EduFund Blogs

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries  Let us talk about the flagship product – DSP Strategic Bond Fund.  About DSP Strategic Bond Fund  The investment objective of the DSP Strategic Bond Fund  The primary investment objective of the Scheme is to seek to generate optimal returns with high liquidity through active management of the portfolio by investing in high-quality debt and money market securities.  The investment process  of the DSP Strategic Bond Fund DSP Strategic Bond Fund invests in high-quality government & corporate debt securities. It is a highly liquid portfolio with actively managed portfolio duration based on future interest rate movement predictions (lower duration in rising interest rates market and vice versa).  Portfolio composition of DSP Strategic Bond Fund The portfolio major exposure of more than 30% in IND A1+ to maintain liquidity. The major instrument exposure is to Money market instruments at around 53%. Note: Data as of 31st Dec 2022. The pie chart shows the credit rating profile of the fund’s portfolio holdings. The bar graph shows the Instrument Break-up of the fund’s portfolio. Source: dspim.com  Top 5 Holdings for DSP Strategic Bond Fund Name Category Weightage % TREPS / Reverse Repo Investments / Corporate Debt Repo TREPS 15.22 HDFC Bank Ltd. Money Market 9.88 Bank of Baroda Money Market 9.88 ICICI Bank Ltd. Money Market  9.72 State Bank of India Ltd. Money Market 9.58 Note: Data as of 31st Dec 2022. Source: dspim.com  Performance over 15 years  If you would have invested 10,000 at the inception of the fund, it would be now valued at Rs. 27,389. This fund has outperformed the benchmark in all time horizons.  Note: Performance of the fund since launch. Inception date – May 9th, 2007. Source: Morningstar The fund has given consistent returns and is in line with the benchmark over the period of more than 15 years generating a CAGR (Compounded Annual Growth Rate) of 7.39 %.  Invest Now Fund managers  Vikram Chopra - Total work experience of 14 years. He joined DSP Investment Managers from L&T Investment Management. He has also previously worked with Fidelity, IDBI Bank, and Axis Bank Ltd.  Sandeep Yadav - Total work experience of almost 20 years. He joined DSP Investment Managers in September 2021 as Senior Vice President - Fixed Income Investments.  Who should Invest in DSP Strategic Bond Fund?  Investors who  Understand and trust the fund manager's ability to judge the direction of interest rates.  Recognize investing in longer-duration debt securities could generate higher returns but comes with higher interest rate risk.  Why invest?  Can help you navigate rising or falling interest rate scenarios.  Earn potentially better returns than bank FDs.  Horizon  One should look at investing and holding the investment for more than 3 years.  Investment through SIP (Systematic Investment Plan) or Lumpsum should both be okay as the NAV of the fund does not fluctuate much.  Conclusion  DSP Strategic Bond Fund invests in high-quality government and corporate debt securities. It is one of DSP's oldest debt funds with a 15+ years track record. Best suitable for people with either a short investment horizon. This scheme has generated returns that have beaten inflation and have performed much better than Fixed Deposits

HDFC AMC is the Investment Manager of HDFC Mutual Fund, the largest mutual fund in India, with over Rs 4 lakh crores as Assets under management. HDFC AMC has a diversified asset class mix across Equity and Fixed Income/Others.   Let us talk about the flagship product – HDFC Large and Mid-Cap Fund HDFC Large and Mid-Cap Fund  The investment objective for HDFC Large and Midcap Fund The Scheme aims to generate long-term capital appreciation/income from a portfolio of equity and equity-related securities of predominantly large-cap and mid-cap companies.  Investment process for HDFC Large and Mid-Cap Fund  This fund aims to invest in companies that are good at executing their operations effectively and are available at reasonable valuations at the entry point. The fund invests in the companies that operate in markets where the Total Addressable Markets (TAM) provide them the potential of being runways for growth.  Portfolio Composition of HDFC Large and Midcap Fund  The portfolio holds the major exposure in large-cap stocks at 56%. The major sectoral exposure is to Finance which is at around 25%. The top 5 sectors hold around 65% of the overall portfolio Note: The pie chart on the left shows the market cap composition of the equity portfolio and the bar graph on the left shows the instruments composition of the overall portfolio.  Data as of 31st Dec 2022. Source: Morningstar  Top 5 holdings in HDFC Large and Mid-Cap Fund  Name Sector Weightage % HDFC Bank Ltd. Financial Services 5.48 ICICI Bank Ltd. Financial Services 4.41 Infosys Ltd. Information Technology 3.46 State Bank of India Financial Services 3.20 Reliance Industries Conglomerate 3.15 Note: Data as of 31st Dec 2022. Source: Morningstar  Performance over 28 years  If you would have invested Rs. 10000 at the inception of the fund, it would be now valued at Rs. 2.70 lakhs.  Note Performance of the fund since launch; Inception date - 18th Feb 1994. Source: Morningstar  The fund has given consistent returns and has outperformed the benchmark over the period of 28 years by generating a CAGR (Compounded Annual Growth Rate) of 12.09%.  Invest Now Fund manager Gopal Agrawal: Collectively over 17 years of experience in Fund Management and 2 years in Equity Research.  Priya Ranjan: Collectively over 15 years of experience. Senior Equity Analyst and Fund Manager for Overseas Investments.  Who should invest in HDFC Large and Mid-Cap Funds?  Investors who are seeking:   to generate long-term capital appreciation/income.  investments in a mix of equity and debt instruments.  Why Invest?  The fund offers exposure to mid-cap for good opportunities for wealth creation.  At the same time, it offers large-cap diversification and steady portfolio growth.  Horizon  One should look at investing for a minimum of 5 years or more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  This is the oldest fund with a proven track record of 28 years and has delivered 12.09% CAGR consistently which is better than most equity funds. Thus, it is best for investors looking for a diversified portfolio with exposure to large and mid-cap for wealth creation as well as steady growth. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 lakh crore, the AMC is one of the most trusted names in the mutual fund space. The AMF offers products across asset classes.   Let us talk about the flagship product – the UTI Value Opportunities Fund.  UTI Value Opportunities Fund  The investment objective of the UTI Value Opportunities Fund The primary objective of the UTI Value Opportunities Fund is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies across the market capitalization spectrum.  