Dreaming of studying abroad? It’s an incredible journey with exposure to new cultures, top-notch education, and an exciting world of opportunities. But that’s not what we are going to tackle in the blog. We are here to explore and understand the not so fun part of this adventure- paying for the overseas education with a widely fluctuating local currency that seems to be intent on giving us sleepless nights.
Education loans are a lifeline for many students chasing that overseas degree. While educational loans are fairly accessible, repayments in this environment of volatility can be stress inducing. If your loan is in Indian Rupees (Rs) and tuition is in a particular international currency, say US Dollars (USD) or British Pounds (GBP), exchange rate fluctuations is enough to upend all you repayment plans. However, you can protect yourself from this, and stay ahead. Here’s how-
- Education loans 101: The basics
For most students, an education loan is the key to unlocking global education. It covers tuition, living expenses, and more. At InCred Finance, we offer secured loans up to ₹1 crore or unsecured options up to ₹20 lakh, plenty to fuel your educational dreams. But here’s the catch: while you borrow in INR, while your university bills need to be paid in a foreign currency. When the rupee fluctuates against the basket of global currencies, so does the amount you owe. Understanding this is your first step to smarter planning.
- How currency swings hit your wallet
Imagine you take a loan for a US course costing $30,000. At ₹80 to $1, that’s ₹24 lakh. But if the rupee dips to ₹85 to $1 by repayment time, that same $30,000 now costs ₹25.5 lakh. The loan amount in dollars hasn’t budged, but your INR burden just grew. That’s the tricky part of borrowing across currencies; exchange rates can quietly pile on extra costs throwing your careful financial planning into chaos.
- Why the Rupee keeps you guessing
The rupee’s value oscillates sharply to global developments whether it is oil prices, trade flows, or even economic shifts. Over time, it’s trended downward against major currencies, making loan repayments trickier for students. What feels affordable today could grow into a challenge tomorrow. That’s why factoring in this volatility is a must when you’re borrowing for your education.
Tips to Stay in Control: You don’t have to just cross your fingers and hope. Try these moves to keep exchange rates from derailing your plans:
- Earning abroad: Earning in a foreign currency can ease the pressure. Say you land a job in the US with the rate at ₹90 to $1. Your USD salary stretches further in INR, softening the loan sting. But if the rupee strengthens to ₹70 to $1, your earnings shrink in INR terms, and payments get tougher.
- Go Flexible: Look for loans with prepayment options—like ours at InCred—so you can pay the principal when rates favor you.
- Plan with a cushion: Budget for a higher rate, say ₹90 to $1 instead of ₹80. It’s a buffer against surprises.
- Cut the loan size: Scholarships or part-time gigs abroad can shrink what you borrow, dodging some of the currency chaos.
- Opt for online ease: InCred’s fully online process lets you secure 100% funding fast, giving you room to breathe when rates wobble.
The Big Picture
Exchange rates might seem like a small detail, but they can reshape your loan journey. Get a handle on them, and you’ll tackle your education abroad with confidence. At InCred, we’re all about simplifying the tough stuff so you can focus on acing your studies, not stressing over finances.
Ready to fund your global education? Explore InCred’s Education Loans today: flexible, fast, and tailored to your dreams. Apply now and take the first step toward studying abroad, worry-free!