Sushil Kapoor is looking downcast during our Zoom call. In Philadelphia–where the 27-year-old works for an analytics firm– it’s a balmy 24°C day. Yet Sushil sounds like he’s in the clutches of a bleak Alaskan winter. In 2017, Sushil took a rather hefty ₹35lakhs education loan for studies abroad (MS in Comp Sci at Purdue University).
Now, 2 years after having graduated, and in spite of having a decent job, a chunk of Sushil’s salary disappears as loan settlement. He can only afford a one-room studio apartment.
Sushil is not alone. There are thousands of Indian students in their late twenties with the same predicament.
Sushil will probably pay off his loan by the end of the 15 year payback period, but he’d have lost lakhs in avoidable interest payments. That’s not the worst life, but it could have been way better.
How to negotiate the best education loan for studies abroad so you don’t fall into a debt trap like Sushil? Read on.
In this guide, we’ll answer:
- Why should you negotiate like a Fortune 500 CEO for every half percentage of loan interest rate?
- Why shouldn’t you accept the obsolete system of education loans?
- Why is it not okay for banks to take weeks to process your loan application?
- How can you secure your sensitive information from misuse?
- How does FundRight help you crack your best loan for international education?
How to crack your best education loan for studies abroad?
1. Negotiate as if your life depends on the rate of interest
Perhaps you believe you’ll get your education loan for 10% interest. That’s not the worst, if not the best.
Don’t let percentages fool you.
Your education loan is likely to run into tens of lakhs. Even half a percentage point matters.
- For every 50 basis point difference on an ₹10 lakhs student loan for studies abroad, you are paying ₹ 5,000 more every year. Over a decade that is ₹50,000.
- Think of a ₹22 lakh loan with a 300 basis point difference in education loan interest rate. The payout is ₹6.6 lakhs more—about 30% of the principal.
Thankfully right now, education loans for abroad are affordable because Reserve Bank lending rates are low.
But don’t bank on it. As the economy shifts into high gear post-Covid and averages 9% growth, there will be inflation and rates will rise again to make lending costlier.
The FundRight Advantage
On FundRight, you begin by creating your profile. In this, you detail your foreign education plans and funding requirements. Then, public and private lenders bid for your loan.
Someone needs your business more than the others. That’s where you’ll save anything between 2% and 5% of the interest rate. And no hidden costs are tucked away in the fine print.
If your grades are consistently high, even an education loan for studies abroad without collateral is within your grasp. Factor in the opportunity cost of your collateral; don’t waste a seed when it can flourish into fruit.
2. Don’t settle for the vanilla loan product
The lending market in India is a shape-shifting labyrinth.
Credit cards were once the exclusive preserve of those who banked with StanChart and Citi. Today, you buy your gizmos on interest-free EMIs. Then you use postpaid credit money to buy over-sweet (and overpriced) cappuccinos at the neighborhood cafe.
Strangely, education loans are still stuck in the 90s. Obsolete, inefficient, and opaque education loan processes have prevailed. Until now.
The FundRight Advantage
If you were to request loan quotes from, let’s say, 10 banks, you’d lose your sanity.
FundRight eliminates this hassle.
We provide access to over 13 lenders (more added every month). Who are these lenders? Banks, NBFCs, and international lenders looking to invest in education loans for studies abroad. One profile, visible to all lenders, so that you don’t go crazy answering the same boring questions on half a dozen calls a day.
3. Expect quick responses; as quick as 2 days
Banks do not approve foreign education loan requests immediately. They ponder over applications of study loans for abroad education.
And then they ask questions; lots of them. Like…
- Who will be the co-signer?
- What assets do they have?
- How do we know you will not go abroad and default?
- What sort of salaries do recruiters pay to students they hire from this university?
- Are any of your friends looking for a loan too?
Most educational loans are approved at the branch level. The branch manager would rather lose a customer than risk adding non-performing assets to the balance sheet. The result is a scary rejection rate, almost extortionate interest rates, and inflexible repayment terms.
The FundRight Advantage
You get a response in as little as 2 days. This is no joke. In 2 days, you can secure your education loan for studies abroad. Your local bank branch won’t even learn to pronounce your name correctly in such a short timeframe.
