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April 4, 2023

Fine Print on your Education Loans

Importance of Fine Print on your Education Loan

Studying abroad can be a life-changing experience, providing you with unique opportunities to learn, grow, and explore new cultures.

However, the cost of tuition, living expenses, and travel can be significant, making it difficult for many students to finance their education. In such cases, education loans can be a useful tool to cover expenses.  

While it may be tempting to quickly sign the loan agreement, it is essential to read and understand the fine print in the document carefully.

This is because the terms and conditions of the loan agreement can have a significant impact on your financial future, and failing to pay attention to the details could result in unexpected costs, fees, or penalties. 

In this article, we will discuss the importance of understanding the fine print in your abroad education loan agreement and highlight some crucial things to watch out for to ensure that you make an informed decision when borrowing for your education. 

Importance of Fine Print on your Education Loan in India

1. Do you qualify to apply for a student loan? 

To determine eligibility for an education loan, one must identify banks that offer loans for the chosen course. Generally, banks don’t offer loans for short-term or vocational courses.

However, if an internationally recognized institute has accepted the application, the chances of getting a loan may increase. Extensive research should be conducted to determine the educational loan options available.

A list of institutes that provide loans for the desired course should be created. Additionally, it is important to determine whether a co-signer or collateral is needed for the loan. 

2. Can you afford to pay your bills? 

It is important to note that if the education loan amount exceeds Rs. 4 lakhs, a marginal sum must be paid to the bank.

A co-signer is required if the loan amount exceeds Rs. 5 lakhs, and collateral is necessary if it exceeds Rs. 7.5 lakhs. It is crucial to estimate expenses and keep in mind that the loan amount applied may not be the amount received.

Research should be conducted to determine if the preferred educational institution has partnerships with banks or lenders and if any concessions are available for international students. 

3. Where should you submit a loan application? 

Researching various options on the internet is the best way to find a suitable lender for a personal loan. It is crucial to compare personal loan interest rates and examine the repayment options and clauses of different banks and lending entities.

Choose a loan that meets all needs without stretching finances too thin. Additionally, it is important to investigate the expenses that these banks cover, which could include tuition fees, travel, living expenses, equipment costs, and other necessary expenses. 

4. How does the loan application procedure work? 

Applying for a loan typically involves a significant amount of documentation. Lending institutions usually require identity proof, address proof, and signature proof, among other documents, to process the loan application.

It is crucial to follow the list and instructions meticulously to ensure that all necessary documents are provided. Lending entities often offer assistance with documentation concerns if requested.

Before signing the agreement, it is important to carefully read and understand the fine print of the agreement to avoid any misunderstandings or discrepancies later on. 

5. How will the loan be repaid? 

The repayment period clause is an important component of the loan agreement with the lender. It typically provides a moratorium period before the borrower must begin making EMI payments.

This grace period allows the borrower time to secure a job before beginning repayment. In the event that the borrower is unable to find employment, some lenders may extend the pay-off period based on their relationship with the borrower.

It is advisable to discuss repayment options with the lender while applying for a personal loan. It is important to note that not all banks will defer loans, and this is typically done only under exceptional circumstances. 

Advantages of requesting a student loan 

There are several benefits to applying for an education loan, including: 

  • Financial assistance: Education loans provide financial assistance to students who may not have the means to pay for their education themselves. This enables students to pursue their academic goals without financial constraints. 
  • Competitive interest rates: Most education loans come with competitive interest rates, which are generally lower than those of personal loans or credit cards. 
  • Tax benefits: Under Section 80E of the Income Tax Act, the interest paid on an education loan is tax-deductible, which can help reduce the overall tax liability. 
  • Flexible repayment options: Education loans typically offer flexible repayment options, such as moratorium periods, longer repayment periods, and customized repayment plans. 
  • No collateral required: In many cases, education loans do not require collateral, making it easier for students to secure funding for their education. 
  • Improve credit score: Timely repayment of education loans can help students build their credit score, which can be beneficial in the long run when applying for other loans or credit. 

Applying for an education loan can be a great option for those who are looking for financial assistance to pursue their academic goals.

With competitive interest rates, flexible repayment options, tax benefits, and the potential to improve credit scores, education loans provide a valuable resource for students who need funding for their education. 

It is important to research various lenders and their loan options, carefully review the loan agreement and repayment terms, and ensure that all required documentation is provided to secure the loan.

