Tuition in the US is growing at an exponential rate, and for international students, the cost can be much higher than an in-state student. International students who are lucky enough to have a US cosigner can apply for select private student loans to help fund their education. Typically, you can take out additional loans if you need to, so that you can keep pace with your total educational costs. But, when you graduate, you may find that you have a number of loans you need to pay back.
What is a student loan consolidation?
International student loan consolidation or refinancing allows you to combine the loans you’ve taken out into one single loan. After you’ve consolidated, you no longer have to keep track of the many loan payments and interest rate. Instead, you only have to worry about one interest rate and one payment per month.
What’s the advantage of consolidating your loans?
Many students choose to do loan consolidation in order to get a fixed lower interest rate so they can pay off their loan quicker. This doesn’t mean you are automatically guaranteed this. In fact, if you choose to increase the term of the loan so you have more time to pay back the amount, you should expect the per month payment to increase. Considering this, before you pursue loan consolidation it’s important that you evaluate any fees associated, including asking these important questions:
- Is the interest rate fixed or variable?
- Are there additional fees associated with this?
- Will you get a prepayment penalty if you decide to pay back the loan early?
These are important questions to ask yourself since consolidating your loan will override your previous loan terms and conditions. Because of this, it’s important to compare the consolidated offer to your original loan terms. We don’t want to be paying more after the consolidation!
You will need a US cosigner for student loan consolidation
The term of the loan will also depend on your cosigner. When you applied for your original international student loan, the credit score of your cosigner was evaluated to determine the risk (and thus, cost) of borrowing. If you will be doing student loan consolidation, then the credit score of your cosigner will be evaluated again. This means that if the credit score has increased, you could be eligible for a better rate. If not, however, your payment could potentially go up.
If you are interested in doing international student loan consolidation, learn about refinancing international student loans with MPOWER Financing.
