student has already done an MS from India and now going for a second MS (USA), is there a way to shift to a PhD after first semester?

  2. i have a doubt.please get it clarify,

    i taken a loan from corporation bank for UNIVERSITY OF CENTRAL MISSOURI

    .i got visa on this university only.but now the problem is after i went to USA i will apply for another university.then how can i get transfer my loan from UCM to another university.i contacted bank manager,but he is asking me the new I20.but i will apply after i reach the US. that's why i cant get change my loan right now.please suggest me a sollution

      1. then what can i do now to go to another university without this problem.please suggest me a solution

  3. hi sir.. i've just generated interest attaining a masters degree in usa.. i'm doing my engineering in information science . So the year i might be wanting an admission is 2011. Can i know what are the things which i need to keep in mind in these two years to prepare myself for the big leap. And how i can tell my family to prepare financially. Does it help if we have our immediate family and cousins in america to get a visa or admission.

  4. i want to do my masters in united states…….how much aggregate should i have in my bachelor’s degree to get into a descent university….how much should i score in GRE and TOEFL……..and whats the process of getting BANK loan……i want a guidance.please help me…..

  5. i want to do my masters in united states…….how much aggregate should i have in my bachelor’s degree to get into a descent university….how much should i score in GRE and TOEFL……..and whats the process of getting BANK loan……i want a guidance.please help me…

  6. I found information provided here very useful …..but i have many doubts regarding edu loan etc…………… when shuld i apply for edu loan shuld i apply after getting my i20 or just after mailing my documents……….what are requirements for applying loan…

  7. i felt very happy by seeing the information provided by u sir but still i have got many doubts to present before u sir.i done my gre test and i scored very low score that is 900,but some of my friends are saying that to retake the test and some of them are saying that no need u may get university with that score also but they are saying that where the problem is at visa point that visa officer may reject ur application by seeing ur score.My academics are with an aggregate of 60% and i had two backlogs . I am planning to write my toefl test in december on 21 of that month sir please suggest that whether to retake the gre test or not and suggest me the universities to apply for my score. Please sir tell me that which is the right time to apply for universities and get i20's and tell me about living expenses there and about part times. sir please help me in this way.

  8. i got admission in FIU:

    ms – finance. (1 yr program).

    fees is roughly $ 25000.

    how much bank balance should i show and bank loan ?

  9. @ 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.

  10. 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???

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