With careful planning and execution, an education loan can be a valuable tool for students seeking to achieve their academic dreams. 

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10 ways to better plan your education abroad

10 ways to better plan your education abroad

Stressed about going abroad to study at your dream college? Wondering how to better plan your education abroad? Then, take a deep breath and let all the negativity flow out. Next, formulate a plan to go about the whole process in the most systematic way possible. There are a few intrinsic steps involved in this journey. We have made a list right here which can help you set your goals right and achieve them one at a time.   Top 10 ways to plan your education abroad 1. A Basic plan  Every journey begins with a basic course of action. Sometimes journeys appear more difficult than they are and this is often the case with education abroad. Charting out what you want to do demystifies the complications, it offers you clarity on what you must do next and how much time you have to do it. When global education is involved, usually the course of action starts with deciding which part of the world you want to study. The following points can help you form a well-structured plan before you get started.  2. Looking up universities  Once you decide which places you are interested in, the next step is to make a list of universities and colleges. Make sure to put down the names of institutions that have crossed your mind. In fact, you can prepare separate priority lists - one for your dream colleges and another for institutions that can offer your desired course or potential research supervisor. This way, through newer shortlists you can reach the final list as you do more research on each college.  3. Time management  While noting down the names of the universities and colleges, make sure to also look up their application deadlines. Knowing the deadlines for submitting applications is what will give an ultimate edge to your course of action. Now you will have an idea about the approximate number of days you have in your hands to prep yourself. Usually, the date for submission of applications comes under the same month. Not knowing the deadlines is what creates all the stress and confusion. But once you are aware of them, you can be confident and focus on making optimum use of it in gathering resources, and money and developing your skills.   4. Savings  Going abroad is a costly affair. Knowing how much time you have on your hands also lets you calculate how much money you can save. The income-expenditure ratio also becomes important in deciding how much money you can put away as savings. Start saving as soon as you can. Even if you are not sure about going abroad for your higher education, it is still advisable to put away money in general for education. On deciding to pursue a global education, make note of the tuition fee, cost of living, and other miscellaneous expenses that might be incurred during your stay there. This gives you clarity on much you will need to save.  5. Investment  Be it education or any other significant event in your life, investing is always an improvement upon saving money. Savings do not generate more wealth, investments do. You can look up different mutual fund schemes to know which one will be the best for you. Fixed deposits have a certain rate of interest, but mutual fund schemes usually offer more than that. You are also advised to start investing in foreign exchange stocks like US stocks to make up for the depreciating value of the Indian currency and the subsequent rise in the cost of pursuing education abroad.   6. Building Credit  Another financial aspect that is quite understated is the importance of building credit. Building and maintaining a good credit score can go a long way in availing you of the best deals in loans with negotiable rates of interest. It is also crucial to start young and early, for example, with education loans or simply with credit cards. When the time comes to go abroad, your impressive credit score will make you qualified for the student loan that can support your global education.    7. Scholarships  An important thing you are required to look up while checking out different institutions is the scholarships that apply to you. In a lot of cases, deserving candidates can avail themselves of different scholarships that pay their tuition fee or at least a considerable part of it. In the case of research, you might enjoy deductions on the tuition fee from the institution itself, alongside receiving a stipend. Read up thoroughly about these international scholarships and the criteria or qualifications required to avail of them.  8. Building Contacts  The process of building contacts is something you should ideally get started with while you are in the stage of planning the basic course of action. Taking the advice of peers or seniors who have already been through this process can offer perspective and useful information to ease up the journey for you. Later, you might have to build contacts with the faculty member(s) of certain institutions that you are aiming to get into. This is usually the case for research scholars and falls under the application procedure.  9. Skill Development  Skill Development takes into account prepping for the final application submission as well as becoming sharper at the subject you are going to pursue. Deciding to pursue global education is sometimes synonymous with entering the tough competition. Make sure you are doing your best in presenting yourself to the world as a deserving candidate. Skill development also takes into account clearing the examinations that are often recommended or mandated by some institutions as proof of your worthiness. These include SAT, GMAT, GRE, TOEFL, IELTS, and so on.    10. Preparing for Applications & Interviews  Last comes the main procedure - that of submitting applications and attending interviews. As scary as it sounds, once you are done with all of the above, you will find yourself to be more at peace and confident to brave it all. Institutions might require you to submit essays or answer questions alongside the submission of the SOP and the main application. There might be interviews on a group or individual basis. Find out about these things beforehand so that you can be well-prepared when the time comes.    Conclusion The correct way to simplify a complicated procedure is to break it down into small parts and set short-term goals that make it look doable. The thought of pursuing global education can make you anxious at first but with the right plan, you can ace it.  EduFund is your partner through and through, whether it is guidance that you need or student loans, we're here for you. FAQs How can I make my application better for studying abroad? Start early. Be honest with your details, especially with your SOP. Show your involvement in extra-curricular activities, community service, and work experience. Add letters of recommendation from your teachers, counselors, employers, etc. How do I motivate myself to work on a better plan for education abroad? You can motivate yourself by constantly reminding yourself of the great educational and career opportunities that await you after you complete your studies. You'll have a whole new experience of living in a different country, miles away from home. You'll be able to learn great things about different cultures, share your culture with others, make new friends, learn a new language, and find great employment opportunities. What skills do I need to develop to study abroad? In order to not only get admission abroad but also successfully manage to thrive there, you must develop the following skills - Independence, adaptability, communication skills, cultural awareness, budgeting, time-management, networking, flexibility, etc.
11 reasons to study in Australia

