How to Use Student Loan from India

From Debjyoti  @ Save Money on Student Loan .

Banks in India, if they approved student loans will draw the dollar draft required for tuition fees in favor of the U.S. university’s name. So how can one deposit the sum in his own savings or checking account?
Secondly, do banks approve loans for living expenses, too? Or they simply approve the loan mentioned in the I-20 as tuition fees, while the cost of buying a laptop may be included?
If anybody gets full scholarship, does he or she must still apply for a student loan? Please let me know the answers. Thanks!

Cashing Out Student Loan

Banks in India don’t have standard rules, procedures and formats. In fact each branch of the very same bank follows a different set of standards and banking practices!

For example, the State Bank of India will approve student loans to an international student going to the U.S. based on the declared value in I-20. However,

• Some SBI branches will only issue one demand draft (or cashier’s check) in the name of the U.S. university
• Some branches will give 2 drafts (one for tuition fees and the other for living expenses in your name).

If the bank only gives a single cashier’s check in the name of the university, don’t argue with them. You’ll just waste your time and energy.

It is very hard to convince bank managers who think that they have all the powers in the world, while they’re only issuing that single draft.

Get enough money to cover your first semester expenses (tuition fee, living expenses, etc.) and get 300 to 500 U.S. dollars to take with you for your travel.

After reaching the university, pay the first semester fees with the demand draft. Additional fees will be will be refunded to you within 2 to 4 weeks.

The university will issue a check in your name. You can deposit that check in your bank account.

Student Loan for Living Expenses

Yes, a bank will approve a maximum amount of up to 20 Lakhs Indian Rupees ~ 40,000 USD, which can include funds for tuition fees and living expenses.

If a bank can give you 2 demand drafts (or cashier’s checks), it will be better. But as you said, some banks just don’t get the real reason behind the loans.

They tend to think students will just use that money for purposes rather than for education.

There are a few colleges and universities in America that approve student loans without a co-signer for international students. Check with your university for more details.

Student Loan and Scholarship

Depending on the type of scholarship to be awarded, you may need to get a student loan to buffer your funds.

However, it’s always better to get at least a student loan approved, if you need the loan later, you can use it for unexpected expenses.

It’s really a pain in the A** to get student loan after you go to the U.S.

In some universities, getting a scholarship will also get you in-State tuition fees so you will have to pay for the rest of the fees.

There are some types of scholarships that pay you $10,000 to $20,000. In which case, you don’t need student loan.

If you get RA/TA, that will pay you around $300 to $1,500 monthly. So based on the type of scholarship/fellowship you’ll receive, you may want to get student loan approval while still in India.