How Much Is Too Much When Taking Out An International Student Loan
May 4th, 2014 by Jennifer Frankel
Many international students make the decision to take out student loans to help finance their study abroad programs. Student loans can be an important financial tool to afford the study abroad experience including all of the costs that go along with it – transportation, tuition, room and board, etc. Doing your research into student loans and knowing how much money you should borrow is critical to making smart financial decisions that open the doors to opportunity, but don’t leave you with years of debt.
Taking out too little money can cause you to fall short on many fees and leave you with not enough funds for important functions like eating, rent, or even tuition. On the other hand, taking out too much can mean larger loan amounts, more money to repay, and more interest payments in the long run. So how can a student make sure to take out the right loan amount?
- Budgeting is possibly the most important function when deciding what size loan to take. Students need to determine what bills and expenses they have each month, and decide accordingly how much money to take out. Students will need to create a monthly budget including rent, food, electric, tuition, books, fees, and other miscellaneous expenses. These ideas will allow you to get a ballpark idea of how much you will need a month, and how much of a total loan you will need. Good news is, you can apply again for student loans in case you need more money later on.
- One way to reduce the amount of loan you need is by getting another form of income. This can come in many different ways. Some international students can receive scholarships which can help decrease loan size. Students should also consider any type of income earned from jobs, investments, or gifts. Outside income ties into creating a monthly budget
There are also some other important tips to making sure you get the best loan amount for your needs as an international student:
- Understand your interest rate and how much extra you could be paying when your loan comes due
- Do your research and get a strong understanding of the loan terms and any fees that may be associated with the loan
- Find out how much of a loan you are able to take out. Some banks have limits on the size of loan available to students. If you qualify for a government sponsored loan, there may be a limit based on your class standing (undergraduate, graduate, technical, etc.)
- Look into other forms of financial aid! Loans are not your only resource and by looking into other financial aid resources you can reduce your loan amount. Scholarships, grants and awards can help reduce a loan amount and help you determine the best amount for you!
Ready to apply for an international student loan? Check out our comparison tool where you can see what lenders will work with you, and then you can begin the application process right online.