11 reasons to study in Australia

Australia, the land of incredible opportunities and job scopes is known for its top-class educational facilities. It is an excellent choice for international students who want to study abroad and gain vocational and technical education innovatively and effectively. There are several reasons why children who study in Australia have found the experience academically and emotionally rewarding. Let us go through some of them. Important reasons to study in Australia 1. World-class institutions Out of the top 100 global universities, the best-known six, including the University of Sydney and the University of Melbourne, are located in Australia. The world-class institutions offer international standards of education in fields like technology, finance, medicine, accounting, engineering, etc. The technologically-advanced classrooms, impeccable lectures, outstanding training facilities, and extensive support services are a magnet for international students who aspire to study abroad.  2. 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Scholarships Lots of students want to study abroad but are unable to do as it is an expensive affair. In Australia, almost 300 million dollars worth of student scholarships are for grabs every year. If your child is one of the lucky ones who has managed to win a scholarship for higher education then they are up for a winning ride.  The Edufund App has a dedicated team of experts who provide support for children’s overseas education. They counsel students and their parents so that it becomes possible to apply for scholarships and make their dreams true.  6. Advanced research opportunities  Australia offers advanced country-based research opportunities to learners who want to boost their careers with help of research and development. Several universities spend a significant budget on R&D to ensure progress in different fields. They also offer fellowships to interested students to undertake research in their area of choice.   7. Easy access to student visas One of the major reasons why students prefer to study in Australia is because of the easy accessibility to a student visa. The process is simple and quick for applicants who have their health insurance and finances in order.  8. Gain work experience and earning opportunities along with studies Students in Australia are allowed to work 40 hours every two weeks or 20 hours every week during the semester and full-time during the semester break. This is a golden opportunity for students who want to gain work experience and earning opportunities along with their studies.  The minimum wage for part-time jobs is 17 dollars per hour and this earning opportunity is a blessing in disguise for students struggling to meet their financial needs.  8. Multi-cultural society Australia boasts of a multicultural society that promotes cultural diversity. 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The diverse curriculum empowers students with the necessary skills to face challenges in the outside world and gain employment opportunities.  Conclusion Australia has proved itself as one of the most welcoming education providers in the global arena. International students who study in Australia are attracted because of the interactive learning environment, globally-acclaimed universities, affordable educational programs, and scenic attractions. Moreover, the country is known to open new doors of opportunities that promote personal and professional growth. Consult an expert advisor to get the right plan TALK TO AN EXPERT
15 gadgets to make student life easier

