Interest Rate Questions for International Student Loans
December 24th, 2012 by Jennifer Frankel

As the cost of higher education in the United States continues to rise, more international students than ever are looking for assistance when it comes to financing their higher education goals. As a result, while personal savings (self-financing) and scholarships (financial aid) remain the two most widely-used ways for such students to pay for college in the US, more international students than ever are turning to international student loans. International student loans, much like any other loan, represent a legally binding agreement with long-term consequences and should not be entered into lightly. Thus, potential borrowers should make sure they understand the terms and conditions of what they are signing. Here are a few questions (and answers) that may help:

  • Is the loan’s interest fixed or variable?

As the name suggests, a fixed interest rate means that the interest rate on the loan will not change over the life of the loan. By contrast, a variable interest rate may, at the discretion of the lender, change over time. Variable interest rates allow lenders to adjust the rate up and down according to market conditions and may, ultimately, make a major impact on a given international student loan interest rate.

  • Are variable rates inherently bad?

Not at all. It is entirely possible that, if the index on which a loan is based declines, the borrower’s interest payments also fall. Of course, the opposite it true, too. Fortunately, many loans have maximum interest rate caps to offset this risk. If this is something that you are concerned about, make sure that your international student loan interest rate has a maximum.

  • When will interest begin to accrue and when will I be required to start making payments?

Loan repayment falls into three basic categories. With the first of these, full deferral, both interest accrual and principal repayment begin 6 months after graduation. By contrast, interest only loans require students to pay the accruing interest from the start of the lending window and, similarly, immediate repayment requites payments on both interest and principal to be made as soon as the loan has been dispersed.

As you can see, there is no one right answer to any of these questions. As the situation varies from borrower to borrower, however, due consideration of these matters is always encouraged!

If you have additional questions, contact our loan experts for more information about interest rates!

12 Comments

  1. BASEL says:

    i do not have social security number

    • jfrankel says:

      Basel, thanks for your inquiry. Not all lenders require a social security number, but all international students will need a US cosigner. This cosigner must be a US citizen or permanent resident with good credit, and who has lived in the US for the past two years. If you are having problems with the application, please contact the lender directly with questions on the application.

  2. babatunde says:

    i want to know the exact figure for the international student loan and the exact time repayment has to start.Thanks

    • jfrankel says:

      Hi Babatunde, thanks for your inquiry. You can apply for the total cost of your education minus any additional aid you’ve received. Your school will determine what the total cost of your school will be – and thus, the total loan you can take out. Since we work with a variety of lenders, the repayment period will be determined on which loan you’ve chosen. You can compare loans, review terms and conditions to see the repayment period, and apply right online. To get started, you can compare international student loans.

  3. Emmanuel Ayirebi says:

    Dear sir,
    I am here to plead with you to offer me sponsorship for my schooling. I just recently got admission to study abroad in one of the prestigious college and universities. Due to financial constraints, i may not be able to continue. I am therefore pleading with you to help me any way you can since the deadline is this january. I have all documents showing i have gained admission to the university. Thanks for your support and co-operation.

    I would like you to grant me a student loan to pay a deposite in my newly admitted school. The school is demanding am amount of 25,000 dollar to start with. I will be working in conjunction with my education in other to reply the loan granted to me. I desperately need this money to pay the deposite since the deadline will soon elapsed. Thank you.

  4. Kevin says:

    What if you are granted a student load,lets say you where to make the payment after 10yrs and you have the money to pay before the time, will it be possible.

  5. Abusala Albano Stephen says:

    how do i get Us consgner

  6. laura says:

    Hi!

    I’m not a US citizen but I’ve been leaving in the US for the past 6 years on a G-4 visa (workign for an international organization). I do have a social security number and an excellent credit history. Would I be able to get a loan without a US cosigner?

  7. Ben says:

    these interests apply in a month or in a year?
    I mean that for example if the amount of interest might be 5%, then every month the amount of loan increases by 5% or at the end of the year the amount increases by 5%.

  8. Bakari says:

    I would like to start applying a loan from your institution, please let me know the procedures and how to get a US cosigner.Thank you.

  9. Felix says:

    I am a Tanzanian, wishing to apply for international students loan for postgraduate studies in Tanzania. My question is,how can I get your financial support?

Join the conversation




Get the Financial Aid Newsletter!