BENGALURU:Year after year, we hear parents complaining about the increasing school fees. In fact, even those working in fairly good salaried positions as IT professionals, teachers, and MNCs are taking short-term loans of as low as Rs 50,000 to pay off school fees. Many of them, however, prefer to borrow from new-age fin-tech companies and startups rather than traditional banks. Less paper-work and quic approvals are seen as the reason for such a trend.
Take the case of Sheetal Jain, a teacher who just moved to the city from Delhi. Her daughter enrolled into class 11 of a popular ICSE school in central Bengaluru. “If my daughter was just transitioning from one class to another in the same school, expenses would have been far less. However, we were moving to cities so expenses to enrol in a new school was more.”
The total expenses at the school were Rs 3 lakh of which Sheetal borrowed Rs 2 lakh from a fin-tech company. “I had heard about such short-term loans from a friend and decided to give it a try. The loan was sanctioned within minutes and didn’t require me to step out of home. Had this not been the option then I would have to go to a bank and borrow the traditional way,” she says.
Another parent, Biplab Das, who works as a language specialist and translator at an MNC, and whose child studies in class 5 at a JP Nagar school, says, “I took a loan of around Rs 50,000. Rather than paying the fees at once, I would always prefer to pay it in EMIs which is more efficient and convenient for me. Education nowadays has become very expensive. In fact, as parents, we need to sacrifice a lot of luxury for the sake of our children. “
IT professional, Ajith Nayar, took a loan of Rs 1 lakh from a startup to pay off his class 8 child’s school fee. According to Ajith, availing short-term loans is a better option ‘because as a parent you have the ability to evaluate your financial capability and see whether you can afford to repay the amount on time.’ He also says that the interest rates for short-term loans are lower and the time taken to repay the loans is minimal. “You may incur higher charges but only for a short-term period rather than incur subsequently lower charges for a longer period.”
(*Names of parents have been changed on request)