The total cost of studying abroad includes tuition fees, accommodation costs, travel expenses, and much more. All of these expenses combined can make it difficult for students to afford their studies without financial support. Fortunately, there are several options available to help international students finance their education.
One option is taking out an international student loan. International student loans are designed specifically for students studying outside of their home country.
In this article, we’ll share everything you need to know about study abroad loans, from what they are to how they work.
So if you are already studying in the U.S. or Canada – or are hoping to fund your study abroad dreams – this article is for you.
What is an international student loan?
An international student loan is a type of loan specifically designed to fund educational expenses for students studying abroad. Depending on the loan and where you’re studying, these loans can be used to cover tuition fees, living costs, and other related expenses – such as textbooks, health insurance and travel.
If you are facing a lack of funds to cover your expenses, this type of loan can make up for the shortfall or even provide complete financial coverage. International student loans are available to both undergraduate and graduate students who are studying outside of their country of origin, but different loan providers set their own acceptance criteria, so you will need to check your eligibility with the lender you’re considering.
How does an education loan work?
International education loans are simply loans that are taken out to cover the cost of studying abroad. The loan amount is determined by the student’s individual financial needs and could be used to cover tuition fees and other costs associated with studying abroad, depending on the lender.
The repayment terms of international student loans vary widely from one lender to the next. It’s important to do thorough research when comparing lenders – including repayment and the items mentioned below.
Private loans for international students
As you can guess by the name, private loans are provided by private lenders such as banks, credit unions, and other financial institutions. They usually have higher interest rates than government-backed loans, but they may offer more flexibility with repayment terms and loan amounts.
You might need to have a cosigner to take out a private loan, and the interest rate will depend on various factors as determined by the lender. It is important to read the terms and conditions carefully before taking out a private loan.
These loans can often be used to cover tuition fees and other related expenses such as travel and accommodation.
Something to consider with a private loan is that the repayment of the loan will usually start when you take it out – meaning that you will have to make repayments during your studies and continue after post-graduation until your loan is repaid.
How to apply for a loan
Applying for an education loan is relatively straightforward. Most lenders will have an online form that you can fill out and submit with the relevant documentation.
The lender will then review your application and, if approved, you will receive a loan agreement outlining the terms and conditions of the loan. It is important to read through the agreement carefully before signing it.
Depending on your financial position or the lender’s requirements, you might need a cosigner to take out a loan. The cosigner will be responsible for the repayment of the loan if you are unable to make payments.
To be eligible for a loan, you will usually need to provide evidence of your financial status and other documents and qualifications. You will usually need to obtain a letter of acceptance from the institution where you are planning to study.
To pay for the cost of attendance and other related expenses, international student loans are a great financial resource. With the right loan and repayment plan, you can pursue your studies with minimal financial worries.
How to get the most out of your international student loan
Now that we know one or two things about international student loans, let’s look at how you can get the most out of your loan.
1. Only take the amount you need
You have to remember that an international student loan is still a loan which means you will need to pay interest and the original amount you borrowed. So, only take the amount you need. Use the loan amount only to cover the difference between your available funds and your tuition fees, living expenses, and other costs associated with studying abroad.
2. Look for flexible repayment terms
Look for lenders who offer flexible repayment plans (for example, no prepayment penalty) to help you manage your finances effectively. Many lenders will offer deferment as an option where you can temporarily pause the loan payments in case of financial hardship. One of the best things you can do is to start repaying the loan as soon as you can.
3. Create a budget and stick to it
With a proper budget and a repayment plan, you can make sure that your loan payments are made on time and in full. Having a budget will also help you manage your expenses more effectively so that you can stay on top of the loan payments without any hassle.
Your budget is the key to getting the most out of your international student loan, so be sure to create a plan you can stick to for the foreseeable future. Doing so will allow you to make your payments on time and avoid any late payment fees over the life of your loan.
4. Find a cosigner
For many student loans, it is necessary to get a cosigner. A cosigner will be responsible for the repayment of your loan if you are unable to make payments. This way, you can secure a loan even with no credit history or low credit score. It can be a parent, relative, or friend who is willing to cosign your loan. A cosigner must be a US citizen or permanent resident with good credit history who is willing and able to take over your loan if you cannot pay.
If you don’t have a cosigner, keep in mind you can get a no cosigner international student loan from some lenders.
5. Shop around
To find a loan that meets your needs, shop around and compare what different lenders offer. Compare the interest rates, repayment terms, and features of the various loan options to find the best option for you. Make sure to read the fine print to avoid any unpleasant surprises in the future.
The easiest way to find the lenders with student loans you may be eligible for is to use the loan search at International Student Loan.
These are some of the key points to consider when looking for an international student loan. With the right loan, repayment plan, and budgeting skills, you can get the most out of your loan and pursue your studies with minimal financial worries.