15 gadgets to make student life easier

Education can be a costly affair not only in terms of tuition fees but also the add-ons like different gadgets for students only add to your cost of living alone. Electronic gadgets form an important part of such expenses but there are some gadgets to make your student's life easier. Being informed about which gadgets serve your educational needs can be helpful in deciding if you need a laptop or a smartphone. In the long run, you don’t want to make investments you might regret later. You also want to take note of the following gadgets as expenses to consider while applying for an education loan.  Gadgets for students 1. Smartphone or Tablet  Gone are the times when a mobile phone was solely seen as a source of distraction for students. These days a smartphone is one of the primary requirements. 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Here are some gadgets for students that make their lives easier: Smartphone or Tablet Laptop or PC External Hard drive Noise Cancellation Headphones Printer Electric Kettle & Emergency Lamp Kindle External Batteries & Portable Chargers Rocketbook Everlast smart reusable notebook Anti-theft laptop bag External hard drive Laptop tray with fans Folding Bluetooth keyboard Wi-Fi range extender Portable phone charger Why are gadgets useful for students? Gadgets serve many purposes; they make our lives easier, help us stay connected with the world, and make significant life decisions. From helping with homework to traveling the world, gadgets are useful, for students for education, learning, and life experiences. What are some fun gadgets? Here are some fun gadgets for students: FitbitSmartphone or TabletLaptop or PCNoise Cancellation Headphones Conclusion Choosing the correct devices to make your student's life easier should not be a taxing chore. Make sure to devote time to saving up beforehand for each investment. Having funds dedicated to such purchases and knowing what you should purchase can make your student's life not only easier but also fulfilling. Consult an expert advisor to get the right plan TALK TO AN EXPERT
4 essential tips on investing in your child's education

4 essential tips on investing in your child's education

Life becomes easier and more manageable with planning. A very important part of a happy and balanced life is managing your finances well. This responsibility becomes manifold if you have a family to provide for. Prioritizing the prior planning of your child’s college education can make your retirement life effortless and stress-free. Put away savings to preserve wealth. Invest money to generate more wealth. At the end of the day, gaining that fine balance between your savings, investments, and spending habits is what will secure a beautiful future for you as well as your family. Here are some pro tips on how to invest and save for your children’s college education. 1. When to start? Timing is everything. The logic is simple - the earlier you start, the more wealth you can generate and accumulate. You may begin as early as the family planning stage itself. Even if you do not have a clear sight of the stream of academics your child might pursue later in life, it does not hurt to put away money. As your child grows up, they might decide upon what line of academics they want depending on their career goals. Your savings will come in handy in reassuring your child that you are perfectly prepared to back them in realizing their dreams as there will already be a considerable amount of funds they can count on. 2. Compartmentalise your savings The habit of saving money regularly is one of the healthiest habits one can inculcate. But mastering the art of saving requires self-regulation and a sense of organization. Putting away a bulk of money indiscriminately is not the most effective way of saving. Keep track of your expenses and your income; device upon an amount you can afford to put away as savings. Make a list of all the things you need to save for - emergencies, education, health, housing, and so on. Divide your savings accordingly. The act of compartmentalizing savings can also be effective in regulating your spending habits. You can also inculcate this healthy habit in your child from an early age by encouraging them to save money from their monthly allowances. 3. Consider different investment options Investing is always an improvement upon saving because investments can generate new wealth. Thus, it is not enough to just put away money as savings; you also need to allocate funds to certain investments that suit your monetary goals. There are different kinds of investment channels you can opt for. Some of us prefer fixed or recurring deposits while others want to generate more returns and go for mutual funds. Mutual funds can be of different types depending on the factors like the amount of risk, duration, return rates, etc. The mode of payment can also vary. For example, you can go for a one-time investment or you can choose monthly SIPs. Be well aware of all kinds of investment plans available so that you can choose the best one for yourself. 4. Invest in a global education Your savings and money made from investments will be especially useful when you send your child abroad to pursue a college education. Even if you are not sure about the possibility of global education in the future, it is always advisable to remain prepared for the same. Simply saving money is not enough. Investing is a better idea and in the case of global education, it can be beneficial to invest in foreign stocks. This is because the value of the Indian currency is forecasted to fall in comparison to other stable currencies in the world. This means that the cost of living and studying abroad will be way higher than the cost of living and studying in a new city within India. Once you set your financial goals, find out about investment schemes with international equity funds from countries like the US, so that you can make money in a more stable currency. Conclusion There can be several investment goals relating to different parts of your life like yourself, your spouse, relatives, housing and accommodation, health, gadgets, and emergencies. Mixing these up will only cause chaos and distress. Hence, it is important to think separately about saving for your children’s college education and indulge in smart investments. Consult an expert advisor to get the right plan TALK TO AN EXPERT
4 Reasons why you should have an EduFund

