Continuing its downward journey, the Indian rupee (INR) is about to touch the 82.00 mark against the US dollar (USD). With the depreciation in rupee value, the overseas expenses – be it for foreign travel, studying abroad or importing goods – are increasing by leaps and bounds.
So, unless you can bypass the currency exchange process, it becomes difficult to oblige the overseas commitments.
Sasha Ramani, Director of Corporate Strategy, Mpower Financing, explains the difficulties faced by people due the devaluation of INR and how to manage your overseas expenses in the current scenario:
Concerns due to continuous depreciation of rupee
This has deeply impacted students’ abilities to fund their overseas education – especially for the many Indian students who take study abroad loans from Indian financial entities. Many of these students will encounter a last-minute financial shortfall when their rupees are no longer enough to cover the cost of an American or other overseas education – especially at a time of high inflation.
To help avoid unexpected setbacks, students seeking to study abroad should explore US dollar-based loans to cover the cost of their education. Students who take advantage of dollar-denominated loans enjoy the certainty that they will have the funds made available to them when they need to be drawn upon. They can also have peace of mind by not having to worry about exchange rates, and regardless of currency volatility or market turmoil, their funds are ready when needed. Companies like Mpower reduce one more hassle for students by making loan disbursements directly to the university.
Increase in the number of dollar-denominated loans
We see the students face this problem all the time – they used to have enough money (in their home currency), but currency depreciation affects what they can afford in the US – perhaps during their final semester, final year, or for longer. A strong dollar can thus result in a substantially increased cost of education for students, and leave them stranded when their foreign currency-denominated savings are no longer enough to fund their education.
Fortunately, students have solutions to these last-minute financial concerns – indeed, a strong dollar can be a blessing in disguise. The solution is for students to leverage US dollar loans, which are particularly valuable in a strong dollar environment. Students (and their parents) who take out foreign-currency loans are rushing to seek additional loans or top-up funding so that students don’t have to defer their education. But with US dollar funds secured, students can enjoy the certainty that they will have funds available to them when they need to be drawn upon – regardless of the future value of the dollar.
Increase in the number of top-up student loans
At Mpower, we have seen a large rise in interest from students availing our international education loans to help their studies in the US and Canada. This is not only because Mpower offers a US-dollar loan – which is a safer bet for students studying at American universities, but because we offer fixed-rate loans. At a time of rising interest rates, this means that an Mpower loan rate will not increase over time. In fact, Mpower offers several easy interest rate discounts which students can take advantage of.
Students who have graduated from their overseas education are increasingly refinancing their loans with Mpower. Refinancing allows students to lock in a (lower) fixed-interest rate and take advantage of many other benefits while working in the United States.