EduFund Blogs

The education of their children remains an aspirational goal for every Indian parent. Every parent wants and strives to provide the best quality education and seeks to fulfill the dreams of their children. However, the burgeoning cost of education - both in India and abroad has been a cause of concern for parents looking for higher education for their children. While the cost of education in India has grown significantly over the past decade, the cost abroad is no better - owing to inflation in the local currency and rupee depreciation over the years. Now, since education is getting expensive, it is critical to have a defined savings plan from an early age - something that is affordable for parents to keep aside and gives a runaway to accumulate. For example, if parents start to save for their child's education immediately after the birth of the child, they would get a runway of 18 years for a bachelor's and 21-22 years for a master's. Starting early would help the power of compounding to work in your favor and help you get closer to the goal with a smaller sum too. The amount kept aside for this defined and critical goal balloons with every year's delay (see chart below).   2020 2030 Cost of Tuition Fees (Rs Lakhs) 25 49 Cost of Living (Rs Lakhs) 10 20 Total (Rs Lakhs) 35 69 Note: Inflation considered at 7% for both tuition fees and living costSource: EduFund Research Cost of delaying – SIP amount increases with every year skipped Note: A return of 12% is considered for the SIP computationSource: EduFund Research Let us now see an example of two parents - Abhishek and Sneha. The situation at hand –                                                         Objective – To send a child abroad for engineering education·      Abhishek – Looking for Education Loan @ 8%·      Sneha – Looking to invest systematically and accumulate corpus in 10 years, expecting returns of 12%   Abhishek and Sneha want to send their child abroad for engineering education when she turns 18. While Sneha believes in accumulating the amount by investing in a mutual fund every month, Abhishek feels opting for an education loan makes more sense. Both Abhishek and Sneha have a 10-year horizon where Sneha would save for the period aiming to make 12% returns annually, and Abhishek is looking to repay the loan borrowed at 8%. Let us evaluate which is a better plan - The Results Corpus required -   2020 2030 Cost of Tuition Fees (Rs Lakhs) 25 49 Cost of Living (Rs Lakhs) 10 20 Total (Rs Lakhs) 35 69 Sneha's investment plan: Systematic Investment Plan (SIP) – Rs 30799 per month for 10 years Abhishek's loan plan: Equated Monthly Instalment (EMI) – Rs 83716 per month for a time duration of 10 years What we see is to reach her goal of global Education, Sneha set aside Rs 37K through SIP to accumulate the corpus. Abhishek, meanwhile, gets instant access to the corpus but ends up paying Rs 83716 in monthly installments. Also, by the end of 10 years, he pays Rs 31 as interest making education costs rise 45%. Both Abhishek and Sneha would have to make monthly payments, but Abhishek would pay substantially more every month. Abhishek would also spend much more on the same Education than Sneha. When to use an Education Loan? Despite starting to save early for a future defined and aspirational goal, a parent may still face a shortfall in the corpus. The reasons for the shortfall can be varied. For example, one instance could be because of the change in the nature of the goal. For instance, you might have budgeted for sending your child to Singapore but may end up sending them to the US where the cost is comparatively higher. However, this possible shortfall is not an excuse but is a function of change in the plan. In such circumstances, it makes sense to fulfill the gap with an education loan. Also, it gets to avail of a loan for part cost and not the full cost. Is it possible to reduce your SIP initially and pull it up? Of course, yes, you can always go for milestone planning where you can define a start-point, specific deadline, and final goal. This method ensures you map your SIP to your pocket size, and as time passes by, you tend to increase the outlay towards the goal. Thereby following an exponential roadmap rather than a simple straight line which may not be affordable in the initial years due to multiple other expenses. To sum up, we can say the following - Based on the child's currency age, a parent can start planning for higher education. This helps in being pocket friendly and remains disciplined for a defined liability that is due to come in a few years. Dividing the goal into smaller milestones and targeting each milestone helps the parent have a roadmap to the goal. This ensures a pocket, friendly method of investing. Education loan is available on short notice; however, it should be used to fill the gap instead of dependence on the full corpus. This strategy will allow you to fund your child's education with minimal stress. FAQs How much should we save for a child's education? Education inflation has been rising at a steady rate in the past few years. Parents should be aware of the significance of saving early to be in a position to afford their child's future education costs. The cost of education varies depending on the choice of course, so it's better for parents to start saving early, so they can adjust their portfolio once they have a goal in sight.      What is the best way to save money for a child in India? It goes on without saying that mutual funds have been gaining traction over the past few decades, and the burgeoning size of the assets under management has made people think of the investment vehicle. Also, with declining or unfavorable returns on instruments such as fixed deposits, provident funds, and the like, the most lucrative option remains – mutual funds. However, not all mutual funds would be able to help you achieve your target. Thus, you need to plan as per your risk appetite so that you do not derail from the track of your defined event.  Why should parents invest early in their child's education? While the cost of education in India has grown significantly over the past decade, the cost abroad is no better – owing to inflation in the local currency and rupee depreciation over the years.   Since education is getting expensive, it is critical to have a defined savings plan from an early age – something that is affordable for parents to keep aside and gives a runaway to accumulate. For example, if parents start to save for their child's education immediately after the birth of the child, they would get a runway of 18 years for a bachelor's and 21-22 years for a master's. Starting early would help the power of compounding to work in your favor and help you get closer to the goal with a smaller sum too.   What is the best investment for a child's education?   By investing through SIPs, you will do away with the burden of timing the market as you could then avail the benefit of Rupee Cost Averaging. By investing through SIP, you tend to invest in the up-and-down markets. This helps you shy away from the volatility of the market. Additionally, you will benefit from the power of compounding, which fundamentally generates returns not only on capital but also on returns.  