4 Reasons why you should have an EduFund

Why should you have an education fund dedicated to your child’s college education? Don’t you already have to worry about saving up for your home, your retirement, and any other emergency that may arise? With all these goals it might look daunting to have another fund for education as well. Is it such a big deal? Well yes, It is a very big deal! Here are the top 4 reasons why you need to start saving up for education, as soon as you can, even if your child is just 4 years old! 1. The cost of education will most likely jump (a lot!) education-cost-jump In India, the cost of education is increasing at a rate far higher than the inflation rate. 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For e.g. Stanford’s tuition fee for its MBA program is USD 140000/year and which is more than one crore, considering the currency rates that are prevalent now. Even if you factor in an inflation rate of just 10%, it's going to cost double the amount to send your child to college, say 15 years later, than what it costs today. Whichever destination you might choose to send your child to college, the money that you are going to spend, just on tuition fees, will be very high. 2. To avoid dipping into your retirement corpus! retirement-corpus It is more prudent to maintain separate funds for your savings and your child’s education. ‍This is due to the simple reason that no one is going to give you a loan to take care of your expenses post-retirement. While your child may get a loan that will fund his/ her education expenses, you need to make sure that you and your spouse, are not dependent on one post your retirement. Hence, EduFund comes to the rescue! 3. Let your child be debt-free! Education loans are easily available from banks and other financial institutions and are attractive to many students who are not able to afford higher education – especially abroad. But then again, education loans are termed at extremely high-interest rates, not to mention the collaterals attached to them. In this scenario, having an education fund will help. Your child will not start her career with a debt burden hanging over her choice of job. And with the growing uncertainty in jobs due to the current global economic slowdown, there is no job security that assures steady income to pay off an education loan. 4. The Competition is just going to increase! The competition to get into the best colleges, foreign or Indian, has always been high. We all know the importance of studying well to get into the best colleges. But the increasing population and increasing enrolment in higher education have ensured that what was possible to achieve with 80% marks in the year 2000, now requires at least 95% marks. And, there are more people competing for the same number of seats. So, getting into one’s college of choice on merit alone or with a scholarship is going to be much more difficult than it was. In fact, parents are now having to prepare to handle competition even for KG admissions for toddlers. Many of them start planning right at child-birth on which school their child should go to. So, start planning now! When you start early, you have the freedom of choice in college as you don’t have to worry about the cost of college. Having a corpus fund for education to draw from when the time arises is imperative to ensure a good education and a good career for your child. And even if your child’s choice of career changes as time passes, you can adapt and be ready with the funds, when required. FAQs What is EduFund? EduFund is an investment app dedicated to helping Indian parents save, invest and plan for their child's education needs. How can EduFund help you? EduFund can help you invest, save and plan for your child's education needs. It allows you to customize your plan, and invest in tools like mutual funds, US stocks, ETFs, and digital gold to diversify your investments. It sets long-term and short-term goals for parents and children to save up time and help them achieve their goals. EduFund also helps you with education loans and connects you with the best loan partners in India and USA. How can you set up an account with EduFund? You can download the App from Play Store or apple store and set up your account free of cost. All you need is a bank account, an Aadhar, and a pan card to open your account and start investing in mutual funds. Conclusion We live in a world that is marred with competition, whether it's getting into a good college, or choosing the right investment instrument, being prepared for the future equips you to handle things better. The stability of having a corpus and not being dependent on an education loan is a reassuring move for your child to choose his/ her dream college. An EduFund may seem a far-off thing today, but it is a necessity for the future. Plan, invest, and educate!
4 W’s of Balanced Advantage Funds

