Understanding Interest Rates for International Student Loans
December 13th, 2012 by Jennifer Frankel

It comes as no surprise that international students are interested in, well, interest. After all, interest – broadly defined as the money above and beyond the principal (original amount of the loan) paid to the lender in exchange for borrowing money – represents a significant financial burden for any kind of loan. That burden, however, can be quite different for international students than it is for domestic students.

Varying international student loan interest rates are one of the key reasons for this. Indeed, while the interest rates on federal student loans are fixed by law, such loans are usually inaccessible to foreign students studying abroad in the United States. Fortunately, in addition to self-financing through personal savings and scholarships, international students can turn to international student loans when financing the goal of higher education. Unlike federal student loans, however, the international student loan interest rates are not fixed. Instead, a number of factors, when taken together, determine the interest rate on a private loan.

While interest on private loans is still calculated as a percentage of the unpaid principal amount borrowed, private loans start by using standard indexes (such as the Prime Rate or LIBOR) to calculate interest rates. The index a given loan uses is clearly outlined in a loan’s Master Promissory Note. From this standard basis, however, individual factors, including a borrower’s credit score, their cosigner’s credit score, the college or university in question, and the loan repayment rate may all influence a borrower’s interest rate. Thus an international student loan interest rate is made up of a number of unique factors that vary from student to student. Nevertheless, each aspect that goes into these calculations should be outlined in a loan’s Master Promissory Note or disclosure statement. It is therefore crucial that potential borrower read all of their loan documentation carefully – knowledge, after all, is power.


  1. Yves Poliany says:

    Need help about international student. someone can help me please?

  2. Juan Salvador says:

    Hi! I’m a international student, and I will like you to help me out. How does the interest rate works? If I have a good co-signer in the states, what are his/her requirements to appply? How can I apply for the loan? In how many years do I have to pay? If the income of my parents isnt that high, can I still apply? Where do I apply?

    Hope to hear from you soon.

    Juan Salvador

  3. Nicholas Aidoo says:

    I only need this loan for the 1st or perharbs the 1st two semister.will i be granted the loan.

  4. Z. kerkula s. Flomo says:

    i really in-nned of this student loan, but i have my sis lives in the us-Savanna, Delmonde. could i kindly understand / when can i bring the cosigner?

  5. Z. kerkula s. Flomo says:

    I also have my brother in the US. His name is John K. Eastman who been living in the US for the past 23 years; he lives Delmonde Ave-Savanna

  6. Pacethel Aamdi says:

    I have been accepted by two US college after being on a seven years admission drought in my country. I was offered a full-tuition by one of the colleges which is located in Texas, and l am required to pay my room & board fees of approximately $8500 before l could be issued my I-20. Please l wish to know if there is a way l can possibly present a non-US citizen as my co-signer. He works in a reputable British company here in my Country.

  7. riyashanmughan says:

    how to get international student loan.can you please help me

  8. Abusala Albano Stephen says:

    I desparately need help about international student loan.someone can help me please?

  9. Taiwo says:

    I gained admission to Devry University, I need loan to pay up for the school fees and a co-signer to help me facilitate it. can you link me up with financial institutions readily avalaible to loan me and a co-signer. I am a Nigerian.

  10. Blessings Chitsime says:

    I need help about International Student Loan. I have been offered a place at Leeds University for Masters Degree in Public Health. Please assist me to get a student Loan. The course will start in September and total cost required is 25, 000 British Pounds. I am a Malawian man working under the Ministry of Health in Malawi as a Disease Control Officer.

  11. Asbel Assefa says:

    Which are the best lenders for student loans?

  12. victor says:

    how do i access this loan with the lowest interest rate pls i need a schoolarship as i can not afford the payment

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