With the rising demand and value of knowledge, education is getting expensive every year. The inflation in education is possibly higher than household inflation which is deterring the financial preparedness of parents for an aspirational and defined event like education. Talking of the primary school, per the data of NSSO (National Sample Survey Office), the annual expenditure on the private child has increased by a whopping 200% over the last ten years. In contrast, the higher education expense has been more amplified during the period. Thus, it is essential to have a dedicated financial strategy in place for education as one has it for retirement. It would help if you base your strategy on the basis of needs, and implement it with a sound investment portfolio so that over the long term, during your child's education (India or abroad), the cash flow doesn't become difficult in your pocket. Plan for your child's future needs 1. Know the cost The most fundamental problem for a parent is not knowing or understanding the total cost that will be incurred in his/her child's education. Given that education inflation is much higher than household inflation, it is crucial to assess the cost of education as the necessary first step. To estimate the cost, a parent should look out for an answer to the following questions - Which country do you want to study in? (for example, US, UK, Canada, etc.) What degree are you targeting – bachelors or Master's? What type of college are you targeting? (example, rank between 1-5, 5-25, etc.) Which course/discipline are you looking at? (for example, Management, Engineering, etc.) What is the tuition fees currently of the selected college? What will be the future value of the tuition fees when your child goes for education? To give a simple estimate, a post-graduate program in IIMs during 2010 was in the range of Rs 4-6 Lakhs. A decade later, the program is costing around Rs 22-25 Lakhs. The same program is likely to cost nearly a fortune a decade from now. Even if the rise in the cost is pegged at 5%, the cost increases to 40 Lakhs for your child's education at a premier university. Now, another essential cost that parents tend to miss is the cost of living. The living cost has been rising exponentially, and thus it would be useful to add to the tuition cost provided the accommodation is not likely to be provided by the university. While the dynamics of the universities may change in a decade or two from now but it is always better to be over-prepared than to be under-prepared and scout for funding options at the eleventh hour using illiquid assets such as real estate. Thus, it is advisable to add the cost of living that is likely to be incurred should your child go to another city/country for his/her bachelor' and/or Masters' degree. 2. Investing in mutual funds for a child's education It goes on without saying that mutual funds have been gaining traction over the past few decades and the burgeoning size of the assets under management has made people think of the investment vehicle. Also, with declining or unfavorable returns on instruments such as fixed deposits, provident funds, and the like, the most lucrative option remains - mutual funds. However, not all mutual funds would be able to help you achieve your target. Thus, you need to plan as per your risk appetite so that you do not derail from the track of your defined event. The following are some tips to get started Make investment your habit. Similar to how you would pay your EMI and bills on time every month, put aside a small amount every month for different goals. The method is called a systematic investment plan. A SIP works best for both - salaried and business class. Now, how do you get how much to invest? Well, it is not very complicated as you may think and neither every number will help you get there. All you need is an investment advisor who can analyze and plan your personal finance. Similar to how Doctor is for a patient, the advisor is for an investor. The advisor focuses on your income, expenses, dependents, liabilities, time horizon, goal amount, and the like to arrive at a risk profile. Based on the risk tolerance, the advisor helps you shortlist the funds that will suit your risk profile. Benefits of investing by way of SIP By investing through SIPs, you will do away with the burden of timing the market as you could then avail the benefit of Rupee Cost Averaging. By investing through SIP, you will tend to invest in the up-market and the down-market. This helps you shy away from the volatility of the market. Additionally, you will benefit from the power of compounding, which fundamentally generates returns not only on capital but returns also. How do you choose the funds for your Child's Education? Deciding to invest in mutual funds is only the first step. Selecting which fund to invest in is a broader choice to make. Hence, you must research how to invest in mutual funds, which funds have delivered remarkable historical returns over the long term, how much risk you can afford, and what your investment horizon is. The choice must be made depending upon your specific requirements of generating adequate corpus in the long term to fund your child's education. You must carefully keep a check on the following before you make your decision- Look at the time that you have to stay invested in a fund to achieve your target amount. If you have more than ten years in hand, you can consider investing fully in equities as it offers the highest growth potential. However, if you have between 5 and 10 years in hand, it might be more suitable to opt for a balance between equity and hybrid funds. Instead of investing in just a single fund, diversify your investments across at least two or three different funds. Closer to the horizon, consider shifting from equity to debt funds and lastly when you reach very close to the goal, consider capital protection as objective and not appreciation and look for safer funds such as liquid funds. When should you plan? “I made my first investment at age eleven. I was wasting my life up until then” -    Ace Investor Warren Buffet When it comes to investing, starting early is the key to ensuring that you're financially secure. For instance, if you start saving at the birth of your child, in 18 years by investing only 21K per month, you can accumulate as much as Rs 1.5 crore which should suffice for the global education of your child (assuming 12% annual returns). To sum up, the following are the key points on how to put mutual funds in the task of your child's education planning - The cost of education is rising. Thus, it is crucial to start saving at an earlier date to avoid a future financial burden. Do not mix insurance with investment - as you would have seen in multiple cases. Insurance provides risk management, whereas mutual funds provide returns. The financial strategy of investing in a mutual fund is a combination of time, risk appetite, income level, and target amount. Investing regularly helps keep the market volatility at bay and inculcates investment discipline in your savings plan. FAQs How to invest in mutual funds for child education?   Deciding to invest in mutual funds is only the first step. Selecting which fund to invest in is a broader choice to make. Hence, you must research how to invest in mutual funds, which funds have delivered remarkable historical returns over the long term, how much risk you can afford, and what your investment horizon is.   Where can I invest money in education?   It goes on without saying that mutual funds have been gaining traction over the past few decades, and the burgeoning size of the assets under management has made people think of the investment vehicle. Also, with declining or unfavorable returns on instruments such as fixed deposits, provident funds, and the like, the most lucrative option remains – mutual funds. However, not all mutual funds would be able to help you achieve your target. Thus, you need to plan as per your risk appetite so that you do not derail from the track of your defined event.  What is the best investment for kids?   By investing through SIPs, you will do away with the burden of timing the market as you could then avail the benefit of Rupee Cost Averaging. By investing through SIP, you will tend to invest in the up and down markets. This helps you shy away from the volatility of the market. Additionally, you will benefit from the power of compounding, which fundamentally generates returns not only on capital but also on returns.   Is SIP good for child education?   With the rising demand and value of knowledge, education is getting expensive yearly. Make investment your habit. Similar to how you would pay your EMI and bills on time every month, put aside a small amount every month for different goals. The method is called a systematic investment plan. A SIP works best for both – salaried and business class.   Consult an expert advisor to get the right plan TALK TO AN EXPERT

