The number of Indian students studying abroad at higher educational institutions keeps increasing steadily. A growing number of Indian students (totaling 750,000) moved abroad for education in 2023 as the student migration continues at an upward trajectory. Taking an education loan functions as the main solution available to make this dream achievable.
Most individuals fail to recognize how foreign currency exchanges combined with fluctuating exchange rates cause substantial money loss throughout their overall expenses. When you study abroad or intend to do so your education expenses and loan repayment amounts will be influenced by rupee exchange rates for US dollar, Euro, and Pound currencies.
This blog demonstrates how currency exchange rates influence educational expenses and presents ways to handle their effects through Unipay Forex’s assistance and careful advanced preparation.
The concept of Exchange Rate Fluctuations
Every nation has their own national currencies. The value measurement between one currency and another represents an exchange rate. The current exchange rate between US dollars and Indian rupees equals 1 USD = ₹75 such that ₹75 funds 1 US dollar.
The exchange rate encounters continuous movements without any stability. The conversion rates shift every day to varying degrees because of economic health along with geopolitical factors and inflationary changes and market speculation. Exchange rates establish the standard form of money transactions in modern global markets.
Big sums such as tuition fees and education loan payments turn the small currency rate changes into significant financial expenses.
The Impact on Education Loan Due to Currency Exchange Rates
Your education loan repayment cost rises whenever you exchange foreign currency denominated debt in USD or GBP to Indian rupees because of rupee fluctuations.
1. Education Loan More to Repay If the Rupee Drops
An illustration will help us understand this concept.
When borrowing $50,000 at an exchange rate of 1 USD to ₹75 the loan equals ₹37,50,000. The loan value in the Indian currency stands at ₹37,50,000.
When the repayment period arrives the currency exchange rate shows 1 USD matching ₹85.
You must repay ₹42,50,000 to settle a loan of $50,000 due to the currency fluctuation.
The exchange rate fluctuation between ₹75 and ₹85 creates a ₹5,00,000 additional liability on your education loan debt.
2. Interest Costs Go Up Too
People tend to perceive foreign loans desirable because their interest rates appear smaller when compared to Indian loan rates. The loan fees get calculated using foreign currency although the currency exchange rate affects these costs. It creates higher actual interest costs than projected when the Indian currency weakens against other foreign currencies.
The combination of 7.5% loan interest at a 5% rupee depreciation raises your yearly actual borrowing expense to approximately 12.5%. The easy-to-miss hidden aspect on foreign loan rates becomes clear when people calculate them because the rates end up higher than what most Indian loan rates offer.
3. During the period of education loan moratorium the actual costs for borrowers escalates
Education loans include a moratorium period of your course length added to another six months during which you do not need to begin any loan payments. Sounds good, right?
The accumulation of interest continues in full force on foreign currency loans while this period is active. When you factor in a falling rupee value together with the lengthy moratorium period your loan amount will end up higher than your initial predictions.
Not Just Education Loan, Your Expenses Go Up Too
Your expenses will ascend above the current values since loans are not the only element that increases.
The expenses for your loan payments, the tuition fees, rent expenses, and food bills and transportation charges need to be evaluated in the host country currency. When the exchange rate modifications your spending costs will escalate in Indian money terms.
Example:
Your tuition fee is $20,000.
When 1 USD = ₹75, that’s ₹15,00,000.
A change in exchange rate from ₹85 would push the expense to ₹17,00,000.
That’s ₹2,00,000 more, just like that!
A changing exchange rate will completely disrupt your financial plans since your loan amount stays fixed and your family sends money on a monthly basis.
Surprise EMI Hikes
After determining your monthly EMI at ₹50,000 using a specific exchange rate. An exchange rate decline would lead to a mounting EMI which could exceed ₹56,000. The monthly effect happens continually without any exceptions.
Those families dealing with restricted income or continuing home-based expenses struggle to handle this additional ₹6,000 monthly amount.
Market fluctuations after your payment seems favorable for specific situations
Now, here’s the silver lining. Sending money back home becomes more beneficial for foreign earners since the value of their local currency strengthens with the devaluation of the rupee. Currency exchange works in your favour because foreign cash becomes more valuable when converted to rupees making it simpler to care for your family and eliminate your loan earlier.
Foreign currency exchanges possess benefits for you as long as you earn income in the stronger currency.
So, What Can You Do About It?
You can’t control the market. Let us provide the solution for smarter planning when dealing with foreign money transfers.
1. Unipay Forex’s payment service helps customers access top rates for their transactions
You will receive more favourable foreign exchange rates when transferring tuition bills or funding life costs using our services instead of traditional bank platforms. A small amount of 1 to 2 Rupees per dollar transferred can create substantial savings on big fund transfers.
2. Use advantageous currency exchange rates to secure them for future use
Using our forex services enables you to take advantage of favourable rates instead of dealing with unfavorable rates when you rush at the end. The exchange rate benefits help consumers save thousands of dollars.
3. Skip the Extra Bank Charges
Bank card payments along with wire transfers for transferring money abroad result in undisclosed fees. You see and pay exactly what you see when you use Unipay Forex’s services since there are no hidden costs involved.
4. Regular payments should remain under your complete managerial control
Our recurring expense management system enables you to handle hostel rent payments and food money transfers at a reasonable cost. The rates will not control your spending because you have full control over your payments.
5. Keep a Buffer
A slight emergency fund maintained within your account prevents sudden exchange rate changes from affecting your finances. The very small financial cushion provides major protections for your funds.
Why Students and Parents Trust Unipay Forex
Unipay Forex maintains a daily relationship with students as well as parents and financial consultants. The situation regarding funding education proves stressful to understand. Our service design provides you with stress relief through clear pricing structures and exceptional rates combined with human operator support at any time.
We simplify and protect money exchange transactions which students and parents use for admissions payments and student housing reservations and grocery expenses.
Final Thoughts
The decision to study abroad requires both serious financial commitment and critical transition. Changing currency values should not disrupt your study abroad goals. Knowledge together with suitable instruments enable students to reduce payment amounts by hundreds of thousands of rupees.
Unipay Forex provides you with a way to pay while making a shrewd financial choice. Each saved rupee becomes vital in covering costs related to education loans together with international expenses.
Do you require the transfer of upcoming tuition fees? We allow you to check current rates right now to observe the rate differences. We’re here to help you. Connect with us today to make wiser financial decisions.
