How to Compare Student Loan Options
September 25th, 2016 by Lette Berhe

compareHave you already checked out our International Student Loan Comparison Tool, but realized that you weren’t exactly sure how to compare the results given? Deciding which loan is the right one for you can feel a little overwhelming, but here is a cheat sheet on how to compare your different loan options and choose the best one!

Now, before jumping into the loan jargon here are some basic questions you should ask yourself in order to compare loans efficiently:

⦁ Do I plan to work and study at the same time?
⦁ Do I want to get a Master’s?
⦁ Do I want to make loan payments while I am studying or begin repayment once I have graduated?

You may not have a clear answer for these question at the moment, but if you do these questions will you give you some extra insight on which loan conditions are right for you.

  1. Interest Rates: Variable or Fixed?
    Interest rates are the part of taking out a loan that everyone hates, so if you can get the best deal you’ll feel very satisfied. When you apply for a loan, you are asked if you want a variable or fixed interest rate and the distinction is very important.
    • Variable: A variable rate means exactly that, the interest rate on your loan varies and changes over time. This is considered somewhat of a gamble because if the economy changes, your interest rate can either decrease or increase.⦁
    • Fixed: Most people automatically go with a fixed interest rate because its stable and, therefore, stays the same as long as your loan exists. A fixed rate makes it easier for you to calculate your monthly payments, which in turn allows you to organize your finances. In essence, it gives you more control from day 1.
  2. Repayment Schedule
    When choosing the details of your repayment, is when the previous questions could come in handy. It is important to know if you have the option to defer (postpone) payments until after you have finished your studies or if you have to begin repayment as soon as you sign your name. Here are 3 of the most common repayment schedules and what they mean:

    • Standard Repayment: Standard repayment usually gives you a 10-year limit to pay off your loan. During those 10 years you have a fixed monthly amount, and the lender usually requires a minimum monthly payment.
    • Extended Repayment: Extended repayment is similar to standard repayment, in that you have fixed monthly payments. However, you have the option to pay back your loan between 12-30 years. This of course lowers your monthly payments, but it is important to remember that the lender will be charging you interest during this time. Although you may have lower monthly payments, more payments means more interest which means more money paid over time.
    • Graduated Repayment: With a graduated repayment schedule, the idea is that you start off paying a specific monthly payment and that this amount is readjusted (increases) every 2 years. The repayment timeline given is usually 12-30 years.
  3. Special Conditions and Additional Fees
    You may have heard the term deferment thrown around when talking about loans and you may know that it means postponing your loan payments. When taking out a private student loan you must be careful with the fine print. Although deferment exists, with private student loans it might be a little bit trickier. Many times, in the fine print is where you will find a multitude of hidden fees that can come back to haunt you later. Here are a few fees to keep an eye out for:

    • Deferment
    • Paying off your loan early
    • Penalties for late payments

For more information on what to take into consideration when choosing a loan check out our post ¨What International Student Loan is Right for Me?¨


The ABC’s of Applying for a Student Loan
September 5th, 2016 by Lette Berhe

Wooden alphabet blocks isolated on white background

Now that you have chosen what university will be your home for the next 4 years, you can start the student loan application process. It may seem intimidating, but here’s a guide to help you get an idea of what you have to do and how to do it.

  1. Financial Aid & Cost of Attendance
    This is the first step once you have decided what university you will be attending. If you have received any scholarships or financial aid, make sure to get in contact with the financial aid office to get an updated version of your personal cost of attendance. When applying for a student loan, the maximum amount you are eligible for is equal to your cost of attendance. This will help you calculate the amount you are going to be asking for in loans. In addition, make sure that if you are going to need a co-signer you have that person informed about when you will be submitting the application, being that they will be filling out the application form as well.
  2. Choosing a Loan
    Finding a loan can seem like the hardest part, but that’s where we come in. With our International Student Loan Comparison Tool, you can save time trying to find the right loan. There are some important factors to consider when choosing a loan such as the repayment period or interest rate. It may sound complicated, but we have some tips to help you navigate this process.
  3. Filling out the Application
    Nowadays, loan applications can be submitted via the internet making the process a lot easier. You will need to complete the online application with your co-signer or they may be required to submit a separate online application. If this is the case, be sure to provide them with a correct reference number or application number to avoid any mistakes with the paperwork. In order to make the application process as easy as possible, collect all the following documents and information beforehand:

    • School information, including school name, major, grade, and school term for which you need the loan
    • Social Security number (as an international student, this may not be applicable)
    • Telephone numbers
    • Current addresses (home and school)
    • Personal reference information and phone number
    • Gross income information
    • Residence information, including whether you own or rent, and the monthly housing payment
    • Requested loan amount
  4. Contact from Lender
    During the application process, you will receive paperwork that may be completely foreign to you. The most important piece of paper is the Promissory Note, which is just a special name for the contract. The Promissory Note is the contract you sign stating to the lender that you will pay back the loan in full and under what specific conditions, in other words the fine print. Want to be up to speed on loan jargon? Check out this great video explaining the loan terms you’ll be coming across!
  5. Disbursement
    After all the research, paperwork, and possible headaches this is the moment you have been waiting for. Disbursement is what lenders call the process of giving you the loan money. Student loans are typically sent directly to your school which then uses the money to pay for what is charged to your student account for that semester. Although the process should be automatic, you should keep on top of the dates because your school will have a final payment date and if your loan is not received by that date, it could cause you problems.

Just like with the college application process, dates are important! Check out our financial aid timeline for some helpful tips.