With quality education becoming expensive and costlier every year, education loans are becoming extremely popular among students. In reality, the price of attending a reputable university is already very high. An MBA that cost 13 lakhs a decade ago, would now cost almost double that. Parents who plan their child’s education in advance and want to provide them with the best opportunities possible to invest their money in mutual funds (MFs), fixed deposits (FDs), and unit-linked insurance policies (ULIPs). Amid all this, there still is a possibility of a financial shortfall. In such a situation, an education loan plays a critical role in bridging the gap between the shortfall and the necessary amount. https://www.youtube.com/watch?v=4gTQkdePOWM The rising cost of education According to Forbes, education costs are rising at double the rate of inflation. In 15 years, the cost of an MBA is expected to rise from Rs 2.5 lakh to Rs 20 lakh. So, if a couple saves Rs 2,500 per month for 15 years at a rate of 12%, they would have saved about Rs 12.5 lakhs, ultimately needing some more funds if their child decides to pursue an MBA. Now, you must have some questions on your mind regarding the intricacies of availing of an education loan. We have tried to answer a few commonly asked questions to enhance your understanding. 1. Who can apply for a student loan? The primary creditor is a student. A co-applicant may be a parent, partner, or sibling. 2. What is covered by a student loan? It includes the basic course fee and other costs such as accommodation, exam fees, equipment, and other miscellaneous expenses. 3. Who can avail of a student loan? It is available to students who wish to study in India or further their education outside the country. The overall sum available for studies in India and abroad differs from one bank to the next. 4. For what courses can the loan be availed? It is available as a full-time, part-time, or vocational course leading to graduation or post-graduation in engineering, management, medicine, hotel management, architecture, and other fields. 5. What are the eligibility criteria and documentation requirements? To be eligible for the loan, one must be an Indian citizen who has been accepted into a college or university that is recognized by a competent authority in India or abroad. The applicant must have completed his senior high school education.Some banks can provide a loan even before a student has been accepted to a university. The Reserve Bank of India (RBI) guidelines state that there are no upper age limits, but some banks may impose them. Additional documents such as the institution's admission letter, fee structure, and Class X, XII, and graduation (if applicable) mark sheets are required by the banks. The co-applicants income records, such as salary slips or income-tax returns (ITR), are also needed. 6. Is collateral required for financing the loan? Depending on the amount, banks will fund up to 100% of the loan. There is currently no margin money required for loans up to Rs 4 lakh. To study in India, the applicant must contribute 5% of the necessary funds. The needed margin money for international studies, on the other hand, rises to 15%. Banks may also need collateral for loans exceeding Rs 7.5 lakh. For loans up to Rs 4 lakh, financial institutions currently do not need any collateral or third-party guarantee. A third-party guarantee is required for loans between Rs 4 lakh and Rs 7.5 lakh. For loans exceeding Rs 7.5 lakh, a security deposit is required. According to the fee structure, when a loan application is approved, the banks send the funds directly to the college or university. 7. What is the rate of interest charged on the education loan? To set an interest rate, banks use the Marginal Cost of Funds based Lending Rate (MCLR) which in India ranges anywhere from 7% - 8% plus a spread (about 1 - 2.5%). The additional distribution is currently in the 1.35 - 3 percent range (as of 2017). 8. What is the process of repayment? The individual availing the loan for their education is responsible for repaying the loan. In most cases, repayment begins when the course is completed. Some banks also give you a six-month grace period after you get a job or a year after you finish your studies before you have to pay back your loan. The repayment period is usually between 5 and 7 years, but it may also be extended. The bank charges a basic interest rate on a loan over the repayment period. The student's equated monthly installment (EMI) burden for future repayments is reduced by paying basic interest during the course duration. 9. What precautions should one take while applying for student loans? When availing of a loan, one must consider bank fees such as transaction fees, pre-payment fees, late EMI payment fees, and so on. The majority of lenders charge a processing fee of 0.15 percent of the total loan amount. 10. Are there any tax benefits? The interest paid on the repayment is deductible under Section 80E of the Internal Revenue Code. This tax benefit is only available to people who are paying interest on a personal loan. The whole amount of interest charged is deductible from your taxable profits. This deduction can be taken for up to 8 years. There are no tax deductions available for the principal sum. 11. How can I apply for an education loan? You can visit the Education Loans page on the EduFund website and fill up a simple form. You will get all the details, along with guidance from experts in the field. FAQs What is an education loan? An education loan is a type of loan used for educational expenses such as tuition fees and education-related expenses like books, accommodation, living expenses, and much more. Education loans can be availed for studying only and one of the requirements is an offer letter from a reputed university/college. Who can apply for an education loan? The primary creditor is a student. A co-applicant may be a parent, partner, or sibling. How can I apply for an education loan? You can visit the Education Loans page on the EduFund website and fill up a simple form. You will get all the details, along with guidance from experts in the field. Conclusion Good education is extremely important in the present dynamic world. It not only boosts self-confidence in students but also equips them with skills that in turn help them lead their life in the best possible way. Taking a loan might look frightening but in the long run, it definitely pays off, provided the student is focused and makes the best of the opportunity. Also, since an education loan is a person's first loan, it aids in the creation of a good credit score. If you repay the loan on time and without defaults, it would be easier for you to obtain a home loan, car loan, or any type of loan in the future.

With the value of a foreign education increasing by the day, education loans for paying college tuition fees have become very common and easy to avail too. ‍Education loan disbursals from banks and various financial institutions to Indian students, studying in India and abroad increased to 92,711 Crores this year from 90,345 Crores last year. ‍However, this data hides an important issue – the number of students who are not paying their education loans back has also been increasing. Banks have reported 7-9% of loans as bad loans over the past few years, by Indian students studying in India and abroad. Such a high amount of non-repayment is being attributed to a general economic slowdown, changes in immigration policies by various countries, and a supply-demand mismatch in the candidate's skills and jobs available. Not repaying an education loan can get students into many problems and we are not talking about only the legal issues. ‍Here are some quotes from students who have completed their education and are now struggling to pay off their loans. While education loans have been the answer for many Indian middle-class families to pursue their dream education since they are easily available from banks and other financial institutions. However, they are not the best solution. Is taking an education loan a good idea? The rising cost of education has made taking loans to be a decision fraught with concerns. Even payment for an average school abroad can set you back by 40-50 lakhs if you include your cost of living in that country. Quite a few colleges in India have become very expensive over the years. This is quite obvious considering that college tuition fees have seen a steep rise compared to anything else – be it homes, vehicles, or computers – adjusting to inflation that happens in prices year on year. And this is when salaries/wages have seen only a nominal increase. Scholarships and grants are another way that allows students to afford expensive education. However, the sheer number of students who are aspiring to study in a young country like India makes it a formidable task to be eligible for a scholarship. With loans being the only option in many cases to achieve a good education, fresh graduates are taking up jobs that do not match their skillset and with less promise, because good jobs are not on offer. The job of their dreams can wait while the loan is repaid first. The huge EMI also makes them less eager to spend on a house and postpone many important purchase decisions. So how do we make education accessible to a vast number of students without them staring at a huge debt burden after graduating? https://www.youtube.com/watch?v=4gTQkdePOWM ‍What's the solution?‍ A little bit of planning, a few years before the time comes to apply for colleges is all it takes to not get into the system of loans. Put away savings for education that you can use to pay for college. These savings should be such that the money grows, while your child grows. While education goals may vary as your child grows and his/her interests change, the fact that he needs a good education will not change. What do you do in this case? ‍There are apps like EduFund that allow you to plan for your child based on future goals. We have the expertise that can help you in understanding the financial goals you need to set, to send your child to a prestigious college abroad or in India. Our college savings calculator is comprehensive and includes tuition and staying expenses in a particular city too. Investing in SIP mutual funds is recommended to ensure good returns in the long term. So, starting early adds a lot of value to your fund. FAQs Is taking an education loan a good idea? Education loan is a great choice for Indian students who wish to study abroad but it's important to do your research before you avail of one. There are interest rates that students must consider and the process of repayment. One must research whether the course is covered by the loan or not, if your bank is offering a low-interest rate, how much loan coverage should you opt for, and the ROI of your course. Can you study abroad without an education loan? Yes, it is possible to study abroad without an education loan. You can apply for scholarships, borrow money from your parents or use an education fund if your parents have started one for you. If you are planning to go abroad for a master's or MBA then you can start saving and investing for your education as well. To keep up with the living expenses, you can opt for a part-time job as well if your student visa permits it. What are some good alternatives to education loans? If you have a time horizon of 10-15 years, then considering mutual funds and investing in US stocks and ETFs is a great alternative. This option is brilliant for parents with children between the ages of 3-10 years. Conclusion Before you start planning for your child's education, you must have a specific goal. And an education fund is paramount to reaching those goals With this education = corpus, you can ensure that your child doesn’t start his/ her future career with the worry of paying back a loan. And that will be the biggest present you can gift your child, the gift of education! ‍Consult an expert advisor to get the right plan TALK TO AN EXPERT