The investment process of the UTI Value Opportunities Fund The UTI Value Opportunities Fund carries a blend of a top-down approach for sector concentration and a bottom-up approach for stock picking. It follows a barbell approach while picking stocks which means that it invests in those stocks that the market underestimates. Portfolio composition of UTI Value Opportunities Fund The portfolio holds the major exposure in large-cap stocks at 68% and sectoral major exposure is to financial services that account for roughly one-third of the portfolio. The top 4 sectors hold nearly 61% of the portfolio. Note: Data as of 31st Dec 2022. Source: UTIMF  Top 5 Holdings UTI Value Opportunities Fund Name Sector Weightage % HDFC Bank Ltd. Bank 9.63 ICICI Bank Ltd. Bank 6.98 Infosys Ltd. Information Technology 6.45 Axis Bank Ltd. Bank 5.19 Bharti Airtel Ltd. Telecom Services 3.86 Note: Data as of 31st Dec 2022. Source: UTIMF  Performance over 15 years for UTI Value Opportunities Fund Below are the rolling returns of the fund since inception. Note: Data as of 31st Dec 2022. Source: UTIMF  The fund has given consistent returns and has outperformed the benchmark over the period of 15 years by generating a CAGR (Compounded Annual Growth Rate) of 14.38%. Fund Manager Amit Premchandani: is the Senior Vice President and Fund Manager - Equity. He holds a PGDM from IIM Indore and a CFA charter from CFA Institute, USA. He has completed a CA from ICAI. He graduated with a Bachelor of Commerce in 2001 from Heramba Chandra College, Kolkata. Amit joined UTI AMC in 2009 as a Senior Research Analyst  Who should invest in the UTI Value Opportunities Fund?  Investors looking to  build their core equity portfolio with a good risk appetite.  marginally increase their risk spectrum with a concentrated sector allocation portfolio strategy.  Why invest in this Fund?  The fund emphasizes fundamental characteristics of the company such as return ratios & healthy cash flows.  The Fund has the flexibility to position itself more actively across the market cap spectrum.  Horizon  One should look at investing for a minimum of 5 years or more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The UTI Value Opportunities Fund is one of the oldest funds with a proven track record of 15 years and has delivered 14.38% CAGR consistently. Thus, it is best for investors who are willing to take some additional risk for good returns over a long-term spectrum. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

Do you consider saving for your child's education? Do you think you need to save more for your child's future? If ‘yes’ is your answer to both questions, you have come to the right place! This article will explain the reasons why every new parent should have an EduFund. Let us check out the top reasons why you need to start saving for your child's education. https://www.youtube.com/watch?v=u0MRtCeA2RU 1. No need to take money out of your retirement fund Maintaining separate funds for your child's education and savings is wise. One of the primary reasons is that you will not get loans to take care of your expenses after retirement. You may have to withdraw money from your retirement fund if you do not maintain separate funds. Your children are likely to get a loan to fund their education expenses. So, you must ensure that you and your partner do not depend on anyone after retirement. This is where an EduFund comes to the rescue. Find more about it below! Start Investing in Mutual Funds 2. Education costs will sharply rise The cost of education in India is increasing multifold. The rate of increment is higher than the inflation rate. As per reports, between 2008 and 2014, annual private expenditure for primary-level to postgraduate education increased by 175%. Technical and professional education increased by 96%. It is one of the reasons why new parents should have an EduFund. The educational expenses include transportation, books, course fees, coaching, and other costs. Parents spend 50% of their income on their children's education today. Compared to India's expensive and highly competitive educational landscape, abroad studies provide options to students. Considering only 10% of the inflation rate will cost you nearly double the amount after 20 years. No matter the destination you choose for your children's college education, the amount you will spend on the course fee will be pretty high. So, in considering these cases, an EduFund can come to your rescue. Apply for Education Loans 3. The competition will likely increase The competition for admission into the leading Indian or foreign colleges has always remained high. We all understand the importance of better education, so getting admission to the best colleges can be a little complicated in the future. With the increasing enrollment in higher education and the ever-rising population, the possibility of getting admission to good colleges has been declining. The marks allowed in 2000 for admission to a good college have increased significantly. If the number was 80% earlier, it has increased to 95% today. Imagine what is it going to be like in the future! Many people are competing for the same seats today. It is one of the primary reasons behind the trouble of getting admission to a good college in India or abroad. It calls for more tuition fees, hence adding up to more savings. What can be better than an EduFund in this case? This is why new parents should have an EduFund. Start Investing in US Market 4. Allow your child to be debt-free Educational loans are readily available from financial institutions and banks these days. They are attractive to various students who cannot afford higher education, particularly abroad. But, there is a disadvantage when it comes to education loans. They come at high interest rates. There are also collaterals attached to them. In such a situation, EduFund can help. Your children will not want to begin their career having a debt hovering over their choice of job. Job security is a far-fetched concept with the developing uncertainty in the job market due to the present global economic slowdown. No jobs that assure static security and income for paying off the education loan are available. So, what to do in such a situation? Choose EduFund! The first calculator for college costs in India can help you understand the amount you would need to pay for your child's college education. https://www.youtube.com/watch?v=30q9fjLitHM Getting admission into a college of your child's choice based on merit alone or with a scholarship will be more challenging than it was. Parents need to be ready to handle the competition. Today, new parents are already struggling to get their children admitted to kindergarten classes. The future could be much worse! Parents need to start planning right after childbirth. It calls for saving for children's education with the help of EduFund. When you begin college, you have the freedom of choice. You no longer need to bother about tuition fees. Having an EduFund for your child's education remains imperative to ensure a promising career for your children. Even if there is a change of career choice in your child's mind with time, you can be ready and adapt with the funds when needed. And, for