4 W’s of Balanced Advantage Funds

What is Balanced Advantage Fund? A balanced advantage fund is a fund that can invest 0-100% in the equity market or 0-100% in the debt market dynamically as per the prevailing market condition. For example - If a fund manager finds that the price of the equity market has gone up, he will tilt the portfolio more towards the debt market. Likewise, if the equity market trades at a discount, then the fund manager can tilt/shift the portfolio towards the equity market.  The valuation is the internal process of the fund. Based on valuation, the fund manager can take the call. This way, the fund manager can take the opportunity and change the asset allocation. The fund manager can go aggressive in the equity market or can also decide to play conservatively to reduce the portfolio's volatility. The aim is to minimize the portfolio's downside risk and maximize the returns.  Who should invest? Investors who are looking for long-term wealth creation. Investors who are not comfortable with the market volatility. Investors who do not want to face high volatility and looking for equity-like returns. Investors who are unsure which type of fund they should invest in, whether in the equity or debt-oriented fund. Risk-averse equity investors with an investment horizon of more than three years. Additional read: Financial mistakes to avoid Why should you invest? A balanced advantage fund is a dynamically rebalancing fund between two asset classes, i.e. equity and debt. It has the complete flexibility of rebalancing from 0-100% in both asset classes. It provides you with better risk-adjusted returns. It manages the equity market volatility and provides stability in the portfolio by diversifying the portfolio into the debt market. It offers you equity-like returns, which help your portfolio to grow at a much faster rate than debt funds and also helps you to beat inflation. Minimizes the downside risk and provides scope for growth by investing in the equity market. When should you invest? When the volatility in the equity market increases and you do not want to have such high exposure to the prevailing volatility. When you want equity-like returns but do not want to face high liquidity. First-time mutual fund investor looking for long-term wealth creation. Conclusion Try to allocate some portion of your portfolio towards a balanced advantage fund if you want to reduce the portfolio's volatility. A balanced advantage fund is like all season fund. Consult an expert advisor to get the right plan TALK TO AN EXPERT
5 degrees for your child that can cost up to 1 crore 

5 degrees for your child that can cost up to 1 crore 

The cost of education increases every year but this cost is not uniform; there are some degrees that cost more than others. Some expensive degrees like MBBS, MBA, Psychology, Law, and Dental cost up to a crore; this includes tuition costs, living expenses as well as miscellaneous costs. This is because of the popularity, high competition, limited seats, university ranking and location as well as the tremendous ROI attached to the courses. Pursuing these degrees from top-tier universities and countries like the US or the UK can cost you almost a crore of rupees!   So how should you as parents plan to fund these expensive degrees? Here are a few financial planning tips that will help you take charge of your funds and help your child pursue her dream career without any stress! Tip 1. Start early! While a corpus of Rs. 1 Cr. can sound daunting, it is achievable if you have 15 to 18 years in hand. That’s right. If you have big professional career dreams for your children, you must start saving for their education as soon as they are born. Some couples start even before the child arrives. After all, the earlier you start, the easier it will be to put the funds together.   Tip 2. Define your corpus  Always work on your goals on the higher side. The cost of education is going up by almost 10-12% a year, so allow for these growth rates, and for fluctuations in currency rates. It is difficult to predict international situations two decades from now, so you must prepare for the worst, and work with higher numbers. This will save you from having to dip into your retirement savings at the time of your child’s education.   Tip 3. Do the number crunching  This is part that most people who are uncomfortable with finance dislike. Once you have fixed the financial goal, break it down into years and months. That is the only way you will be able to build that corpus. Define how much money you will need and explore the high returns options like equities that can over time give you up to 15% returns. Also, understand the risks involved. Be warned: stay away from get-rich-quick schemes, most people lose even their capital in such experiments.   Source: pixabay Tip 4: Be consistent  Remember, Rome was not built in a day. It took centuries. Luckily, you will have to work consistently only for a couple of decades. Just set up your SIPs in mutual funds, and equities, and start putting money away in Provident Fund and Bonds. While the returns on the latter are lower, these investments add stability to your portfolio. And do it month after month for the entire duration. Do not stop, do not opt out, and do not withdraw these funds for unplanned expenses like a foreign trip or a big-ticket vehicle. Stay focussed on your corpus goal.   Tip 5.Go for high-return investments  The longer your investment horizon, the greater risk appetite you can have. You can consider a 65/35 mix or even a 70/30 mix with a higher percentage being invested in equities and other high-return instruments. Do keep in mind that higher returns are usually coupled with high risk, and you must regularly balance your portfolio to avoid losing your capital.   Tip 6. Monitor your investments  All investments must be regularly monitored. Anything that is under-performing, you must get rid of and replace with a better-performing option. But don’t try to time the market, keep your parameters clearly defined when you start your investments. This will keep you from making unnecessary mistakes in the market.   Source: pixabay Tip 7. Seek help with your investments   As the time for your child’s college admission comes closer, there are a lot of decisions you have to make to secure your child’s funds. Like turning your high-risk, high-return investment into safer options to protect your investments and corpus from any sudden market downturns, closer to the time of admission. This is an important aspect to consider as you cannot shift the time of admission. Though before taking any of these decisions, it is wise to consult a financial planner to safeguard your interests.  What we have shared here is a broad roadmap that will enable you to build the Rs. 1 Cr. corpus and fund any of the 5 expensive degrees your child may choose to pursue. While doing your initial calculations, also keep in mind that most of these courses also have entrance exams.   Preparation for these exams can start 2-3 years in advance and the coaching for the same is also expensive. You must consider having access to your funds well in time, to avoid financial stress at the last minute.   With planning, discipline, and consistency, you will be able to achieve almost any financial goal that you set for yourself. The key is to get your plans down on paper/on the computer and start working on them. So go ahead and start planning today! Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT
5 financial things to consider before child planning.

