How International Exchange Rates Affect an Overseas Education Loan

 Pursuing higher education in a foreign country is a dream for many Indian students. It not only gives you a chance to experience diverse cultures but also allows you to enter the world of endless opportunities in professional life. However, the large financial burden that foreign education comes with is among the major challenges. This is why many students turn to education loans for their studies abroad. It not only allows them to pay the hefty tuition fees but can also cover other expenses of living in a foreign country.

Currently, a number of lending institutions are offering quick education loans for studying abroad at low interest rates. There are several factors that can affect an overseas education loan, and the international exchange rate is one of them.

What is an International Exchange Rate?

The international exchange rate can be defined as the value of one currency in relation to the value of another currency. Generally, these rates are floating and can increase or decrease from time to time, depending on several factors. This is one of those factors that adds a layer of complexity to overseas education loans.

Exchange Rate’s Impact on Education Loan

Here’s a detailed explanation of how any changes in exchange rates can influence your education loan:

● Loan Amount: When you take an education loan to study in a foreign country, the calculation is often performed using the currency of that country. So, if you’re applying for a loan in India to pursue education in the USA, the exchange rate between the Indian currency and the USD will affect your loan amount. For instance, if the value of INR decreases relative to USD, you’ll end up paying more to cover the same amount of tuition fees.

● Monthly Payments: Every time there is some kind of fluctuation in the international exchange rate, the amount of your monthly payment will also get affected accordingly. Especially if the exchange rate between the currencies of your host and home country is highly volatile, it can significantly affect your EMI. 

The international exchange rate volatility is a major factor that influences overseas education loans in several ways. But there is no denying the fact that these loans are the easiest way to arrange funds for your foreign education. If you’re also someone who wants to apply for an education loan to study abroad, you can seek some professional help. Avanse Global Finance is a leading NBFC that offers quick and hassle-free loans for students and helps them prepare for their higher education abroad.