that, you need EduFund. It is one of the best ways to save for your children's college expenses FAQs Why should new parents consider having an EduFund? An EduFund ensures that you don't have to dip into your retirement savings to fund your child's education, providing financial security for your future. Why is an EduFund essential for dealing with increasing competition for college admissions? As competition intensifies for top colleges, tuition fees and other expenses rise. An EduFund helps you financially support your child's education without compromising quality. How does an EduFund help with rising education costs? Education expenses in India are increasing faster than inflation. An EduFund helps you prepare for the significant costs associated with your child's education. How can an EduFund prevent your child from starting their career in debt? EduFund allows your child to avoid high-interest education loans, ensuring they begin their career debt-free, even in an uncertain job market. Why is early planning with EduFund crucial for securing your child's education? Early planning ensures you are well-prepared for the challenges of future education costs, offering your child the freedom to choose their career path without financial constraints. TALK TO AN EXPERT

Systematic investment plans, or SIP, are a great tool to invest. It has helped create a significant amount of wealth over time for many investors. Some basic investment plans have the potential to create substantial wealth over time. Three basic principles work in favour of a SIP -   The earlier you start investing, the more the return accumulates over time. This leads to more profits. This phenomenon is also known as the power of compounding in financial parlance.   Time plays a more crucial role in SIP than timing. The earlier you start, the more you make; the longer you remain invested, the more you gain. This phenomenon also supports why a regular SIP has a better wealth ratio than a step-up SIP. For our novice readers, step-up SIP is where you tend to increase the amount of SIP every year when your inflows increase.   An investor needs to remember two things to get the power of compounding. Firstly, leveraging the power of equities helps in the long run, and secondly, the accumulated profits should remain reinvested to reap further benefits. Can a small SIP of Rs 5,000 make a big difference?  Yes, very much! Even a tiny amount can make a huge difference. How much difference can a SIP of Rs 5,000 per month make to your wealth? The answer is that it can make a big difference if you continue the investment for the long term in a disciplined manner without withdrawing any investments and investing in a powerful asset class such as equities.   Now, the question is, how much wealth can be accumulated?   For the answer, consider the chart below.  How the monthly SIP of Rs 5K grow over 15 years Source: www.mutualfundssahihai.com  Source: www.mutualfundssahihai.com  As seen from the above chart, a SIP of Rs 5,000 can grow your wealth to Rs 33.43 Lakh in 15 years. We have considered the annual return to be around 15%.  15% may look on the higher side, but remember, when you have a long-term horizon, such as 15 years, you can avoid the conservative plan altogether. If you have a conservative approach with a long-term horizon, it is nothing but not utilizing the true potential of capital. Your risk appetite and investment horizon should trickle down to your expected returns. Also, risk appetite should be computed by taking into account the cash inflow, minimum essential expenditure, age, number of dependents, and the like.  How to choose the SIP instruments?  Once you have understood your risk appetite and investment horizon, you need to map the same with the funds. Equity funds are best suited for a horizon over five years, particularly the ones that invest in mid and small-cap names.   Team EduFund has mapped the ideal time horizon and risk levels for the different fund categories (refer to the table below). <1 year1 - 3 years3 - 5 years>5 yearsLow riskDebt: LiquidDebt: Ultra-short termDebt: Short termDebt: Long termHybrid: BalancedMedium riskDebt: Short termDebt: Long TermHybrid: BalancedHybrid: BalancedEquity: Large-capEquity: MulticapEquity: Large-capEquity: MulticapHigh riskDebt: Long termEquity: SectorEquity: Large capEquity: SectorEquity: MidcapEquity: SectorEquity: MidcapEquity: SmallcapSource: EduFund Research  Considering the same, let us see the corpus you may make when your risk appetite differs. Risk AppetiteInvestment categoryExpected returnsInvested amountExpected amountLow riskHybrid: Balanced10%9 Lakhs20.72 LakhsMedium riskEquity: Midcap12%9 Lakhs23.98 LakhsHigh riskEquity: Small Cap15%9 Lakhs33.43 Lakhs As seen in the table above, the returns are highest in the high-risk category, and even a small amount of Rs 5000 per month for 15 years could help you fetch nearly 4x wealth in 15 years.  Should you invest Rs 5000 in one fund?   The answer is No. If you do that, you will get into concentration risk where your capital will be invested only in one fund. Remember, you need to have a diversified portfolio to benefit from each of them and, at the same time, reduce the volatility at the portfolio level by having smaller portions in each.   You should select 1-3 funds to make it Rs 5000 per month.   At this juncture, let us introduce a very cool feature of your app EduFund - the Educases. The Educases in EduFund are devised to ensure you invest systematically over the very long-term/long-term/short-term/very short-term for higher education goals, short-term goals, etc. Besides, the investment strategies section also highlights the five risk profiles and accordingly recommends the funds for investment. The tool uses its proprietary AI-backed engine that goes through multiple permutations and combinations before throwing any funds that suit the investor best. Not to mention that every result is back-tested to ensure that the EduFund-recommended funds do a great job in outperforming the benchmark and inflation by considerable margins. The following are some of the funds recommended by EduFund that an investor could look at if they are willing to invest in the long-term and have a high investment horizon of 15 years and a high-risk appetite. The above-mentioned Rs 5000 SIP could be invested in the following funds to achieve 4x growth. Fund Name Amount Objective Canara Robeco Small Cap Fund 2500 The fund seeks to provide long-term capital appreciation by investing predominantly in small companies PGIM India Midcap Opportunities Fund 2500 The fund seeks to achieve long-term capital appreciation by investing primarily in equity and equity related instruments  Consult an expert advisor to get the right plan TALK TO AN EXPERT

