GradRight: A Global Fintech PlatForm From India For The World
In an exclusive interview with Outlook Money, Aman Singh & Sasidhar Sista, Co-founders, GradRight demystify financing for higher education abroad.
Tell us about the education loan landscape in India.
- Since 2001 when India started education loans the loan book has increased 60 times to INR 60,000 crores in 2020 at a CAGR of 22%.
- While some public sector banks have struggled with high NPAs because of government mandates, the private sector has thrived.
- A leading private lender started in 2008, has grown at 66% CAGR to build a loan book of more than INR 60,00 crores.
- With the expected increase of Gross Enrollment Ratio from 25% to 50% over the next decade, coupled with the increasing cost of higher education our outstanding loans may rise to INR 3 lac crores.
- There are significant opportunities in this sector if you notice the number of new NBFCs entering the space and the increased VC participation in the last five years.
What is the ideal approach to taking an education loan?
- Start with a real education budget that should account for the total money students can spend from savings, plus education loans.
- If the budget estimate is too high, a student will end up with a university that she cannot fund, too low and it may lead to the student missing out on choosing a better university for her career.
- Then estimate the total cost of the program including tuition fees, living costs in the city the college is located along with expenses such as the cost of books, electronics, initial room set up, local trips, health insurance, airline expenses, visa application, health check-ups, university applications, and counsellor fees.
- In the U.S. the living cost in New York is nearly 1.5 times the living cost in Philadelphia.
Parents occasionally underestimate the cost by INR 10-15 lacs.
- Remember to analyze college choices based on true return on the program from a financial lens and avoid being driven by biases, peer pressure, and hearsay.
- Be careful in evaluating placement statistics that may not be a true indicator of their earning opportunities.
- Students can schedule a free call with a GradRight financial advisor to get the right estimate.
How can a student get the best education loan?
- Without GradRight, loan application and approval can take 7 days to 2- 3 months, depending on the lender, processing of collateral, and the time required for the follow-up.
- Start the loan process in advance, preferably immediately after getting test scores.
- Various types of loans are available with differing interest rates and payback times based on academic profiles and parents’ financial profiles.
- GradRight’s FundRight is the World’s first student loan bidding platform where 12 public and private, domestic and international banks and NBFCs compete transparently to offer the best education loan based on their credit policies, student profile, and college choices.
- Students complete their entire loan process online and get the best loan for their profile.
What are the insights that one can use to get the best deals?
- Taking care of some nuanced factors can contribute immensely to getting an awesome loan.
- Students with test scores (GRE, GMAT, SAT, TOEFL, IELTS) are three times more fundable. Each bank recognizes a set of global universities for their placements.
- Sometimes, even with an average score, students can get a great admit and thereby, a good loan.
- Banks prefer the US, and Canada the most.
UK, Singapore, Australia, Germany, and Ireland are also considered positively.
- The maximum unsecured loan amounts one can get will vary based on the country you choose to study in.
- Parents’ credit or financial discipline will have an impact on what you can get as an education loan, as most of the lenders will ask for them to be co-applicants.
- Having too many active EMIs will also deter banks.
- Our SelectRight platform can help students choose the most bank-fundable universities for their unique profiles.
What is your mission at GradRight?
- Our vision is to build the leading education fintech company dedicated to making education accessible and affordable.
- Our mission is to enable students to maximize their Return on Education(RoEd) by ensuring that they can study at the Right College at the Right Cost.
How are you adding value to the banks?
- “We are very glad that GradRight has picked up really fast. In 2020, GradRight was one of the first partners we signed up with for one of our new initiatives. Fast-forward to today, GradRight is among our top partners. I’m very happy with how our relationship has developed with our combined vision of helping out students & being an instrument of change in their lives.” – Mayank Sharma, Country Head, Prodigy Finance.
- GradRight is already the preferred sales and service partner for all its lending partners.
- Since the launch of FundRight, only 10 months ago, we have received INR 2500 crores in loan requests and helped secure close to INR 400 crores in loan approvals.
- Banks attribute GradRight in helping them find exceptionally fundable students in one place and cut up to 75% of the cost of sales and pre-disbursement services.
- With a first principle approach, GradRight created an education loan journey for banks and students that drove up the approval rates for banks and created unseen access to high potential students across hundreds of Indian cities and towns at once.
How are you adding value to the students?
- “Anyone considering graduate student loans should seriously check out GradRight. Seeing a bevvy of options from different banks laid out so comprehensively and conveniently was a huge source of relief and led me to options I would not have found otherwise!” -Raghav Adlakha, Alum, Harvard Kennedy School.
- With GradRight’s FundRight, students have saved INR 30 crores in interest expense to date.
- We are making higher education financing more accessible. 80% of our students come from 2000 plus, Tier 2 and 3 cities of India with limited access to education loan options.
- We have increased the chances of securing a loan by 500% by bringing all the top education loan providers on one platform.
- With GradRight students are choosers and not beggars for financing their higher education.
All this is possible because of the commitment of our Student Success team led by our colleagues Shivani Mani, Hasil Gora, Prachi Singh, Aayush Nagpal, and Lovish Rawal.
- “There’s information asymmetry in the student loan market in India. The loan journey hence becomes overwhelming. At GradRight, the Student Success team is driving rational program choices, financial awareness, and well-negotiated loan decisions/terms for our students. We want to make them feel comfortable with the loan choices they make alongside GradRight.” – Shivani Mani, Student Success
What are your future plans?
- To power students’ financial transactions, we will soon launch, World’s first student-centric score, GradRight Credit Rating API. This will unlock the next level of efficiency and value for all stakeholders in the ecosystem.
- We will scale up FundRight in India and expand our services in Asia and the Middle East.
- SelectRight will be a game-changer in the sector and will enable students to make better decisions on selecting high return programs.