Want to study abroad, This startup helps students with collateral free study loans, Higher studies, Masters, PHDs , MS etc

Want to study abroad, This startup helps students with collateral free study loans, Higher studies, Masters, PHDs , MS etc

admin | 2021-07-07
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Want to study abroad,  This startup helps students with collateral free study loans, Higher studies, Masters, PHDs , MS etc 

Bengaluru startup Leap Finance helps Indian students who aspire to study abroad with credible guidance and low-interest rate collateral-free loans.

Many Indian students aspire to study abroad as the next step for their career growth. However, the lack of credible information on the application process and the high cost of loans act as deterrents.

To address these two specific challenges, two friends and IIT-Kharagpur alums Vaibhav Singh and Arnav Kumar decided to launch Leap Finance in 2019.

The Bengaluru-headquartered startup is an intersection between the worlds of fintech and edtech.

“We wanted to be the one-stop-shop for everything that a student needs to successfully move abroad,” Co-founder Vaibhav Singh tells YourStory.

Since their IIT-Kharagpur days in 2005, the duo had always remained in touch, working for multiple global financial corporations abroad.

Vaibhav returned to India in 2014 after realising he wanted to get into the entrepreneurial route. He worked with Capital Float and InCred and played a key role in growing their business.

On the other hand, Arnav plunged into the startup world with a few stints in a leading VC firm and a startup, which gave a ringside view of the startup ecosystem.

Pain points

While working with InCred, Vaibhav had insights into a whole new world of student loans. First, Indian students who went abroad for higher studies were paying higher interest rates on their education loans.

Second, students were dependent on multiple sources for getting all the information on the process of getting admission to a foreign university.

“An American student at Harvard borrows at around 4-5 percent, but the same for somebody from India is charged 12-14 percent on the education loan,” says Vaibhav.

This happens primarily because the student procures the loan from a bank in India at interest rates prevailing in the country.

“We realised that student loans should not be given in Indian rupees, but the currency of the destination country,” says Vaibhav.

Another hurdle was that Indian banks would typically ask for collateral for any student loan, which goes beyond Rs 15 lakh.

The second challenge was that the entire process of getting a college admission — normally a 9-12 month process — students typically depended on various service providers, which leads to inconsistency in the service quality.

Low-cost loans

As Vaibhav says, “We back the present and future potential of the students,” the startup’s first product Leap Finance provides 100 percent financing of education loans in US dollars and at interest rates much lower than those prevalent in India. Additionally, the startup does not seek any collateral for these loans.

The Bengaluru startup with an office in San Francisco, California, goes through multiple data points of any prospective student loan applicant, which includes academic history and work experience that cuts across over 300 data points.

Besides, it also conducts an outcome survey on what would be the likely future roadmap of these students.

Besides, Leap Finance also provides a US bank account, virtual debit card, student insurance, credit card, etc., which prove very useful for the students when they begin their student life in a foreign country.

“It is very important for a student that a credit history of them being built in the US rather than India,” Vaibhav explains.

The startup’s student loan ticket size is around $55,000, and repayment starts once the individual finishes the course. It has disbursed over Rs 500 crore worth of such loans across multiple universities and courses

Content Source : Your Story 

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