An education loan is no longer a choice but a necessity for most students aspiring to study abroad. Although there are several financing options like banks, private lenders, and NBFCs open, it is not an easy feat to get the loan sanctioned. There are numerous criteria to meet that confuse the applicant.  In this blog, we will go through some of the important tips for maximizing your chances of getting approved for an abroad education loan so that the loan journey remains smooth, quick, and easy. 10 tips to consider before applying for an abroad education loans 1. Study courses and university  Financial institutions put a great deal of emphasis on the course a student wants to pursue and the university they have been admitted to. The most important tip for maximizing your chances of getting approved for an abroad education loan is that the study course should be accredited otherwise, the loan application can be rejected.  STEM courses like mathematics, engineering, and science have higher earning potential compared to arts, humanities, or commerce; hence the chances of a loan being approved are high. If you are considering the other courses, make sure you balance them out with a good and reputed university. It should be a top-notch place to study with a good reputation or ranking.   2. Academic history of the applicant Academic history matters as it will give a fair idea of the student’s capabilities, whether they are serious about their studies, and do they have the intelligence to get exceptional marks.  A student with consistently good grades has a better chance of loan approval than an average student or an applicant with an academic gap or backlog. Applicants seeking an overseas education should be serious about their studies from the word go, as it will improve their chances of loan approval.  3. Applicant and co-applicants age Financial institutions generally do not have an age limit for a secured loan, but for unsecured loans, the maximum age limit is 28 years. The co-applicant should not be close to the retirement age as lenders are hesitant in sanctioning them the loan. Applicants should be aware of the age criteria and apply for the loan accordingly.   4. Genuine and complete documents Fake or incomplete documents will result in the cancellation of the loan application; hence never try it. Read the guidelines carefully and submit each document as per the requirement. These include the loan application form, academic records and mark sheet, entrance test scores, address and identity proof like Aadhaar and PAN, admission letter from the university, and statement of costs.  5. Good CIBIL score CIBIL scores of the applicant and the co-applicant matter as a good score suggests that the previous loans have been paid on time and the chances of getting back the loaned money are high. A bad score means a delay in repayment or a cheque bounce. A good score will increase the chance of securing a loan; hence applicants should be conscious of maintaining a good CIBIL score from the beginning. 6. Too many loan inquiries are harmful Students should not apply to numerous financial institutions as they, in turn, inquire with CIBIL Agency which mentions the number of inquiries in the credit report. This has an impact on the CIBIL score; thus, the applicants must research beforehand and apply for the loan at the appropriate place and at the right time after going through all the pros and cons. 7. Must fulfill the income criteria Applicants must find out the minimum income required by the lender and then fill out the loan application; otherwise, it will be rejected.  8. The repaying capacity Lenders will look at the repaying capacity of the applicant and their total income. In case the loan is passed and is mid-way, and the co-applicant has lost or left their job, the loan can still get rejected. 9. Types of collateral  Financial institutions have a list that defines which properties are considered collateral and which are not; hence applicants must go through the list before naming that property as collateral.  10. Meet the set policy Every lender has a specific set of rules, and the applicant must go through them in detail and then fill out the form and submit the required documents.  Conclusion Lots of students apply for an education loan every year, but only a handful of them manage to get it sanctioned. In most cases, the applicants are not even aware of the true reason for the loan rejection. Knowing about the above-mentioned tips can maximize your chances of getting approved for an abroad education loan.  Reach out to the counselors or experts on the Edufund app for an abroad education loan, and they will guide you through the whole process in quick and easy steps. Consult an expert advisor to get the right plan TALK TO AN EXPERT

If you want to make the life of your child safe, secure, and rewarding, start investing INR 500 every month for the child as early as possible, say financial experts. Even a small amount of INR 500 will go a long way in creating a solid financial corpus if it is backed by good planning and a strong investment vehicle.  The right kind of investment is of utmost importance because it will safeguard the future interest of the child and lessen his financial burden. Best investment plan to invest INR 500 every month for the child Planning an investment of INR 500 every month for a child is a huge thing; hence investors need to consider many factors before finalizing the perfect investment vehicle.  1. Systematic Investment Plan or SIP Invest INR 500 every month for the child in mutual funds with the help of SIP, as the small amount will keep on adding and compounding to create a very large financial corpus. SIPs are one of the best vehicles because it encourages investing and saving consistently in a disciplined manner.  Start as early as possible because it will provide a large window for the fund to accumulate. For example, if the investment period is 20 years and the expected rate of return is 10% per annum, then a monthly sum of INR 500 can result in nearly INR 3,82,848.  Invest through the Edufund App, as it offers a choice from 4000+ direct mutual funds. It is easy to start and stop a SIP anytime you desire.  2. Direct Equity For investors who are not afraid to take high risks, the amount of INR 500 can be used to buy direct equity. Choose growth stocks as they will yield better returns (in the average range of 50%) than average equity, which is expected to yield a return between 13% - 15%. Remember, patience is the key to growth equity, and you have to remain invested for the long term to get solid returns.  3. Public Provident Fund (PPF) The PPF investments are for investors that do not want to take risks and are looking for safe investment vehicles. With a 7.1% interest rate, PPF is a long-term tax-saving investment scheme that can be opened in a bank or a post office.  4. Recurring Deposit Account The interest rate on recurring deposits is nearly 6.5% to 6.9% depending on the bank. The RD account can be opened in a bank or a post office where an investment of INR 500 will keep on accumulating and earning interest throughout the investment period. The RD account is for investors who want to keep their money in a safe environment and simultaneously earn some money. 5. Child Insurance Plans  Child Insurance Plans are some of the best vehicles to invest INR 500 every month for a child. There are child life insurance plans that can be paid on a monthly basis.  