The central bank of the United States - The Federal Reserve, since the beginning of 2020, has printed over $3 trillion with significant printing activity happening between March 4th, 2020, and April 15th, 2020 when the assets of the central bank rose by nearly 50% from $4.24 trillion to $6.37 trillion respectively. The printing was majorly carried out to combat the impact the Covid-19, which has resulted in a weakening economic condition. But how does it impact the U.S. economy, currency, and Indian investors? How does the central bank put money into the economy? The Federal Reserve prints money and buys bonds equivalent to the money printed from financial institutions. This leads to a supply of currency in the economy, which is likely to drive down the interest rate (for borrowers), thereby putting an impetus on their consumption pattern. Additionally, lowering the interest rate also compels businesses to borrow and expand their presence. These activities are aimed at reviving the economy. The printing of currency, however, has led to a weakening of the dollar as seen in the dollar index chart (See charts below).  Source: FRED; EduFund Research What happens to the U.S. Dollar Index? The U.S. Dollar Index: It is a barometer for the international value of the U.S. dollar and the world's most recognized, publicly-traded currency index. The U.S. Dollar Index measures the value of the U.S. dollar relative to a basket of the top 6 currencies: EUR, JPY, GBP, CHF, CAD, and SEK. As seen from the chart below, the dollar has been weakening. Note: DXY – U.S. Dollar Index; DJI – Dow Jones Industrial Average At what rate is the money printed? The maximum growth in printing was during the weeks ending March 18th, March 25th, April 1st, April 8th, and April 15th. Not surprisingly, the Dow Jones Industrial Average, after bottoming out around March 18th, started to gain traction with the week ending April 8th showing a 12% increase over the previous week. During the period between March 18th to June 10th, the DJIA returned as much as 36%. The explanation for the rally is simple the money created by the central bank found its way to the American stock market and also the market outside of the U.S. in some cases. Considering the FPI activity, the data is in line with what one can expect with the creation of liquidity by the central banker. 12 months FPI flow – India in Asia looking for constructive long-term growth Source: businesstoday.in Has the newly printed money helped the economy? Well, the extent of the downturn and pace of recovery is uncertain and is likely to remain the same in the days to come. Until a trend for full recovery from Covid-19 is seen, re-instating confidence amongst the citizens remains a daunting task. Only with full recovery in sight, people will be able to re-engage in a broad range of activities. Also, the policy actions, to provide relief and support the economic recovery, at different levels of the government is likely to show some signs in days to come. What does it mean for Asian investors, particularly in India? A weakening dollar signals a higher risk appetite and is considered positive for growth in emerging economies. Further, the likelihood of renewed weakness in the U.S. dollar following Democrat Joe Biden's presidential victory should give another reason for investors to favor Asian stocks, including India. Robust local currencies help bolster the national balance sheet, and borrowers benefit from lower dollar-denominated repayment. Faced with a softening dollar, U.S. investors tend to seek growth and earnings opportunities outside the country. This has shown some improving signs for the economy such as in India where the corporate earnings are responding positively. Conclusion We, at Edufund, believe that the dollar's woes are expected to continue and Asia, including India, is setting itself for a constructive start to 2021. Any positive development on the vaccine front is likely to encourage investors toward riskier assets while shying away from traditional havens. Additionally, the fact that Democrats do not have Senate control may reduce the possibility of future stimulus thereby putting more pressure on the Fed to act aggressively for economic revival. Thus, the currency is likely to depreciate over the longer term, due to less favorable U.S. interest rates relative to other G-10 currencies than in the past. FAQs What is the U.S. Dollar Index? US Dollar Index is a barometer for the international value of the U.S. dollar and the world's most recognized, publicly-traded currency index. How does the central bank put money into the economy? The Federal Reserve prints money and buys bonds equivalent to the money printed from financial institutions. This leads to a supply of currency in the economy, which is likely to drive down the interest rate (for borrowers), thereby putting an impetus on their consumption pattern. What happens to the value of money if it is overprinted? Overprinting can result in the devaluing of money and also cause inflation in the market.

Ever heard of Marijuana ETFs? Marijuana has many nicknames, including weed, M.J., herb, cannabis, and other slang phrases. It's Cannabis Sativa's dried green or grey blooms.   The substance's major psychoactive component is tetrahydrocannabinol (THC), which causes people to experience a mind-altering condition when eaten. Cannabidiol (CBD), the second most crucial ingredient in marijuana, has helped treat pain, anxiety, and other ailments.  Marijuana ETFs are a relatively new and rapidly-growing segment of the ETF market. Marijuana ETFs rarely invest in local pharmacies or small-scale farmers. Cannabis ETFs, on the other hand, are more likely to invest in Pharma and Biotech companies that are conducting advanced research into clinical uses for cannabinoids.   They also like to augment their cannabis portfolio with firms that support the nascent marijuana market, such as fertilizers and alcohol and cigarette corporations that have invested heavily in potential marijuana revenue streams.  For instance, the ETFMG Alternative Harvest ETF (arguably the biggest marijuana ETF in terms of AUM) invests in a wide range of marijuana-related companies, including:  G.W. Pharmaceuticals is a pharmaceutical company based in London (cannabinoid-focused medicine).  Cronos Group is a multinational conglomerate based in (production and distribution).  Canopy Growth Corporation is a publicly-traded company based in Vancouver, British Columbia (research and product development).  Aurora Cannabis is a cannabis company based in Canada (product development and production).  Even though marijuana remains illegal under federal law, more than half of the states have approved medicinal marijuana, and eight states have legalized recreational marijuana, including California.   Most marijuana ETF issuers, on the other hand, go to great lengths to ensure that their funds only invest in companies that are either federally authorized or based in other locations, such as Canada.   Still, if the US Justice Department follows through on promises to pursue marijuana businesses that are legal in their home states, pot ETFs may face enormous legal risk. The perils of Marijuana ETFs Investing in cannabis, including cannabis ETFs, is fraught with danger. Regulatory uncertainties, funding challenges, and the sheer unpredictability of marketing strategies and operations could all change the future landscape, and thus the valuation of marijuana stocks and ETFs, dramatically and quickly.  1. Regulation  While recreational marijuana use and storage are now legal in some states (and medicinal cannabis use is legal even more), marijuana remains a Schedule 1 drug from the federal government's perspective.   This classification, which places marijuana alongside heroin, ecstasy, and LSD, implies that it has little medical use and is often used in the wrong ways.  This classification may result in legal ambiguity across state and federal regulations.  2. Unpredictability  Since its establishment in 2015, the U.S. Marijuana Index, which measures its largest cannabis companies, has seen both highs and lows. The index's 52-week high is 105.19, and its 52-week low is 19.91 as of July 7.  Marijuana ETFs have a total AUM of $1.94 billion, with 9 ETFs trading on U.S. exchanges. The expense ratio equals 0.71 percent on average. Equity is the underlying asset of marijuana ETFs.   The Advisor Shares Pure U.S. Cannabis ETF MSOS is the largest marijuana ETF, with $943.83 million in assets. PSDN, the finest performing Marijuana ETF in the previous year, was the Advisor Shares Poseidon Dynamic Cannabis ETF PSDN was the most recent ETF to launch in the marijuana market on 11/16/21.  Marijuana ETFs are ranked based on their AUM from highest to lowest  TickerFund NameIssuerAUMExpense Ratio3-Mo TRSegmentMSOSAdvisorShares Pure US Cannabis ETFAdvisorShares$943.83M0.73%-22.75%Equity: U.S. CannabisMJETFMG Alternative Harvest ETFETFMG$632.63M0.75%-18.09%Equity: Global CannabisYOLOAdvisorShares Pure Cannabis ETFAdvisorShares$134.25M0.76%-26.87%Equity: Global CannabisPOTXGlobal X Cannabis ETFMirae Asset Global Investments Co., Ltd.