How Lorien Finance is revolutionizing the student loan market with attractive interest rates and faster approvals
“Funding hurdles are preventing millions of Indian students from considering an education in the US. And the students who take out loans from Indian banks end up paying high interest rates and fees, affecting their ability to save money and access credit for other important life needs,” notes Nikhil MudgalFounder and CEO, Lorien Finance.
With 14 years of investment banking and lending industry experience in the US and European markets having worked at global banks such as Goldman Sachs, Jefferies and PNC, Nikhil founded Lorien Finance after addressing the challenges faced by immigrant students in securing and Student loan repayment had identified study purposes abroad. Lorien’s core team brings more than 40 years of experience in the global financial services industry, working as operators, advisors, lenders, risk managers and entrepreneurs. While Vishal MundraCo-founder and CTO, Lorien Finance leads product development at Lorien, Gaurav Arya leads India Sales and brings over 14 years of business development, strategy and operations experience in the Indian fintech space.
Lorien disrupts the status quo by combining its US funding ties with an understanding of Indian culture and financial risks. “Our mission is to make credit cheaper, more accessible and more transparent for students by connecting U.S. banks to student financing needs and privatizing credit risk while solving an important social problem,” says Nikhil.
What to expect for Indian immigrants
The annual spending of Indian students studying abroad is expected to reach US$100 billion by 2025, and the number of Indian students studying abroad is expected to reach 2 million by 2025. However, it can be very daunting for a middle-class Indian family to afford a US education. Therefore, most students opt for an education loan to fulfill their dream of studying at a foreign university or college.
Lorien Finance offers education loan to Indian students at interest rates as low as 8.5 percent so they don’t have to bear the burden of high monthly payments. In addition, it requires no collateral and does not charge forex conversion fees, prepayment penalties or hidden fees. Applicants can skip the paperwork and have their loans approved in three days thanks to their fast online application process.
“Our strong relationships with US banks and private credit funds allow us to raise capital on favorable terms, allowing us to offer our clients lower interest rates on student loans,” adds Nikhil.
Lorien’s underwriting model is progressive. Unlike other lenders who look to current solvency, Lorien looks at future income potential to underwrite and sanction loans. The company analyzes local credit history and alternative data sources to find multiple ways to prove creditworthiness.
Headquartered in New York and New Delhi, Lorien Finance differentiates itself from local banks and other lenders in the market exceptional customer care This makes obtaining a student loan extremely quick and hassle-free. It also offers price discounts to encourage and reward timely payments. The company has also eliminated the need for insurance compared to the 1.5 percent required by most Indian lenders. Students can also start building their US credit history as the loan is granted and repaid in USD.
Along the road
The platform received more than $75 million in loan applications within weeks of its launch and recently received the 2022 Global Icon Award for the “Best cross-border fintech platform‘ by the World Confederation of Small and Medium-sized Enterprises (WASME). After revolutionizing the Indian market, the company plans to expand the same model to other emerging markets such as Southeast Asia, South America and Africa.
Student loans and US bank accounts are just initial product offerings. The company has big plans for its future. “Lorien isn’t just a student loan company. Our vision is to become a neobank, offering our clients a full range of consumer financial services while working and relocating with families in the United States. We establish a banking and credit relationship with customers even before they enter the US,” says Nikhil.
The company is backed by prominent investors including Venture Catalysts, TSM Ventures, Kunal Shah (credit) Aman Gupta & Sameer Mehta (Boat), Brijesh Agrawal (IndiaMart), Varun Alagh (CEO, Mamaearth), Arjun Vaidya (Verlinvest), Dhruv Dhanraj Bahl (COO, BharatPe), Shiprocket Founder, Classplus Founder, Yaser Mussafa (CEO, NBK Capital – Kuwait) and John Werner (Ex-EVP, PNC Bank).