With an amount of INR 500, you can buy a term insurance plan that offers high death benefits.  Child investment plans are very advantageous because if in some cases the policyholder dies then the future premiums are waived. The insurance company then keeps on investing the premium amount on behalf of the policyholder, and the amount is given to the child as per the terms and conditions of the policy. Examples of child insurance policies with a premium under INR 500 per month are SBI Life’s Term Insurance Plan, where the minimum premium is only INR 365 per month, and the ABSLI DigiShield Plan, with a minimum premium of INR 477 per month.  If you have a girl child, then there are also several investment schemes just for the girl child. The government-backed scheme Sukanya Samriddhi Yojana was introduced specially to save the future of a girl child. You can invest INR 500 per month and the amount is payable after the maturity period of 21 years.  6. Stocks & ETFs Although stocks are considered risky, they have an advantage over some of the investment options, like recurring deposit accounts, because of high returns over a long period. ETFs are also high return cost-effective investment vehicles through which the investor can invest in entire sectors.  Conclusion Take a leap of faith and start the journey to invest INR 500 every month for the child because it will go a long way in creating a lump sum amount in later years.  Take the help of the investment experts on the Edufund app to create the best possible personalized financial plan for your child with an amount of INR 500. The strategies are backed by data, research, and appropriate tools like the investment calculator so that you will get better returns on your investment, and that too in a secure and transparent environment. Consult an expert advisor to get the right plan TALK TO AN EXPERT

A student loan serves as the ideal link between academic hopefuls and high-quality education, enabling them to get a desired university seat and realize their academic goals. It is wise to get an education loan, but it's crucial to make your payments on schedule. Even if getting the loan could be easy, if it isn't planned well, repaying it could be difficult. Strategies for repaying your abroad education loans 1. Pay the variable rate loans first It is advisable to pay off the variable-rate loans first when you have several student loans to repay, some of which have variable interest rates and others that have fixed interest rates. Even if the variable rate is now lower than the fixed rate, this is delicate and changeable. You can be taken aback if interest rates suddenly increase as a result of economic developments. 2. Think about refinancing your education loan You likely have debt in addition to your school loan. For instance, you can also be responsible for paying off a car loan. If so, you might want to think about refinancing so you can handle your loans more effectively. If a lender gives you a cheaper interest rate, you might look into refinancing your student loan.  Your payments won't be a hardship this way. Due to unforeseen circumstances, you could incur unforeseen fees when making your school loan repayments. Therefore, even a tiny amount of money saved from interest may make a big difference in your situation. Examine your refinancing choices, and if you find a better bargain, move your loan. 3. Choose the right repayment plan Choosing the appropriate education loan repayment plan is the best method to manage student debt. Your lender will offer you a range of repayment options. Choose the approach that best fits your budget. You must be informed of the duration of your moratorium. Before your first EMI is due, you will know how much time you have left to find employment and save money. Think about your anticipated pay from your first job as well. You may determine the appropriate tenure and EMI with the aid of all of this. Without such careful planning, you can end up selecting an EMI that is too expensive for you financially. 4. Get a part-time job while studying It is advisable to work a part-time job that fits into your schedule while attending college or a university to further your knowledge. Saving money from your part-time employment will significantly speed up the loan payback procedure. Students studying abroad are most affected by this strategy. 5. Buy an insurance Banks require a term cover or insurance in the borrower's name as part of their policy. To ensure repayment in the event of any interruption due to either natural or manmade causes, the risk cover should be equal to the loan amount. 6. Loan forgiveness programs The release of the borrower from the obligation to repay a loan is referred to as loan forgiveness, also known as debt elimination or forgiveness in the financial industry (or a portion of a debt). Although theoretically any student debt might be forgiven, student loan forgiveness typically only applies to loans issued or sponsored by the United States government. 92% of the nation's total student debt is comprised of these loans.  In other words, even though the loans are designated for students, the well-recognized forgiveness programs do not apply to any privately issued loans. Borrowers may be able to get their loans canceled or forgiven in specific circumstances. Loan forgiveness applicants must apply, and they might need to continue making payments until their request is approved. How to choose the right Education loan for higher education?  Research and thorough comparison are necessary while selecting the best education loan for higher education. Before choosing an Education loan, compare the interest rates and repayment options offered by several institutions. You may also get in touch with an expert. They can assist you in negotiating a lower interest rate and in organizing your repayment plan to help you save money. Before choosing to take out an education loan, ascertain how much money you require to fund your higher education. Our College Cost Calculator will help you determine how much additional money you'll need to live comfortably in your college city by providing you with information on the tuition and living costs there. When arranging the repayment of your student loan, keep in mind to account for all possibilities and outcomes to make the process simpler on both your wallet and your mind.  It may also be advantageous to invest to increase your current savings corpus if you haven't received a credit sanction yet and are still considering your ability to repay to minimize the amount of credit you require, which might then result in a shorter loan term or lower interest rate. Consult an expert advisor to get the right plan TALK TO AN EXPERT

