How Much Should I Borrow For My International Student Loan?
June 13th, 2014 by Jennifer Frankel
How much should I borrow for my international student loan?
Going to school overseas is a big decision and may require you to take out a student loan since it is expensive and most of us don’t have large amounts of money just laying around. But how large of a student loan can you actually afford to pay off? Here are a few pointers for nailing down a loan you can handle.
Know Your Expenses
Creating an Excel document or a homemade budget can come in handy to help you visualize your cash flow and to help you see what you can spare to put towards a loan payment. If you have the time, tracking your expenses over a course of six months could also prove to be helpful; you’ll see what areas fluctuate, and it may help you regulate those areas of spending in the future.
Potential Monthly Expenses:
- internet/cable television
- cell phone
- car insurance
- health insurance
- credit cards
Don’t Forget The Less Obvious:
- pet supplies
Understand your Student Loan Terms
International student loans can have a number of different terms and conditions, depending on the loan and lender. Be sure to understand the terms, as it’s important to know how it effects you, and how it can effect you in the future. All international student loans are private student loans, so be sure to contact the lender directly with any and all questions you may have.
Don’t Forget About the “What Ifs”
“What if…” is if the interest rate goes up on your student loan. Have you factored that into your budget? Will you still be able to make the monthly payment? Another “What if…” to take into consideration is a potential life change, such as a marriage, divorce, new baby or an illness. Planned or unforeseen, these events can drastically change your budget and add new expenses, which may alter your ability to make payments.
While it is difficult to predict the unexpected, it’s imperative to remember that student loans are long term commitments, so try to take all potential financial commitments into consideration before borrowing money.