4. Protect your sensitive information from prying eyes
As it is, the education loan process isn’t customer friendly. Surely, you shouldn’t have to reveal unneeded financial information. Surely, your information mustn’t be used for any purpose other than what it was acquired for. Does this happen?
The secret pleasure of the banking industry is cold calling. Once they have your details—credit report, income, assets, and so forth they would go on making unsolicited calls for selling home and car loans.
It is annoying and subscribing to the Do Not Disturb list does nothing to prevent their solicitation. Of course, your inbox will be stuffed with spam emails.
The FundRight Advantage
On FundRight, your profile remains anonymous to lenders. They don’t need, and can’t access your sensitive information on FundRight. All they see is the information they need to propose a loan offer. Nothing more, nothing less. Neither will FundRight nor will any of our lenders ever access or use your data for any purpose other than connecting you to your best education loan.
5. Expect unbiased advice
Loans are complex financial products. The paperwork can run into a binder full of pages. The fine print can be astonishingly complex.
Most recipients are so stressed about receiving an education loan for studies abroad that when they finally get one, they are too exhausted to read the T and C carefully.
That’s why they get slapped with penalties, fines, and excess interest right, left, and center.
Is it unethical? Maybe. But after all, it was all there, but they never bothered to read it.
Extrapolate it to five lenders.
- Are you going to read two dozen pages of legalese?
- How are you going to compare them without an expert lawyer by your side?
- Besides, don’t you have to worry about acing the scholarship essay or getting an F-1 visa?
The FundRight Advantage
When you receive loan offers from any lender on FundRight, you can consult our team of financial and education advisors. They’ll break down the loan terms, help you compare offers, and assist you in cracking your best loan for studies abroad.
What else do you get with FundRight?
A lot.
1. Lenders who understand the modern student’s expectations
Most lenders have a blinkered view that would put a horse to shame. They’re familiar with a few prestigious universities (out of 1000s). And they deprioritize applications for study loans for other universities.
- USC, NJIT, Columbia University—you are sure to get a loan.
- Brown and Northwestern—yes, but with a bit of grimace.
- Tulane—goodbye and see you next time.
Yet Tulane in New Orleans has been alma mater to 155 Fulbright scholars, 17 Rhodes Scholars, 23 Marshall Scholars, and two Nobel Laureates in medicine.
On FundRight, your profile is evaluated purely on merit. It’s not viewed through the blurred lenses of outdated local bank branch managers.
2. A dashboard that saves you hours
You build your profile. You upload basic documents. You receive bids. You compare, select, and that’s it.
No struggling to coax idle bank officials to hasten up their luncheon.
No toiling in serpentine queues.
No tiresome photocopying and printing routines.
No creating profiles on e-banking channels of major banks.
A single, modern, user-friendly dashboard on FundRight, that’s it.
3. A system that trusts data, and nothing else
A dozen expensive international universities, an army of ‘education counselors’ (in plain English–commission agents), and a network of myopic lenders can rig the system.
We want to break this stranglehold and make education truly democratic. The FundRight process is institution agnostic, bank-agnostic, and immune to the intrigues of education counselors. This is your safe space where you can and will crack your best loan for studying abroad.
4. Lending solutions for short term courses
Banks do not cover the cost of short-term courses (duration less than a year).
Maybe you have a post-grad degree in statistics from a top IIT and need to go abroad to learn more about data analytics. You have honed in on a few PG Diplomas in Data Science that last 6 months but need ₹10 lakhs to finance your education and boarding.
At FundRight, you can find loan offers for such short-term courses.
The final word on how to crack your best education loan for studies abroad
On FundRight, you’re safe. Completely safe from the nexus of commission-crazed loan agents and misleading education consultants. On FundRight, multiple lenders compete for your loan. So, you’ll get a cheaper student loan, flexible repayment terms, and unbiased education/financial counseling. FundRight is 100% free. Our goal is to wipe the fog off your spectacles as you try to make sense of your foreign education funding options in a treacherous marketplace.