$76.85M0.51%-27.38%Equity: Developed Markets CannabisCNBSAmplify Seymour Cannabis ETFAmplify Investments$65.73M0.75%-23.30%Equity: Global CannabisTHCXThe Cannabis ETFOBP Capital LLC$55.13M0.75%-26.96%Equity: North America CannabisTOKECambria Cannabis ETFCambria$21.82M0.42%-8.73%Equity: Global CannabisPSDNAdvisorShares Poseidon Dynamic Cannabis ETFAdvisorShares$8.24M0.92%-27.61%Leveraged Equity: Global CannabisBUDXCannabis Growth ETFBanhazl$3.22M0.79%-27.10%Equity: Global Cannabis Alternative index funds and ETFs are better suited for beginning investors or those seeking predictability. FAQs Are marijuana ETFs a good investment? Investing in Marijuana ETFs is new and has its set of risks. Investing in cannabis, including cannabis ETFs, is fraught with danger. Regulatory uncertainties, funding challenges, and the sheer unpredictability of marketing strategies and operations could affect one's returns dramatically. Is there a marijuana stock ETF? Some high performing marijuana stock ETFs are - ETFMG Alternative Harvest ETF, AdvisorShares Pure US Cannabis ETF, and ETFMG U.S. Alternative Harvest ETF What is a good marijuana ETF? Cambria Cannabis ETF (TOKE)AdvisorShares Pure US Cannabis ETF (MSOS)AdvisorShares Pure Cannabis ETF (YOLO)ETFMG Alternative Harvest ETF (MJ)Amplify Seymour Cannabis ETF (CNBS)The Cannabis ETF (THCX)Global X Cannabis ETF (POTX) What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world. If you can digest the unpredictability of an unpredictable market in return for receiving it at a very early stage and your investment is well-diversified and healthy, cannabis ETFs could be a good fit for you. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Fixed Maturity Plans (FMPs) are close-ended debt funds that are investible for pre-defined lock-in periods. The tenure for different Fixed Maturity Plans can vary based on the time horizon for which the investment is made, ranging from 30 days to 5 years. Many investors, especially those who are just starting their investment journey, are on the lookout for low-risk instruments that provide consistent returns. For individuals who are risk-averse, Fixed Maturity Plans (FMPs) might be an option worth considering. To invest in FMPs, the way to go is through NFOs (New fund offers) or via companies that provide asset management services, making their investment at NFO. Fixed Maturity Plans mainly consist of debt instruments like treasury bills, corporate and government bonds, commercial papers, non-convertible debentures, securitized debt instruments, and certificates of deposit. The main purpose of this plan is to shield investors from interest-rate fluctuations and provide consistent returns. Moreover, FMPs are known for offering better returns than bank fixed deposits (FDs). Characteristics of Fixed Maturity Plans The silent features of Fixed Maturity Plans are as follows: Close-ended scheme: The schemes are close-ended because individuals can invest in these plans only by subscribing to NFOs where a given number of Net Asset Value (NAV) units are issued against the funds. These NAV units are tradeable in the stock market like any other script/share.  Portfolio composition: Fixed Maturity Plans are curated to alleviate the effects of stock market volatility and the interest rate risk on the portfolio. This is possible mainly in the case of debt securities. Interest-rate sensitivity: FMPs are less susceptible to interest-rate fluctuations because extended maturity periods stabilize interest rates in the long run. Quality of assets: The debt instruments issued by big and reputable companies play a significant role. Given their command in the market, these companies can offer good returns on their tools. Besides, fund managers and portfolio managers also have the incentive to choose from the available investments to maximize the returns on FMPs. Lock-in period: Fund withdrawal during the tenure of the investment scheme is not possible. Apart from this, investments in Fixed Maturity Plans are made only once, i.e., a flat sum. The main aim of such rules and regulations is to ensure ample time for the returns to exhibit the magic of compounding. Advantages of fixed maturity plans There are multiple benefits that are associated with investing in Fixed Maturity Plans Lower-risk: The risk associated with FMPs is considered to be lower than several other investment options. The investment is deemed secure because FMPs primarily target the debt securities that well-known listed companies issue in the market. FMPs are backed by high ratings given by renowned credit rating institutions. Investment in highly rated instruments also reduces the risk of default. These plans provide a balance to investors by protecting their capital and acting as defensive investments. Stability: Due to less exposure to equity volatility and lower interest rate risk, these funds fluctuate less than the markets. These plans become attractive to investors in recessionary times because of the safety of capital and the returns offered under the circumstances. Disadvantages of Fixed Maturity plans Lower yields: By now, we all know that higher rewards are linked with higher risks. The returns on these plans are lower than the equity benchmarks as the rate of interest stays the same for the entire timeframe of the investment. Less liquidity: The lock-in period of FMPs means that the investments cannot be withdrawn before maturity. This lack of liquidity might prove to be an inconvenience for some investors. Tax liabilities on FMPs FMPs attract STCG (Short Term Capital Gains) or LTCG (Long Term Capital Gains) tax depending upon the time horizon of the investment. Any investment in FMP is short-term if the lock-in is less than three years and investors are liable to pay STCG based on the income tax slab they belong to. Returns on investments with a lock-in period of more than three years attract LTCG at 20% after indexation adjustments. Indexation incorporates rising prices in the economy, thereby resulting in tax benefits for the investors. Other than the taxes on the appreciated value of the investments, the FMPs with dividend options also require investors to bear the DDT (Dividend Distribution Tax) on the dividends that they receive during their investment. Who should consider investing in FMPs? Every investment option has some characteristic that makes it suitable for particular groups of people. In the case of FMPs, their low-risk feature makes them ideal for investors who are unwilling to take risks associated with the stock market. The comparatively stable returns and capital protection give the investors a sense of comfort. Additionally, the total returns are usually known beforehand because the interest rates of the underlying funds are known at the time of issuance itself. The security of these returns also allows investors to plan financially for these investments. Those who are highly risk-averse often put their entire capital into FMPs, whereas the investors looking for portfolio diversification allot a certain percentage of their capital to such funds. FMPs work well for those looking to mitigate the risk without compromising too much on the returns. FAQs What are Fixed Maturity Plans? FMPs are close-ended debt funds that are investible for pre-defined lock-in periods. The tenure for different Fixed Maturity Plans can vary based on the time horizon for which the investment is made, ranging from 30 days to 5 years. Who should consider investing in FMPs? In the case of FMPs, their low-risk feature makes them ideal for investors who are unwilling to take risks associated with the stock market. What are the advantages of fixed maturity plans? Lower-risk: The risk associated with FMPs is considered to be lower than several other investment options. The investment is deemed secure because FMPs primarily target the debt securities that well-known listed companies issue in the market. FMPs are backed by high ratings given by renowned credit rating institutions. Investment in highly rated instruments also reduces the risk of default. These plans provide a balance to investors by protecting their capital and acting as defensive investments. Stability: Due to less exposure to equity volatility and lower interest rate risk, these funds fluctuate less than the markets. These plans become attractive to investors in recessionary times because of the safety of capital and the returns offered under the circumstances. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Excited to get into the world of investing? Exchange traded funds or ETFs might be your best bet. It offers a chance for those new to investing to gain exposure to the markets of their choice, without needing to invest exorbitant amounts of money. Photo by Burak K from Pexels With ETFs, even a complete newbie can begin buying and selling investment products that could allow you to profit significantly in the long term. It is also a great way to quickly succeed at fundraising for education. You could put your money into several different asset classes like stocks, bonds, commodities, precious metals, and more. For some, SIPs and Mutual Funds may be a better choice, so we recommend reading more about them as well, before pulling the trigger and making a decision. With that said, investing carries inherent risks, so only invest what you are prepared to lose. It isn’t a good idea to bet the farm on a single ETF product that could move against you. However, in the long-term, stock indices like the S&P500, DJI, NIFTY50, and more have been known to trend upwards and be relatively safe bets to invest in. With that said, it is essential to understand exactly what an ETF is before we can delve into who they are perfect for and what their shortcomings are. Exchange-traded Funds (ETFs) - What are they & how can you profit from them? As the name suggests, Exchange Traded Funds, unlike Mutual Funds, are traded on stock exchanges around the world. Thousands of these ETFs are traded on a day-to-day basis by both professional traders and High-Frequency Trading bots, also known as HFTs. Photo by Anna Nekrashevich from Pexels Does all this sound a little too technical? No need to worry, because we are about to break it down for you and introduce you to the basics, along with the most important aspects that you need to know. First, we are going to dive deep into who might find ETFs a suitable option for investment. Who should invest in ETFs? While anybody above the legal age in their country could invest in an ETF, there are specific types of people that can derive great value from them - 1. Students and beginner investors For those that are completely new to this space, ETFs can be an excellent way to get started and get a feel for investing your money in different asset classes. ETFs form one of the best child investment options available today. As a student who has prior commitments and other occupations, ETFs are a powerful tool to make sure that you get a feel for investing early on. Since they require you to do very little once you have purchased them, you are much more likely to be able to track them and gain valuable experience with minimum effort. 