5 financial things to consider before child planning.

Both life and wallet will never be the same once you decide to have a baby. No event in your life will signify financial change quite the way this one does, from the first prenatal appointment to the day of their college graduation (and beyond). 5 financial things to consider before child planning 1. Create a budget Before you start child planning, you need to have a budget in place. You and your partner may need to create a realistic budget based on your expenses and your streams of income. Once you know how much you can afford to spend, you will be able to tackle the costs easily. A new child is a new family member that needs space! So if you need extra space once the baby is born, figure out what kind of home you can afford, whether it's a slightly larger apartment, a warm cottage, or a pricey house. Will you want the latest baby things or your sister’s passed-on ones? Think about what sort of child care would you require and get candid with your expenses before you start making any purchases. 2. Costs associated with birth As new parents, you need prenatal vitamins, alternative therapies, labor and delivery alternatives, and screening tests. Give yourself enough time to change or upgrade insurance plans should you need more comprehensive coverage. Good health insurance is vital in this economy. Hospital bills, medical fees, and maternity costs can be high. According to estimates from the industry, a straightforward delivery could cost between Rs 50,000 and Rs 70,000, but a private specialty hospital could charge up to Rs 2-3 lakh. A cesarean delivery could result in a cost rise of up to Rs 4-5 lakh. Before having a kid, you should make financial arrangements for the costs associated with the delivery and child care. 3. Consider maternity leave The vast majority of Indian employees are not entitled to paid family leave. If the mother is employed, you might need to think about taking a lengthier (unpaid) maternity leave or a sabbatical for a year or two. This can be a huge financial loss for families that rely on both streams of income. Paid parental leave is not always an option. Find out if your workplace offers paid leave for new parents and if there are any policies in your favor that you can utilize. Determine the number of weeks covered and the proportion of your salary that is used. Do you have to use your sick and vacation days first? If you don't have access to paid time off or you're going to take more unpaid time off, you might want to cut costs or rely on your savings. Additional read: Money management tips for homemakers 4. Purchase life and health insurance You'll want your child to be stable financially if something were to happen to you or your partner. A life insurance policy can assist pay for things like child care, housekeeping, cooking, and more. Purchasing maternity insurance is the first action you can take to cover maternity costs. When purchasing health insurance, (even for a couple), it is important to confirm that the policy includes coverage for maternity costs and, if applicable, any applicable waiting periods. Additionally, by paying a larger rate, you might add pregnancy coverage to a current insurance policy. Buying health insurance is most important when considering having a child. Get your health covered in your plan so that you are not financially burdened in case of a health emergency. 5. Plan for child’s education Just like the prices of lemons and oranges are growing, the cost of education is skyrocketing. Saving for your child’s college is a necessity. When it comes to saving money for college, time and compound interest are your best friends. Even while inflation is an unavoidable fact, keep in mind that education inflation is far higher. Utilizing the force of compounding is one approach to combat this, but it will only be effective if you have a long-term strategy in place. You indeed have no idea what career path your child will take, but you still need to put aside a portion of capital that can be utilized when the time comes. Right now, you need to think about the type of education you would like to offer because the practical costs of studying engineering in India vs the US would be very different. From giving birth to seeing them off to college, watching your child grow and thrive is every parent’s dream! So give those dreams wings by planning ahead and investing for their bright future!  Consult an expert advisor to get the right plan TALK TO AN EXPERT
5 Pro tips on creating your child's education fund