In this blog, we will discuss how mutual funds work. Before we get into greater details regarding a mutual fund, we shall discuss what it is, followed by the types of funds and their operation.  What is a mutual fund?  A mutual fund is a professionally managed fund. It pools money from different investors, such as individuals, companies, trusts, etc. The corpus accumulated is invested in securities such as stocks, bonds, money market instruments, commodities, etc. While some mutual funds invest in a single type of security, others may have a combination of security types. The objective of a fund  One of the most important objectives of any mutual fund is to beat the benchmark returns and category average. A fund is aimed at generating alpha.  How does an investor earn through a mutual fund?  An investor invests in a mutual fund so that they can generate income. The following sources contribute to this income:  Divided payments – Dividend paid by the fund house  Capital gain – Gains accumulated by the fund upon the selling of any security  Net Asset Value (NAV) – When NAV increases, the investor benefits during redemption.  Types of Mutual Funds  There are multiple types of funds based on the asset class. The Securities and Exchange Board of India (SEBI) categorizes these:  Equity Schemes – These mutual funds invest in equities and equity-related securities.   Debt Schemes – This type of mutual fund invests in debt instruments  Hybrid Schemes – This type of fund invests in a mix of stocks and bonds Solution-Oriented Schemes – These are schemes with a specific goal. Example - Retirement fund  Other Schemes – This includes funds that are not covered above. For example, funds of funds.  How do mutual funds work?  Fund house collects money from investors. This fund is then invested in securities such as equities, bonds, etc. Investors get units of the mutual fund as per the amount they have invested.  Pictorially the entire process can be elucidated as under: Source: Corporate Finance Institute What is the cost of each unit?  The cost of each unit is determined based on the fund's total assets net of all expenses. Expenses include management fees, securities transaction tax, other taxes, and administrative expenses. When divided by the total number of shares, Net Asset gives per-share Net Asset Value (NAV).  How to invest in mutual funds online?  To start investing in a fund, you need to have a Permanent Account Number (PAN), a bank account, and be KYC (know your customer) compliant. You can purchase mutual funds through the following:  Directly with the fund house - You can invest directly with the fund house. This option is available both online and offline.  Through third-party portals – You can always invest in using third-party portals such as EduFund. These portals have tie-up with fund houses and offer an unmatched investing experience.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

One of the most complex problems might be taking out an education loan for overseas studies, primarily if exorbitant interest rates support it. Therefore, your priority should be to look for solutions that allow for fewer EMI payments and a cheaper interest rate before approaching a study abroad education loan. In this article, we'll talk about how to compare and negotiate with lenders over the conditions of student loans for international study. How to compare abroad education loans You may compare your student loans for international study from several lenders based on the following criteria: The rate of interest: ROI significantly impacts the overall sum you will have to pay back to the bank. Before you sign anything on the dotted line, examine the ROI since even a 1% change will significantly influence the amount of interest you pay overall. Additionally, students should determine if their ROI is fixed or floating. Moratorium period: Most lenders provide a moratorium period during which the student is exempt from loan payments. Compare the terms of the moratorium period carefully because they vary from lender to loan. Processing fee: Comparing the processing price is also a wise decision because a lender might impose a processing fee that ranges from 0% to 5% of the loan amount. Imagine obtaining a loan for INR 40 lakhs with a processing charge of 5% instead of INR 2 lakhs without a processing fee.  Penalty on prepayment: Another crucial comparison on our list is this one. On student loans, lenders impose prepayment penalties ranging from 2% to 4%. Knowing the prepayment fees can help students plan their repayments more effectively because many want to prepay their loan balance to prevent future interest costs.  Interest subsidy scheme: If the interest subsidy program covers the loans they are evaluating, students would also compare those loans. Loan tenure: The total interest paid to the bank would grow with a longer loan term. So choosing a shorter loan term would be the better choice. RBI Guidelines for Education Loans Read More How to negotiate the terms of abroad education loans from different lenders The following advice can help you bargain for a lower interest rate on your student loan: Build a strong profile: Your academic history and the institution you want to attend or decide to study at should be carefully considered if you are applying for higher education since they will significantly impact the interest rate. Try to maintain an attractive profile so that banks will be prepared to offer cheap interest rates on loans since they are confident in your ability to pay the money back. The major financial institutions for studying abroad consider your GPA, your GRE or GMAT score, your course of study, your level of study, your university, and the country where you will be enrolled. Please do your research: Before requesting a reduction in the interest rate on your student loans abroad from the bank, it is sometimes preferable to complete your research. Consider whether you can offer security or the income of your co-signer. You may also use factors like the length of your payback period to your advantage when negotiating interest rates with banks. Additionally, it's crucial to compare the interest rates offered by different banks and NBFCs and identify the lowest ones so that you may use their names to bargain with their rivals. There is a potential that you may prevail in the negotiation if your profile is impressive. Apply early: Before earning admission to a college, it is always advised for students with strong GRE scores to apply for study abroad education loans from banks. This benefits them by allowing them to evaluate other banks and provides them more time to bargain for a low-interest education loan from a foreign country. Applications for student loans abroad submitted at the last minute might have been a better option. Calculate the expenses carefully: Because the loan size can significantly affect the processing fees, it is crucial to estimate your costs before making any final decisions. You may also select an unsecured loan option if you correctly calculate your spending because they provide fewer loans. Balance Transfer: Sometimes, it makes sense to switch banks for your school loan since, after refinancing, the bank you would be moving from could offer you a cheaper rate, which might save you money. Additionally, you might need to transfer your mortgage in some circumstances, which could allow you to benefit from a cheaper interest rate. Most people take out their first loan before making a living for educational purposes. The borrower's credit history is significantly influenced by it. So, it is advisable to properly compare and negotiate the terms of your education loan TALK TO AN EXPERT