2. Those with full-time commitments In today’s fast-paced world, not everyone has the precious resource of time to go through all of the nuances of investing. Especially for those who work a full-time job, and even potentially two jobs at the same time, it can be overwhelming and even impossible to find the time to delve deep into the financial markets and how to profit from them. In this way, ETFs are a great way for busy professionals and even fully engaged stay-at-home moms to invest their money without investing much of their time. 3. Investors looking to limit their risk in the market If you have the time to keep track of your investments but simply do not want to overexpose yourself to excessive risk, ETFs are a great way to go about investing. Mini and micro ETFs allow you to invest small amounts of money that suit your risk appetite, meaning that you only ever need to invest as much as you would feel comfortable with. This is one of the main reasons that ETFs are so popular worldwide. Are there any downsides to investing in an ETF? Investing in ETFs can be a dream come true if you’re looking to expose yourself to minimize expenses. However, as with anything in life, there are pros and cons to investing in an ETF. It helps to be aware of these downsides especially as a beginner to ETFs so that you can keep yourself better informed and avoid any surprises. Some of the downsides to investing in an ETF are - 1. Transaction costs As the saying goes, nothing in life is free. This could not be more true when it comes to purchasing and holding an ETF. Depending on which exchange you choose to invest your money with, you could be subject to a whole host of fees, including - Order book fees Purchase/sale fees Time-based holding fees Over time, these fees can build up to be a significant amount of money, meaning that you will need to take this into account when calculating your final profit or loss. Fees can eat into your profits drastically, so it is essential to choose a broker or exchange that offers you the best deal when it comes to the added costs of buying and selling ETFs. 2. Tracking errors At times, ETFs can stray far away from the actual price of the index that they track. This can be for a variety of reasons, including supply and demand fluctuations, liquidity difficulties, and other such factors. In such cases, you may find that the particular ETF you have invested in trades at a different price to the particular stock, commodity, index, or precious metal that it tracks. While this is normal and generally accepted in the world of investing, it is a downside to be particularly aware of as you embark on your trading journey with ETFs. 3. Management Fees Since ETFs are products created by exchanges and financial institutions, they often attract management fees that you are likely to be liable to pay when you purchase them. These management fees contribute towards the maintenance of the exchange rate and order book liquidity and also incentivizes the broker to provide such products for trading. Keep in mind though, that management fees are in general just a small percentage of the entire amount that you will spend on your purchase. However, it makes sense to shop around for exchanges that offer reduced management rates, special offers, and bonuses that can help you lessen the amount you need to pay. FAQs What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world. Are ETFs good for beginners? ETFs are generally suitable for beginners as they are inexpensive compared to a few other investment tools. ETFs have a diversified asset profile, reducing the risk associated with the investment significantly. Conclusion Exchange-Traded Funds are perfect for those looking to invest in the stock market for the first time. It also helps those who have limited knowledge of the stock market and the various intricacies that makeup trading and investing. If you’re someone who is just starting or attempting to experiment with the prices of various stocks, commodities, or precious metals, ETFs are a great way to start. Just remember, however, to always do your due diligence and research the products you are interested in, and the associated risks and costs that come with them.

Finding ways to pay for school can be difficult, but attending graduate school is a necessity for your career. Naturally, the programs and location of the university would be your first priorities, but there is no way you can ignore the university's tuition rates. You would naturally assume that your parents could support your schooling, as they may have done throughout the years. However, when they fall short of raising the entire amount, there is always the option of an education loan for international studies.  Keep reading to know more about the various features of a student loan for studying abroad because there are numerous ways that you can support your education abroad!  What is a Study abroad Education Loan?  A student loan for overseas studies is a type of loan created to assist students in covering the costs of post-secondary education, including tuition, books, supplies, and living expenses while studying abroad. In comparison to other loan kinds, it could have a significantly reduced interest rate and a deferred repayment plan while the borrower is still enrolled in school.  Apply for Education Loans Why is a loan for studying abroad advantageous?  Parents may struggle to afford education costs at times. In such circumstances, a student loan can be obtained from banks or other financial institutions (NBFCs). A student loan may be used to cover all or a part of the cost of schooling. A study abroad education loan assures that a student can finish their university education without facing any financial difficulties.  Loans are generally thought of as bad debt. Given that it is an investment in oneself, it differs from a loan for international study. You are making an investment in your own higher education, which will aid in your job search. It allows you to make far more money than the loan's principal. Types of education loans  When searching for an education loan to study abroad, the following two study loan kinds may be of assistance:  1. Secured Credit  The borrower pledges a portion of their assets as collateral for this specific loan for international studies. An individual who applies for a secured loan must mortgage his property to the bank or financial institution. Moreover, the borrower's mortgaged property cannot be agricultural land.  2. Unsecured Credit  Unsecured loans are financial obligations that are not backed by the collateral of the borrower. These might be offered by financial institutions in a variety of forms or marketing bundles. A variety of requirements must be met in order to qualify for an unsecured loan.  Apply for education loans Criteria for eligibility and documents needed to apply for an international study loan  Let's now discuss some prerequisites for being eligible for an education loan to study abroad:  1. Profile of the Borrower  The GRE is a crucial consideration when applying for an international student loan. The total academic performance and professional experience, in addition to the GRE score, are important factors when applying for a loan. Don't forget that Indian citizenship is the most important requirement to qualify for an education loan to study abroad.  2. Co-borrower Information  The co-profile borrower is crucial in obtaining a student loan for international studies. A foreign education loan can be secured depending on a number of variables, including your financial situation, location, and assets you own.  3. Acknowledged university  The university's standing matters as well if you've applied there. Higher university rankings correspond to higher borrowing prospects. The best universities around the world also provide better employment opportunities, increasing the security of international student loans.  4. Norms for Underwriting  Underwriting norms are the standards set forth by loan providers to ensure that only safe and secure loans are made available. They are used to decide whether or not to provide a person with a study loan for overseas study, how much money the company is willing to loan, and at what interest rate.  Let's look at the paperwork needed for an education loan for international students:  An application form that is fully completed   Academic transcripts  Passport pictures  KYC paperwork  Bank statements with residence evidence  Evidence of income  Collateral records  A birth record  Confirmation of enrollment from a reputable university  https://www.youtube.com/watch?v=4gTQkdePOWM How to apply for an International Student Loan?  