Case Study Overview

A borrower with an education loan from Avanse Financial Services successfully navigated a two-stage refinancing process to reduce their interest rate from 13% to a fixed 6% APR. With ₹57.58 lakhs outstanding, the loan was first moved to MPOWER Financing, then- after a deliberate four-month credit-building period- refinanced again to KeyBank. The entire journey was completed in approximately five months, unlocking an estimated ₹20 lakhs in total repayment savings.

Student Financial Profile

Problem Statement

A High-Cost Existing Loan
The borrower was carrying an education loan from Avanse Financial Services at 13% interest- a significant rate given the scale of the outstanding balance and the borrower’s stronger financial standing since after the loan was first taken.

Substantial Outstanding Balance
With ₹57.58 lakhs still to be repaid, even a moderate reduction in interest rate would generate meaningful savings over the loan tenure, making refinancing a financially compelling priority.

An Opportunity Worth Acting On
The borrower’s full-time employment, $100,000 annual income, and H1B visa status created a strong profile for US-based lenders – but realising the best possible rate required a carefully sequenced approach rather than a straightforward single-step transfer.

Solution

GradRight determined that reaching the most competitive rate available would require two deliberate moves rather than one. The strategy was designed around the borrower’s need to first establish a US credit footprint before qualifying for the lowest fixed rates offered by domestic US banks.

Phase 1 – Avanse Financial Services to MPOWER Financing The loan was transferred from Avanse Financial Services to MPOWER Financing and completed within one month. This immediately brought the interest rate down from 13% to 9.99% APR, with a processing fee of 6.5%.

Phase 2 – MPOWER Financing to KeyBank
After a four-month waiting period to allow the borrower’s US credit history to build, the loan was refinanced a second time – from MPOWER Financing to KeyBank. This delivered a fixed interest rate of 6% APR with zero processing fees, the strongest outcome achievable for this borrower’s profile.

Old Loan → New Loan

Old Loan

New Loan

How Did GradRight Help?

Facilitating the First Transfer
GradRight managed the full process of moving the loan from Avanse Financial Services to MPOWER Financing – handling lender coordination and ensuring the transfer was completed within a month.

Strategic Credit-Building Advice
Rather than rushing to a second refinance, GradRight advised the borrower to wait four months, allowing the US credit history established through MPOWER to mature and qualify for significantly better terms.

Securing the Best Final Rate
Once the credit-building period had passed, GradRight facilitated the second transfer from MPOWER Financing to KeyBank, locking in a fixed 6% APR with no processing fees – the optimal outcome for this borrower.

Results

Interest Rate Cut by More Than Half
The borrower’s rate dropped from 13% at the start to a fixed 6% APR by the end- achieved through two carefully timed refinances over approximately five months.

Estimated Savings of ₹20 Lakhs
On a refinanced amount of ₹57,58,269 over an 8-year tenure, the two-phase strategy is estimated to save the borrower approximately ₹20 lakhs in total repayment costs.

A Zero-Fee Final Refinance
The move to KeyBank in Phase 2 carried a 0% processing fee, ensuring the borrower captured the full financial benefit of the lower rate without absorbing additional costs.

Tax Benefits Now Available
Following the refinance, the borrower became eligible to claim tax benefits on the loan – an added financial advantage beyond the interest rate reduction itself.

Completed in Approximately Five Months
From the initial transfer out of Avanse to the final settlement with KeyBank, the entire two-phase journey was wrapped up in around five months – a swift and well-executed outcome for a process of this complexity