Welcome back to Loanflix. This 12th episode is titled ‘Education loan interest rate is Simple or Compound? : Are most of the lenders fooling you?’ Loanflix is the most comprehensive web-series on abroad education loans. The motive is to empower students and their guardians so that they can take an informed decision about the education loan
Are you planning to approach a private lender for your education loan? Or are you all set to grab and fill that application form to apply to one? Before doing so, have you done a thorough study of their repayment policies? Did it ever occur to you that they may be using the term 'Simple interest' as just a farce? If your answer to all these questions is ‘yes’ or if you are looking for general information regarding education loan interest rate, this 12th episode will be an eye-opener for you. The episode is shared at the end of this event description.
In this episode, Damini Mahajan, the Co-founder of WeMakeScholars and the speaker in this episode, explains the education loan interest rate terms of private lenders. She also uses the education loan interest rate policy of a major private lender, to demonstrate how they mislead many loan applicants. We discuss the following topics in this episode.
Simple Interest & Compound Interest
You often hear these terms when you search for education loans. In fact, interest rates are the most discussed factor by education loan aspirants. However, a little revision doesn’t hurt, does it? So we begin the episode by explaining these very basic but crucial terms.
Example of HDFC Credila education loan interest rate calculation
Do all private lenders reveal the truth about their interest amount calculation to you? While explaining their terms and conditions, Do their terms and conditions tell you all that is to be told? Do they actually calculate your interest on a simple interest basis? You will be in for a treat when you watch this portion of the episode. So don’t stop keep going.
Here’s the catch!
The education loan interest rate policies of one of the leading NBFCs in India is analysed here. Why do private lenders ask you to pay your interest partially? What exactly do they mean to convey when they say so? Is the term ‘simple interest’ misused repeatedly in their loan repayment policies? What are they not telling you? This section has answers to all these questions.
There’s More to it!
All the examples explained in the previous sections of the episode are explained assuming that the compound interest is levied on the principal amount, annually. But what if private lenders charge you with monthly compound interest? What would you do then? And the most important point of all being, will you even be aware of this? We give you an insight into the education loan interest rate policies of private lenders who charge you with monthly compound interest.
Who exactly calculates interest on the basis of Simple interest?
On reaching this point in the episode, we are sure you may have the same exact question in your mind. Our expert tells you who exactly does this with the help of an easy example.
So how do you make a private lender explain the exact details of their loan repayment policy? Damini tells you how. So do watch out for this part of the episode for the same.
We hope that the revelations made in this 12th episode will help you get an in-depth understanding of the education loan interest rate terms of private lenders. Now that you have a clear understanding of how they calculate your interest, here’s another thought- What do you do if you have borrowed an education loan from one lender and you wish to reverse your decision and proceed to apply through another lender? Know all about the actions you need to take if such a situation arises by watching the next upcoming episode, ‘Education loan takeovers’. Keep reading this space for more information on our upcoming episodes.
Date And Time
Timezone : (GMT+05:30) Chennai
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Damini is the Cofounder & CEO of WeMakeScholars.com. It’s a BITS start up supported and funded under the IT Ministry, Govt. of India. The organisation’s motive is to offer unbiased collateral/non-collateral based education loan support to students who are planning for studying abroad. As this initiative is under the digital India campaign, it's at free of cost. WMS works with 14+ banks (public/pvt) in India and help you get the best edu loan matching your profile.
Prior to launching WeMakeScholars, Damini had done her masters from the University of Sheffield, UK. Her education was funded under the Developing Solutions Masters Scholarship which covered her full tuition fee ($ 38,000). Damini is also a gold medalist in her Bachelors and also won the outstanding student award from the Vice president of India.
She was the speaker at TiECon 2016 at Silicon valley, San Francisco in the social entrepreneurship segment. She was also covered in the Asian Entrepreneur magazine in the “Women on Top in Tech”, a global series of Women Founders, CEOs & Leaders in Tech.