There are some key financial concepts kids should know because they will have a direct impact throughout their lives. These are life-changing lessons that help children to distinguish between wants and needs.  The practical aspect of finance is a topic that teaches kids about being responsible and managing money from an early age. Remember these are formative years and habits are often formed in the early years. Children who are aware of financial concepts and have even a basic financial understanding turn out to be better at managing their finances in later years. Financial concepts kids should know 1. Value of money The first financial concept kids should know about is the value of money. Parents try to fulfill their child’s wishes through the best of things that money can buy hence children often fail to grasp that money is hard-earned and not easily available.  Explain to the child that money has to be used properly otherwise it will be spent and there will not be any money left even for necessities. This basic lesson from childhood will stop kids from being extravagant at every turn.  2. Difference between need and want Start telling no to most of the demands and explain that money is limited and cannot be spent on every whim. Parents should make the child understand that there is a basic difference between wanting something and needing it.  Encourage your children to become financially sensible and not spend on whatever they want.  3. Savings The most vital financial concept kids should know about at all costs is the importance of savings in life. Start from an early age by giving them a piggy bank and encouraging them to save their pocket money. It is easy for young children to grasp the concept of saving hence keep explaining how money saved can be used later for important things. Saving is not only about money as you can make examples out of toffees or other things that your child likes. With time this will become a habit and the kids will learn to handle finance in a controlled manner.  4. Budget Keeping a track of your money and knowing when and how to spend it so that you have enough left for emergencies and savings is an important financial concept. Explain the idea of budget as it will help kids in planning finances and being organized.  Give the kids a fixed amount of money and small boxes or jars with labels like spending, saving, and even a charity jar where the children can distribute their pocket money for buying things, saving for a later period, and giving it out to the needy in respective jars.  This type of activity will help to budget and encourage them to save and spend accordingly.  5. Keeping track of spending Keeping track of spending is equally important as savings and budgeting. Encourage the kids to keep a tab of their daily spending by writing them down every day. Make sure that all the entries are recorded daily and totaled every week.  The practice of keeping a tab on savings will help children to understand expenses and adjust the budget accordingly so that they have enough left for the whole month.  6. Loan and debts Another financial concept that will help kids in the future is loans and debts and you can explain both quite easily. If your child is hellbent on something and he has spent all the money this is your golden chance to describe both concepts.  Remember borrowing money can lead to financial ruin so children should be aware of this life lesson from an early age. Never encourage children to borrow money even from their parents, siblings, or grandparents as it will become a habit and come back to harm them later on. As parents, you can educate how he can take a loan from you only this time to buy the desired item and how it will put the kid in debt. Explain that the original amount plus interest will have to be returned within a stipulated time frame and it will be deducted from his pocket money. Make sure that the interest amount is high enough to pinch him in the pocket and stop him from taking another loan from you quite easily. 7. Protecting key information Most people are handling money through technology via cards, ATMs, Apps or net banking, etc. Explain to your child the importance of keeping the information secret and not sharing it with anyone even if the person is very close.  Financial concepts kids should know in India Conclusion These are modern times where children often are techno-savvy from an early age so why not teach them about basic financial concepts? Sufficient knowledge about how to handle money, what is budgeting and what is the importance of savings can help to shape a kid’s future in the best possible manner

Every person should know about the basics of budgeting from an early age as these are life lessons that will always help you in real-life situations. The concept of budgeting is very crucial as it helps individuals look at their monthly incomes closely and create a clear action plan about the amount to be spent, saved, and kept handy for emergencies.  Having a deeper understanding of the basics of budgeting helps individuals to achieve their financial goals reasonably faster and easier compared to people who spend randomly without a concrete plan in place. What is Budgeting? Budgeting is a financial plan or a realistic report that helps to provide clear estimates of earnings and spending for a given period. Budgeting helps to address an individual’s financial situation, see the difference between needs and wants, and create an action plan that will help him reach financial goals and stability. What are the 7 steps of budgeting? Step 1: Know your “take-home” pay The basics of budgeting start with knowing what your “take-home” pay is. This is the monthly amount you receive after paying off the taxes. Once you identify the amount you have in hand it becomes easy to lay the groundwork for the spending and savings. Salaried people generally have a fixed income whereas self-employed individuals with inconsistent income must look at the lowest monthly income they have earned in the last year and use it as a base for the monthly budget plan.  Step 2: Choose the budgeting strategy There are several ways to budget but one should always choose the budgeting method that suits his personal needs and requirements and will work for him the best. If you are new to budgeting then choose the simplest basics of budgeting method “50/30/20 strategy”.  The “50/30/20 strategy” requires you to divide your income into three segments 50% for needs, 30% for wants, and 20% for savings.  The needs refer to necessities like food, rent, transportation, car payments, daycare expenses, child support, student loans, medications, repairs, credit card payments, and utilities. Wants are expenses incurred for vacations, shopping, entertainment, dining out, and savings to the money deposited for a retirement fund, education corpus, or debt payoffs.  