Let's talk about how to apply for an international student loan now:  Decide which loan for international study suits you. Verify all details, such as the moratorium period, the payback time, the interest rate on an education loan provided by the Indian government, etc. Visit the chosen education loan's official website and complete the application. Scan and upload the necessary paperwork and await the result.  Conclusion  Nowadays, obtaining an education loan for studies abroad is not taxing, as long as you have all the necessary paperwork and know which kind of loan for foreign studies is ideal for you. Being accepted into a reputable university as an international student is one of the most important factors which further improves your chances of receiving the finest loan for overseas studies!  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Families who want their children to pursue higher studies and are unable to make ends meet are on the lookout for an education loan without collateral in India.  It is no longer easy to secure an education loan as students have to meet a strict set of criteria to become eligible for the loan. Most loan applications get rejected midway in the absence of a collateral or third-party guarantee.  Education is a blessing that can break the shackles of poverty, but how to get a loan when you do not have any property, fixed deposits, land, bonds, insurance policies, or shares to pledge as collateral is a worry for most of the middle-class households in India.  In most cases, financial institutions or private moneylenders ask for collateral as a security pledge in case of loan default so that they can recover their money in adverse conditions by selling the collateral property. Without the collateral, most banks, NBFCs, or even private lenders hesitate to sanction an education loan with a limit that exceeds INR 7.5 lakhs as the chance of default is very high.  Let us look at the institutions from where applicants can get an education loan without collateral. What is a Non-Collateral or an Education Loan without Collateral? Non-Collateral or an education loan without collateral is a type of education loan where the loan applicant can get the loan amount without pledging security against it. In the case of a non-collateral loan, the borrower has to meet specific criteria that the loan authority has set. These criteria can be country-specific, a particular study program, or a minimum loan amount. https://www.youtube.com/watch?v=4gTQkdePOWM Where can you get an Education Loan without collateral? 1. CGFEL The Credit Guarantee Fund for Education Loans, or CGFEL, is a scheme that can help loan applicants to get a collateral-free education loan from a financial institution. The scheme comes under the Model Education Loan Scheme of IBA or the Indian Banks Association.  Under the CGFEL scheme, students can get an education loan of INR 10 lakhs for studying in India and INR 20 lakhs for studying abroad through scheduled commercial banks. The maximum loan amount is set at INR 7.5 lakhs for an education loan without pledging collateral, but if the amount is more, then the applicant will have to provide a collateral or third-party guarantee.  Students who have secured a collateral-free education loan under the CGDEL scheme get a one-year moratorium after completing their studies from loan repayment.  2. Banks Banks generally follow the guidelines set by IBA for education loans without collateral, although their internal rules may vary with the set criteria. It is the sole right of a banking institution to make changes for a loan amount that exceeds INR 7.5 Lakhs. The interest rates, the upper limit of the maximum loan amount, and repayment terms vary from bank to bank.  Edufund is also associated with public and private banks and NBFCs in India and can help you in getting the best possible terms for the education loan without collateral if you are interested in borrowing the money from a specific bank. The app also has a team of dedicated experts who will talk on your behalf and bargain for the best loan terms.  Starting the loan process at Edufund is very straightforward, as you can get direct quotes from partner institutions. Higher loan amounts, lower interest rates, and hassle-free loan process are possible only at Edufund.   4. Private Lenders and Non-Banking Financial Companies Private lenders and NBFCs generally sanction education loans without collateral for an amount that exceeds INR 7.5 lakhs. This is a tricky situation for the borrower as these types of education loans come with a higher interest rate compared to the collateral-free education loan of a maximum amount of INR 7.5 lakhs.  5. Education loan without collateral at Edufund App Suppose parents or students are unable to meet the set criteria for an education loan without collateral in India. In that case, they can visit the Edufund App and meet with the experts who handle loan applications.  Edufund has a dedicated loan page that will answer all your loan-related queries and direct you toward the proper channel so that it becomes possible for the applicant to become eligible for an education loan up to INR 75 lakhs at the minimum possible interest rates without any collateral.  The service is free, and there are no hidden charges that will come at a later date to haunt you.  Conclusion  Education loan is the need of the hour, and if you can get an education loan without collateral in India, then it is a win-win situation for a student who needs the loan amount to fulfill his dreams. Student loans serve as important financial aid for millions of students who otherwise would not be able to get a proper education and desired jobs.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

If you intend to use an education loan to pay for your higher education overseas, you may have thought about the costs that these loan cover. What are some expenses under education loans? Do education loans only help with tuition fees? Can education loans cover the cost of flights or help pay the living expenses?   Keep reading to find out the expenses under education loans.    One of the main issues facing the majority of Indian students who want to study abroad is how they would pay for their higher education. An education loan makes sure that all of the financial conditions for the application process for an education loan overseas are satisfied within the allotted time limit.  For the majority of students, the cost of an education loan in India for studying abroad is the main topic of conversation when it comes to financing higher education overseas. The information on this page is relevant to both secured and unsecured education loans in India for international studies.  Costs of a typical course abroad for a student loan  One widespread misconception is that student loans do not fully cover the costs associated with studying abroad. This is untrue, though, as all educational loans, whether secured ones from government banks or unsecured ones from private lenders, cover the following list of costs that are essential to the educational process.  1. Student fees  One of the two main components of both forms of education loans in India for studying abroad is the tuition prices charged by foreign universities. An education loan in India for the international study is intended to assist students in covering their tuition costs. In India, all student loan repayments include tuition. Therefore, when deciding on the overall amount of your student loans, you should give top priority to covering your tuition costs.  2. Housing Costs  The term "factors" can refer to a wide range of things. The main living costs for a student include their rent or room and board, food, and costs for other daily necessities like transportation to and from school, a security deposit for housing, etc.  3. Medical Insurance  International students are frequently required to obtain health insurance by many foreign universities. This specific cost is covered by an education loan in India for studying abroad as it is one of the prerequisites for studying abroad for many students. Therefore, while applying for an education loan, health insurance can also be taken into account.  https://www.youtube.com/watch?v=4gTQkdePOWM 4. Flight Tickets  Another significant price covered by an education loan when applying for one overseas is airline tickets to the location of your choice. When quoting the education loan amount to your bank, this component might also be included.  5. Research Aid  You can include this information in the education loan application if your foreign university's offer letter states that you are responsible for paying for excursions and other extracurricular activities throughout the course of your studies. In addition, when applying for both forms of school loans in India, students can include the price of products like books, computers, and other study supplies in their total expenses.  What elements must a student take into account when determining costs?  There is no way to change the loan arrangement because the student loan is a one-time transaction. Therefore, a student needs to be aware of the costs they can cover on their own and those for which they might require a loan. The student's financial stability at the time of study is of utmost importance, so the loan amount should be chosen with that in mind.  Before assessing the costs, a student must take the following into account:  The price of housing in a specific country and whether it will be possible to live in shared housing for a lower cost of living.  Food prices in the city where the university is situated.  Additionally, a student's ability to prepare meals on their own can significantly lower the cost of tuition.  Since academics are not just available on-campus, the cost of eating out or intercity travel will be included in the total fee.  Many regions, including the US and Australia, have cheap used car markets and reasonable gas prices. In contrast, students in countries like Ireland receive discounts on public transportation. All of this requires preliminary research.  In the city where the university is situated, there are opportunities for part-time employment. There are enticing part-time occupations with regulated minimum earnings in several nations. This assists students in paying for a sizable portion of their living costs.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

