Back to School

Ajit Menon, an IIM-B graduate is working with an MNC. He is at the post of a regional sales head and the climb has been fast and hard.  But after being at this level for the last 2 years he feels that his career is stagnant.  Though he likes his job, he is ambitious for bigger things and wants a competitive advantage over his peers. Like Ajit, do you feel that your career graph is plateauing and you the next step up may be long way away?

The best way to give your career a booster shot is to go back to school. For the working professional, returning to academics is a great way of honing up skills and networking.

There are great choices in India but a foreign degree added to your resume will (literally) open up the world to you.

You can choose to study further in the field of your specialization or maybe explore new areas which have high growth potential.

The question at the top of the mind is how best to work out finances. If you are past your thirties you are likely to have some responsibilities like a home loan. You would also like to make sure that your family should not be deprived of any luxuries even for the period of your education.

A study loan often works out to be the most feasible way of financing your education. Some careful planning and voila! you will be ready to fly off to explore new paths.

Why take a loan?

Even if you have adequate savings, it may be wise to go in for a study loan to finance your continuing education. You saving and investments can continue their job of acting as a cushion for your family.

An education loan is widely available at banks at attractive rates. Banks infact prefer giving loans to individuals with work experience who would be able to pay off the loans quickly because of their higher start salaries.

What is the procedure to take a loan?

Most banks will provide you with an education loan for studying abroad. The amount prescribed by RBI is Rs.20 lacs for studying abroad. The rate of interest will vary from 11% to 16%.

The repayment period will typically start within 6 months of completing the education and the loan will have to be repaid within 10 years after finishing your education.

You will also be required to put in margin money of 15% of the loan amount…i.e. the bank will finance 85% of the loan.

Education Loan Comparison

There are several banks vying to give you a loan. At a glance the loan schemes seem to be similar since they are governed by RBI regulations. However the difference lies in the terms and conditions and the ease of documentation and disbursal. For instance the banks with the lowest rates may not provide you with the amount of loan you want. Or the bank with the fastest disbursal procedure may not have your institution of choice on their approved list. So you have to scout around and ask plenty of questions.

Tips for taking loans from Arun C. Vakil, Consultant and author of Gateway to America

• Do not over borrow. Make sure you are covered for the first year and look around for financial aid in the college.
• Look out for charges…guarantee charges, prepayment penalties, processing charges all add up to your cost.
• Choose colleges with wider acceptance as this will make your loan procedure easier. Many lenders have a list of approved institutions.

This article has appeared in Moneycontrol.com

Save money by cutting down your electric bills

Ever gasped at the huge electric bills that seem to climb up constantly. Your electricity bill is a recurring expense which could bring a substantial saving in your monthly budgeting.

Make a good choice in lighting

Lighting contributes to nearly 30% of the consumption of electricity and if we work at improving the lighting in our homes we can achieve a fair bit of energy efficiency.

Florescent light consumes much lower electricity than the bulb.  The newer innovation is Compact fluorescent lamps (CFL) which looks like a white bulb. They are long lasting and about 5-6 times more energy efficient than the regular light bulbs. Thus, using them in place of bulbs can result in substantial energy savings.

According to Bureau of Energy Efficiency (BEE) a 15-watt CFL produces the same amount of light as a 60-watt bulb.
BEE also rates CFLs with stars to show their energy efficiency. A 5 star rates CFL will gives out the best light per watt of electricity consumed.

Although a single CFL costs more initially, over the life of the bulb you actually save money. Here’s a comparison on the energy consumption to make you sit up and think before you buy a bulb again.

	CFL	Incandescent or Bulbs
Energy Input (watts)	13	60
Light Output (lumens)	810	830
Useful life (hours)	10,000	1,500
Electricity Used (kilowatt hours)	130	600

To make the most of the natural light available in your home, you need to know how to use it.

There are several ways to maximise your natural light. You can hang mirrors opposite windows. Take down unnecessary window dressings and replace with filmy materials, such as voile and muslin, to diffuse light. Trim trees or bushes that overshadow windows.

Cooling the bills

Cooling accounts for 11% of home energy usage, an Energy Star-rated cooling system can help reduce electric costs by hundreds of rupees. Don’t constantly move the thermostat up or down throughout the day because this wastes energy and money.

Consider setting the thermostat as high as comfortable in the summer.

Make sure your central air conditioning unit outside your home stays clean and free of debris.

Use ceiling fans to assist in cooling.  In the summer, blades should rotate counter-clockwise when viewed from below.

Make sure furniture and draperies are not blocking cooling outlets. Blocked outlets restrict air circulation, overwork the cooling equipment and increase operating costs.

The refrigerator

The refrigerator alone accounts for 7% of an average home’s total energy usage. What’s more, refrigeration efficiencies have come so far in recent years that anyone with a unit more than five years old should consider investing in a new refrigerator.

Defrost food in your refrigerator, this helps cool the refrigerator, easing energy requirements, and it is better for the food than defrosting in room temperature.  Keep refrigerator full so that it is cooling less open space (water jugs make good fillers).

This article has been written by me for MoneyLife magazine