Want to study abroad? This startup helps students with collateral-free study loans
Many Indian students aspire to study abroad as the next step for their career growth. However, the lack of credible information on the application process and the high cost of loans act as deterrents.
We wanted to be the one-stop-shop for everything that a student needs to successfully move abroad, Co-founder Vaibhav Singh tells YourStory.
Since their IIT-Kharagpur days in 2005, the duo had always remained in touch, working for multiple global financial corporations abroad.
Vaibhav returned to India in 2014 after realising he wanted to get into the entrepreneurial route. He worked with Capital Float and InCred and played a key role in growing their business.
On the other hand, Arnav plunged into the startup world with a few stints in a leading VC firm and a startup, which gave a ringside view of the startup ecosystem.
Pain points
While working with InCred, Vaibhav had insights into a whole new world of student loans. First, Indian students who went abroad for higher studies were paying higher interest rates on their education loans.
Second, students were dependent on multiple sources for getting all the information on the process of getting admission to a foreign university.
An American student at Harvard borrows at around 4-5 percent, but the same for somebody from India is charged 12-14 percent on the education loan, says Vaibhav.
This happens primarily because the student procures the loan from a bank in India at interest rates prevailing in the country.
We realised that student loans should not be given in Indian rupees, but the currency of the destination country, says Vaibhav.
Another hurdle was that Indian banks would typically ask for collateral for any student loan, which goes beyond Rs 15 lakh.
The second challenge was that the entire process of getting a college admission – normally a 9-12 month process – students typically depended on various service providers, which leads to inconsistency in the service quality. Read more