By Rajesh Kachave
India is a rapidly changing country in which inclusive, high-quality education is of utmost importance for its future prosperity. Education has always been an important aspect of the Indian culture, which has made education financing a multi-decade secular growth story in India. An ever-increasing education spending and favourable demographics have made this market a crucial one, providing institutional funding required to harness and empower the human capital in a country. The education loan market has grown exponentially over the years. PSU banks hold the lion’s share; however, the NBFC segment has been steadily gaining market share over the years.
Specialised education-focused NBFCs have emerged as alternative lending institution that provides hyper-personalised education financing solutions to enable students to fulfil their academic aspirations.
Specialised NBFCs design education financing solutions that cover the holistic cost of education, which includes tuition fees, travel costs, accommodation expenses, living costs and more. New-age NBFCs enable students to pursue a wide range of courses by partnering with foreign institutions, offering student loans for both traditional and unconventional programs such as aviation, filmmaking, robotics & industrial automation and more.
Specialised education-focused NBFCs take a student-centric approach to evaluate student loan applications. At Avanse, we believe in assessing the aspirant’s profile thoroughly rather than depending only on the co-borrower’s financial background. As a part of this approach, we evaluate the student’s past academic performance, entrance test scores, the pedigree of the university/institute and courses and more such parameters to derive an employability potential score.
Education-focused financial institutions offer flexibile repayment options for the ease of their millennial customers. Most of them discuss the terms with the applicant to understand how they will manage to pay off their loans, whether they want to start contributing during the course in the form of simple interest/partial interest or after course completion.
Education-focused NBFCs usually play the role of a consultative partner rather than just maintaining a transactional relationship. We believe in handholding the customer throughout their higher education journey so that we can entirely focus on their studies, leaving all their financial worries to us.
Young aspirants choose student loans because of the multiple benefits. Education loans cover the holistic cost of education and empower students to earn a self-made badge. The easy availability of student loans from education-focused financial institutions enables a smooth journey for both students and parents. However, students must conduct thorough research to understand the nitty-gritty related to such loans. This will not only debunk all the misconceptions related to student loans but also allow students to choose the best possible financing solution to pursue their education.
(Author is Chief Business Officer-Student Lending and Insurance Business, Avanse Financial Services)