Education loan is a powerful tool to help realise a student’s dreams: Prashant A Bhonsle, Kuhoo

Gone are the days when one had to stand in long queues in banks to obtain loans. Online lending platforms have now made it possible for consumers to obtain loans through apps in just a few clicks and in a matter of minutes. Furthermore, various studies have stated that the usage of loan lending platforms may have seen an uptick post pandemic as the public became a lot more comfortable and well versed with technology in general during the period. In the same vein, Prashant A Bhonsle, founder, Kuhoo Fintech recently spoke to Dataquest on the benefits that education loan platforms have to offer.

DQ: How has the trend of borrowing loans changed after the pandemic?

Prashant A Bhonsle: Pandemic adversely affected economic growth of most of the countries across the world. Middle class and lower income families faced the biggest brunt of this once in 100 years health & economy crisis. As the demand of product and services went down because of lockdowns, small businesses in tier 2, 3 and 4 towns got the worst affected. The gap between income and expenditures increased drastically, people cut their discretionary expenses. However, the requirement of loans for education has gone up post pandemic.  

In many ways, pandemic has changed the education world too: 

• People have adopted to technology and developed their comfort and ease with studying online.
• There is a dramatic change in perception where distance learning or virtual courses stood second to in-person education earlier, it has become acceptable for mainstream learning.
• The pandemic made the uncertainties of the world more real and made people think of fortifying themselves by upskilling or diversifying their skills.
• Governments and companies have spent heavily to erect a robust and secure technology infrastructure. People have developed better familiarity with undertaking financial activities online.

Over the last two years, there’s an increasing appreciation that an education loan can be a powerful tool to help realise a student’s dreams. One needs to consider some important factors of student loans before choosing the finance partner.

DQ: What are some of the benefits of online student loan platforms?

Prashant A Bhonsle: Some of the benefits that student loan platforms offer are as follows: 

• Quick and online Processing:

Every student and their parents have 2 fundamental questions that needs to be answered immediately when they are planning the higher education expenses:

1. Will I get a student loan?
2. How much loan will I be eligible for?

Most banks and NBFCs take a few days to weeks to answer these questions and that makes it difficult for students and families to do right financial planning. The online student loan platforms offer a quick eligibility check in a matter of minutes which allows students to look for other options in case they are not eligible or getting a lesser than required amount of loan. Also, students can upload all the required documents sitting in their colleges or home through these online portals. It saves much time as they (& parents) do not have to take leave from college or work to visit branches multiple times

• Real time status of your application

Online student loan platform give real time status of the loan application and keeps the students and parents informed about the process and time required 

• Flexible repayment options

Unlike banks and NBFCs, Online platforms not only provide flexibility in repayment but also give digital payment options for students to repay their interest and EMIs. In fact, the innovative products of online portals allows partial repayment of simple interest for families of students who can not afford to service the simple interest during their course of study

• No requirement of parents as co-applicants for some products

Online student loan providers have introduced a product that does not require parents to be the co-borrower in the student loan. These domain experts give importance to the student’s potential instead of evaluating the parents income for approving student loans

• Better after disbursement services

There are many service requirements after the loan is approved and disbursed. These include Pre EMI and EMI modification during and post the course, contact address changes, interest certificate, part pre payment and early closure of loan etc. A lot of these services can be done online through these new age platforms and students and their parents can save time

• Up to 100% funding

While Banks usually ask for margin money before they disburse the loan, some of these online portals are the experts in providing student loans and they provide up to 100% costs of education that includes tuition fees, along with living expenses such as hostel, food, travel, books, tutorials etc. 

• No requirement of collateral security against loan for good students

For higher amounts of student loans, banks generally require the family to give property as security/collateral against the loan. However, the new online players can extend loans up to Rs. 50 or 60 lakhs without any security from the students and their families

• Good deals on other products like insurance and forex

Some of the online players collaborate with other fintechs in insurance and forex companies and give best deals on these bundled products

In many cases when parents do not have adequate savings and assets to support the cost of higher education, students have to drop their dreams and they continue their work life without reaching their highest potential. Lack of financial support is the biggest impediment in the path of capable and talented students towards greater success and prosperity.

Emergence of the online student loan platforms is the beginning of new possibilities for hundreds and thousands of Indian Students. 

These new age fintech companies are focusing on developing products and services keeping in mind the needs of students. The online loan platforms are technology driven in their approach and operations.  

DQ: How is Kuhoo planning to make loans accessible to students faster through business processes and technology?

Prashant A Bhonsle: Kuhoo's ideological inclination and targeted focus towards using technology for suiting customer needs and requirements makes it an ideal financing partner for students. 

Kuhoo is using their expertise to analyse hundreds of courses, their respective job demands, probable salary benchmarks and the consequent earning potential etc. Using this data, kuhoo has developed advanced underwriting models to ensure quick processing of loan applications. Kuhoo has created technology applications that ensure seamless customer experience, reduced lag time and efficient loan servicing. 

DQ: What is the competitive advantage that Kuhoo has to offer?

Prashant A Bhonsle: Keeping the students’ needs and conveniences at forefront, Kuhoo is providing easy loans through a start-to-finish online application journey with quick disbursals in less than a month  . It  is  developing curated products for different segments and requirements. By utilising its data driven insights and intelligence, Kuhoo offers loans without collaterals or co-borrowers which is a significant step towards helping students become Atmanirbhar - self dependent. 

When a student manages to get a loan approved on their own academic prowess and future earning potential, it gives a big boost to their self confidence. It helps them recognise and own their responsibility to persevere and  work harder towards achieving their goals.