5 Pro tips on creating your child's education fund

Everyone speaks about the rewards of preparing early for education funds and securing them as soon as possible. What they forget to explain is how to reach that goal. Fear not, for we have prepared a list of things you might want to tick off if you want to secure your child’s education.  1. Choosing the right platform is important There are a number of investment platforms available for investors. As an investor with a goal in mind (the education fund for your child), it is important to choose a platform that is built for that purpose or has certain advantages in the pursuit of your goal. There are two great advantages of choosing a goal-specific platform - one, you separate your investments in a way that you know how much amount is set aside for that particular goal every month, and second, you get the added goal-related benefits that the platform could offer. In the case of EduFund, a platform built for parents to save for their children's education fund, you have added advantages like readily available education loans if you fall short, or free counseling if your child needs it. 2. Investing in the right mutual funds  Once you decide to invest in mutual funds to achieve higher returns than Fixed Deposits, you also need to do your research to find which investment schemes are best suited for you. Many factors play crucial roles in this procedure. For example, one of the first things you need to consider is the balance between your monetary goals and the level to which these will be fulfilled by the fund returns and the risk associated.  Time is another important factor that will shape your decision in this matter. You also need to consider what exactly you want out of your investment whether it is tax reductions or high returns with high risks or more stabilized returns with low risks. To indulge in smart investments, stay aware of the best investment schemes currently trending in the stock market. 3. Investing in international stocks Parents who like to stay alert about the current trends related to the education system and finances must be well aware of the phenomenon called education inflation. This is what makes a global education exponentially more expensive than one attained within India.  The value of the Indian Rupee has depreciated over the years against foreign currencies like the American dollar. This means that the cost of a course pursued in a foreign land like the US or the UK will be tenfold compared to the same course pursued in this country. The cost of living will be equally high overseas. A smart way to deal with this problem is to invest in international equity funds. This means higher returns because if you invest in US stocks, you will be earning in dollars, not rupees. Moreover, if your investments in Indian stocks get affected by market fluctuations, you can still depend upon your foreign stock investments which will remain relatively more stable.  4. Consider the availability of education loans  Sometimes your life savings and your investment returns are not enough to fund your child’s education. Do not worry. Education loans can take care of your child’s aspirations in such situations. Even if you are in a position to be able to afford your kid’s dream college, student loans are still a healthy way to teach your kid the value of money and how to build credit.   Creditworthiness is a virtue that will financially discipline your child so that they can take monetary decisions in your absence. It will also ensure that they can take future loans as part of their education fund at low-interest rates. Only loans exceeding a very high amount of money require collateral or a security deposit, which means you can easily avail of student loans.  5. The right guidance for your children Career and academic counseling sessions are crucial for your kid if they are going through a transition phase in their lives. As their primary caregiver, you are entitled to guide their way but sometimes what might be required is professional help. You are longer required to pay for these counseling sessions. A platform like EduFund offers them the best education counseling services in India for free of cost. Let nothing stop your child from achieving their goals.  6. Expert advice to get you to your goal EduFund believes in helping you attain as much clarity on financial affairs as possible. In case of expert advice on investment, you can rely on the world-class experts from EduFund. The Edufund app provides you with all the useful tools to attain the best from your child’s education fund.  For example, it comes with a calculator that helps you calculate the education cost. This is a smart calculator developed to give you inflation-adjusted rates. This is the first step toward getting an idea of how much you will need to invest or save up as an education fund.  FAQs How do I plan my child education fund? Starting early is key to building your child's education fund. You can start saving with mutual funds, PPF, US stocks, Indian stocks, fixed deposit and much more. Before starting it is important to consult a financial advisor and figure out the cost of education before starting an SIP. Which fund is best for child education? Here are some of the best funds for your child's education fund: Axis Long-Term Equity FundSBI Equity Hybrid FundParag Parikh Flexi Cap FundAditya Birla Sun Life Tax Relief 96 Fund Growth Aditya Birla Sun Life Tax Plan-GrowthDSP BlackRock Tax Saver Fund Growth Axis Long-Term Equity Fund Growth How do you build a corpus for child education? The first step to building a corpus for child education fund is to figure out the cost using the College Cost Calculator. Knowing the financial goal you need to invest in before starting an SIP helps you remain focused and know the exact amount you need to save monthly to get started. Conclusion What seems like a mammoth task can be easily managed by diving it into smaller tasks and simplifying it. Each small step is quite crucial in itself. But once you have the checklist ready, you can be sure if not losing sight of things. DisclaimerMutual fund investments are subject to market risks. The previous performance of a fund or scheme is no guarantee of future success. Please read the offer document carefully before investing.