Contact the experts on the Edufund app to create an effective budgeting strategy that will meet your needs and help to save for a retirement fund or create an education corpus for your child. Step 3: Set aside for margin of error It is not easy for every person to stick to the budgeting plan and keep track of spending religiously. Individuals should set aside some amount for error every month as it will give flexibility and serve as a breathing space in the budget.  This does not mean that you have the luxury of overspending every month hence make sure that you do not have to use that amount until it is necessary.  Step 4: Set automated savings Once you start paying for your needs sometimes it becomes difficult to put aside an amount for your savings. Set up automated savings so that as soon as the monthly salary cheque is deposited the required amount is transferred automatically from your bank to the savings schemes.  This budgeting method is best for people who consider savings as their priority. It is referred to as “paying yourself first” and helps individuals save the required money even before they start spending on the necessities.  Step 5: Use professional help or a budgeting app Use a budgeting app or professional help like the ones provided by Edufund App if you are finding it difficult to create a budgeting plan. Step 6: Track your progress Budgeting is nothing but a spending plan that helps to keep things in perspective. The method encourages you to divide your money based on requirements at the forefront so that everything can go as per the plan and there is no overspending.  Knowing about the basics of budgeting will make the road to achieving your plan easier hence track your progress diligently to see what is working for you and where you are struggling. At the onset, it is better to keep track of your expenses daily and gradually to weekly or to a 2-week.  Keep yourself in check by spontaneous assessments so that there are no goof-ups. Once your budgeting is on track you can shift to longer intervals.   Step 7: Assess and adjust Nothing is fixed in life hence give yourself room to assess and adjust if things are not going as per the plan or if there is a change in your income or expenditure structure.  Conclusion When you have a grasp on the basics of budgeting then it will help to take a systematic approach to monitor and control finances and reach your financial goals easily and much faster. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Education is the birthright of every child, but how many children can afford it in these turbulent times when education costs continue to rise? Gradually getting a good education is becoming a dream that only the upper-middle class or rich people can afford.  So, what happens to the students from lesser backgrounds who want to break the shackles of poverty through education? Well, building an education fund is an ideal option, but if they can’t reach their goal in time, an education loan is a great option. It can be repaid slowly within a stipulated time frame.  Leading government and private banks, cooperatives and NBFCs are offering loans at reasonable rates; hence it seems sensible to apply for it especially when the terms and conditions are aligned with your interests. Average education loan rates The average education loan rate in India is 11% if the student wants to study here. It increases to 12.5% if the student is interested in attending a foreign university.  Education loan rates Comparing the top education loan offers in India in 2023 The Reserve Bank of India in September 2022 hiked the repo rate to 5.9%, which resulted in an increase in ROI on loans. Let us compare the education loan rates in India of some of the public as well as private sector banking institutions to get a clear picture of the type of plan that will suit your personal preferences NameNational InstitutionsROI (%)International Institutions ROI (%)Processing FeesPunjab National Bank8.65% - 9.90%10.65% - 11.40%Nil – 1%State Bank of India7.95% - 10.55%10.55%Nil – INR 10,000Axis Bank13.70% - 15.20%13.70% - 15.20%Up to 2%Bank of Baroda10.50% - 11.85%10.25% - 10.90%Nil – 1%ICICI Bank9.5% onwards9.5% onwardUp to 2%Bank of Maharashtra8.85% - 10.70%10.35% - 10.70%Nil – 0.50%Federal Bank11.95% onwards11.95% onwardsNABank of India10.45% - 11.25%As ApplicableNil – INR 5,000Canara Bank8.8% - 10.80%10.40% - 10.90%0.50%Kotak Mahindra BankUp to 16%Up to 16%NA How do banks calculate education loan rates in India? Education loan rates of the lending Institutions depend upon several critical factors. These are- 1. University If the college or university that the student is getting admitted to has a record of good placements, then most banks would be willing to sanction loans at a lower interest rate. 2. Academic record The academic record of a student matters a lot because if a student has been able to maintain very good grades throughout their academic career, the chance of getting a loan at low-interest rates becomes high. If the record is average or below average, the chance of loan approval becomes less, and the rate of interest will be comparatively higher. 3. Collateral Secured loans or loan applications where the applicant can provide collateral have lower ROI compared to unsecured loans without collateral.  4. Credit score of the co-borrower If the co-borrower has a low credit score, then the chance of the loan application being rejected or an increased rate of interest becomes high, whereas a good credit score will secure the loan quickly at low interest. Education loan through the EduFund app Edufund is one of the leading apps that helps students with easy education loans. Students can access loans up to an amount of 1 crore to study in either India or a foreign university. The service is free, and there are no hidden charges that can later come to haunt you.  Through the Edufund App, you have direct access to its NBFC partners and banking institutions like Axis Bank, HDFC Bank, MPower Financing, ICICI Bank, etc., so that the loan approval process becomes quick and easy.  The best thing about getting a loan through the app is that collateral is not needed for loan amounts up to INR 75 Lakh. The icing on the cake is that the higher the amount of the loan, the lower the interest rate you have to pay.  The education calculator on the site is a blessing in disguise as it helps to calculate the required sum with some simple steps within a few seconds. Income Tax benefit on education loans Applicants should know that the interest amount and not the principal part that an individual pays on an education loan can be claimed as a deduction under Section 80E of the Income Tax Act of India 1961. The exemption is for a maximum of 8 years or till the date when the interest is paid, whichever is earlier.  Conclusion It is vital to know about the education loan rates in India to make comparisons and understand where to apply and how to get the minimum rate of interest on the loan amount. TALK TO AN EXPERT