A member of your family (preferably your parents) who co-signs the loan application and assumes responsibility for repayment if you are unable to do so is known as a co-signer. Additionally, banks require a local contact in India for any due diligence while you are away.  In other words, whether applying for a loan from a public or private lender, having a principal co-applicant is required. A primary co-applicant and a financial co-applicant can be the same individual, although private lenders (private banks and NBFCs) require one during the loan application procedure.  The need for a co-signer  In many situations, having a co-signer for your loan makes sense.  Your credit is poor.  You don't make a lot of money.  You are a young person without any credit to your name.  You can get around these obstacles and be granted a loan by using a co-signer. If you and your co-signer are accepted, you might even be able to acquire interest rates that are lower.  However, a few things must be in place for this configuration to function:  Between the co-signer and the borrower, you should be confident that you can trust each other because the borrower will be demanding a lot from the co-signer.  The co-signer must be in good financial standing. Co-signers may not be permitted to co-sign on the loan if their credit is equal to or worse than yours.  The co-signer must be capable of making the loan payments on their own in the event that the borrower defaults on the loan.  Looking for a co-signer  Most borrowers who employ a co-signer pick someone close to them, such as their spouse, parent, grandparent, sibling, or a person with a similar relationship.  Sadly, not everyone has access to these choices, and in certain situations, family members may not have excellent credit, which is needed if they intend to apply for a loan with you.  Try contacting these people if you find yourself in this situation:  Friends: Do you have a friend that is trustworthy with money and has a stable income? Inquire if they would mind signing your loan as a favor.  Close relatives and cousins from extended family are all acceptable co-signers. Just make sure they have solid financial standing and decent credit (i.e., manageable debts and steady income).  Mentors: You can also consider finding a personal or professional mentor. Remember that they will need to know you well enough to have confidence in your financial routines.  Friends of your parents: You've probably known a couple of your parents' friends all your life. Are any of them willing to take a risk on your behalf?  Why do you need a co-applicant or co-signer?  A co-signer is essential to having the loan approved throughout the entire procedure.  Banks require some type of guarantee from borrowers that the loans won't turn into bad loans in the event of non-repayment for whatever reason. As a result, students have found it difficult to deal with the circumstance when they needed a co-applicant or co-signer.  In a scenario, where the student defaults on the loan after completing their studies, a co-signer assures that the lending agency's requirements are met and that there are reasonable prospects for the loaned amount to be recovered.  Cases where students' loan applications are denied because they lack a co-applicant or co-signer  For the processing of student loans from overseas, there are numerous channels available. The most crucial need for students to meet in order to proceed with the application for an education loan is having a co-signer.  However, this restriction is no longer a concern for students whose parents or other close family members are unable to serve as co-signer.  There are a few methods currently for processing a sizeable portion of the tuition cost through loans without needing collateral or a co-signer, so if a student doesn't have a co-signer, they shouldn't worry too much.  The granting of unco-signed, unsecured loans  Before granting a loan, banks, and NBFCs review a student's profile and take into account a number of variables. The likelihood that the loan will be approved and credited to the college's account at the time of admission or in the loan account is extremely high if a student meets the requirements established by the banks. Nonetheless, if you are a working person, the procedure may become simple, and acquiring the loan may also enhance.  The following considerations are taken into account while determining the loan amount:  The college to which applicants have been admitted.  The university belongs to the upper tier or the tiers below.  The candidate's credit history.  The sum of the scholarship received. (If any) Consult an expert advisor to get the right plan TALK TO AN EXPERT

As more and more individuals move out, earning a degree from an international institution may sound fancy and appear aspirational. Still, it has expenses, and handling them can be challenging. So, here are some potential risks and disadvantages of utilizing student loans for study abroad, along with suggestions for reducing them. Drawbacks of using abroad education loans Student loans can be useful for acquiring domestic or international studies funding. However, it might not be as simple as you believe in obtaining a student loan. Although applying for the finest student loan program is simple, getting your loan accepted might include a number of challenges. Another important consideration is the interest rate on student loans, which is frequently higher than that on other types of loans. The problems with student loan debt are not limited to these. The following are a few drawbacks of student loan debt for international study: 1. You have to start your career with debt If you rely on student loans to fund your school, you will start off in debt when you become an adult. Yes, if you have a college degree, you may be able to earn more money overall than someone who only has a high school diploma. However, depending on how much debt you take, it could be challenging for the first few years after graduation, especially if, like millions of other college grads, you require assistance finding a job that pays enough to meet your expenses. 2. Defaulting on your education loans can tank your credit score Missed payments, student loan defaults, and taking on more debt than you can manage after graduation can all have a significant negative impact on your credit score or the credit score of your co-borrower. The worst case situation is defaulting since it means you could not pay back the lender for the loan you took out. 3. Education loans might not cover all your expenses Annual borrowing limits apply to the majority of federal student loans, and some private lenders could as well. Depending on how much tuition, fees, materials, board, and lodging will cost, you might still need to look for extra sources of income to finish your degree. https://www.youtube.com/watch?v=4gTQkdePOWM The potential risk of using abroad education loans Both lenders and borrowers run a substantial risk when providing student loans. Unlike other loans, student loan repayment is more unclear since it depends so much on the possibility that students will pass their courses and find employment. Students may receive negative feedback on their credit history, and lenders may suffer loan default if students don't complete the course or find employment in a timely manner. On the other hand, students are under a lot of stress, and high-interest rates may impact their ability to repay their debts on student loans. How to mitigate the risks and overcome drawbacks? When choosing the finest education loan for higher education, extensive research and comparison are required to mitigate the risks and have the least drawbacks. Compare the interest rates and repayment alternatives offered by several organizations before selecting an education loan. You could also speak with a professional. To help you save money, they can help you organize your repayment plan and negotiate a reduced interest rate. Determine how much money you need to pay for your higher education before taking an education loan. Consult an expert advisor to get the right plan TALK TO AN EXPERT FAQs Why are student loans good? Student loans are regarded favorably since they come with extra benefits that make studying abroad manageable. When you take out a student loan, the lender provides you time (a "moratorium period") to focus on your studies and choose a job before you begin making payments on it. Other loans, such as personal loans, house loans, etc., are not eligible for this choice. Does taking out student debt make sense? Yes, student loans are helpful since they reduce the pressure of paying for your expenditures through enticing programs given by banks to study abroad and many other things. Taking out an education loan is a realistic choice because it lessens parents' load, and the repayment terms are fair. Can I get an education loan for studying abroad without collateral? Yes, student loans are beneficial since they ease the burden of covering your expenses through alluring bank programs that encourage you to do things like study abroad. Even the financial team at WeMakeScholars suggests that getting an education loan is a sensible decision because it eases the burden on parents and because the repayment conditions are reasonable. The final tip is that make sure you've done your research, decided which course of action is best for you or your child, and then finalized a sound education strategy to create a bright future!