We wanted to write a quick post to let people know of their options when it comes to paying for educational (college) expenses abroad. Let’s just say that some of the things that we’ve seen being done are less than ideal.
Most people, however, choose to transfer money from India using either a bank-bank wire transfer or they simply purchase a foreign currency demand draft in India. This has been the standard practice and it isn’t a bad option overall. The only thing one needs to watch out for is to make sure that the bank that you’re dealing with provides you with a good exchange rate and doesn’t charge you too much on processing the wire transfer/ issuance of demand draft. With wire transfers there is the other unknown correspondent bank (foreign bank) charge that often comes as a surprise to most. These correspondent bank charges can be as much as $40. One should certainly check with the international banks for these charges before they send money from India.
Up until recently, these were the only options when it came to paying for foreign education costs from India. The newest and most preferred way to pay for foreign educational costs nowadays is to use a prepaid forex card. There are several reasons for us to make this recommendation. The first reason is that prepaid forex cards, being Visa cards, are generally accepted at all educational establishments when paying for tuition, housing and pretty much every other expense. Secondly prepaid cards end up saving you a lot of money in the long run. Let me break down this last statement for you. Prepaid forex cards have a one-time issuance fee, which is between Rs. 150 and Rs. 250. Prepaid cards are also valid for 5 years, which in most cases, is longer than the student’s study term and these cards can be reloaded anytime. Whenever the student abroad requires more money, the prepaid card can be reloaded for a small charge of Rs. 100 or so. In contrast if you were to send money from India using a wire transfer or by issuing a demand draft, you’d end up paying commission fees between Rs. 250 to Rs. 500 every time. Additionally you’ll also be charged a correspondent bank fee in case of a wire transfer. In case of demand drafts, you’d have to pay to mail the demand drafts abroad. In all cases, prepaid forex cards would end up saving you money. Additionally, prepaid forex cards are typically available at better rates than all other products including wire transfers and demand drafts. The last and probably the most important reason is that reloading prepaid forex cards is a breeze. All it takes is a phone call and you simply have to provide your card number and the card will be loaded in a couple of hours. In contrast, in case of a wire transfer or a demand draft, it can take 2 – 10 business days for the funds to become available internationally. One of the only scenarios where prepaid forex cards won’t do the job would be if the student were not present in India. In such a scenario, sending a wire transfer or buying a demand draft would be the only way to transfer money to the student.
Evaluate your options carefully the next time you need to pay for foreign college expenses from India.
I am Neha, an SEO Professional and finance writer. She has published articles in various finance blogs. She loves to write her own observations and experiences and she also wants to share her opinion. Currently, she lives in Delhi, India. Find best ways to send money from India and international money exchangers in Delhi, India. Follow me here Google Plus