Currency Exchange Stress Hat
The Effects of Changes
When it comes to paying back your student loans in your home country, the exchange rate affects your monthly payments in two possible ways. If your loan is in INR and your income is in USD, even a small change in the exchange rates can make your payments go up by a lot.
Think about a student who has to pay back a loan of ₹40,000 INR every month. If you change 83 INR to US dollars, the student pays about $480. But they will have to pay back more than $500 if the exchange rate drops to ₹80. There are a lot of changes that happen in a year that add up to these numbers.
The Stress That Comes With Exchange Rates
Many foreign students have to "mentally convert" every job payment, grocery bill, and even a cup of coffee. This has two sides. It makes students more aware of their money, but it can also make them feel bad about spending money, which keeps them from fully enjoying their time abroad.
Getting rid of exchange rate stress
The following tips can help international students deal with problems caused by changing money.
a) Tools to Protect Your Exchange Rate
You can choose the exchange rate ahead of time for future payments with some banks and transfer services, like Wise, Revolut, and ICICI Money2India.
This means you can lock in the rate for future payments and not have to worry about quick changes that are bad for you.
b) Plan how to handle loan payments
If the exchange rate is good, pay more to avoid stress in the future.
Keep a small amount of USD in savings so that you can still make payments even if the exchange rate goes up.
c) Stop Going Too Far in Your Daily Life
To keep from worrying too much about the exchange rate, make a budget in USD (or the local currency).
Instead of focused on the rates, take a break and look at your money every month.
d) Think About Spreading Your Money Around
Keep some of your savings in your home currency so that you can pay back your loan.
This makes quick USD to INR conversions less important.
4. Change the Subject
Always remember that no matter what you do, exchange rates will go up and down. Focus on things you can control, like budgeting, building a buffer, and keeping up to date on important information without micromanaging, instead of letting exchange rates control your day and mood.
Ananya just recently noticed that the INR was getting stronger against the USD. To take advantage of this, she used Wise to pay off three months of her loan early. That way, she could handle the next change in interest rates.
