Every year, many international students choose to study in international colleges. While most students finance their education with a combination of scholarships, grants, and student loans, some students also rely on personal loans to cover their costs. A personal loan for international student is a great financial tool for students and parents who can’t afford to pay for their education. The cost of education in international colleges is expensive and it is important to have a good financial plan.
In this article, we will discuss personal student loans for international students. We will share a few tips on how you can get a personal loan and how you can use it to finance your education. So if you are a student looking to pursue a degree in an international college, read on!
What are personal loans for international students?
Similar to private loans, personal loans for international students are unsecured loans that can be used for a variety of purposes. One popular use of personal loans is to finance the costs of education. International students often rely on personal loans to cover the cost of tuition, fees, and other educational expenses.
Personal loans are available from a variety of student loan lenders, including banks, credit unions, and online lenders. The interest rate on a personal loan for international students will vary depending on the lender and the borrower’s credit history.
What are international student loans?
Now when it comes to international student loans, these are student loans that are specifically designed for international students who are attending college in the United States. International student loans generally have lower interest rates and more flexible repayment terms than traditional loans.
Different types of loans for international students
There are mainly two types of international student loans
1. Federal student loans:
A federal student loan or federal student aid is a type of loan that is offered by the US government to eligible students attending an eligible school or university in the United States. Federal student loans are available to both US citizens and international students. Federal loans are cheaper in terms of interest rates and they offer more repayment options as compared to private loans.
There are mainly 4 types of federal student loans
1. Direct subsidized loans: These loans are offered to eligible undergraduate students with financial needs. The US government pays the interest on these loans while the student is in school, during their grace period, and during deferment periods.
2. Direct unsubsidized loans: These loans are available to both undergraduate and graduate students; however, the student is responsible for paying the interest on these loans.
3. Direct PLUS Loans: These loans are available to graduate or professional students as well as parents of dependent undergraduate students. The borrower is responsible for paying the interest on these loans.
4. Direct consolidation loans: These loans allow the borrower to combine all their eligible federal student loans into a single loan with a single monthly payment.
2. Private/Personal student loans:
As the name suggests, a private student loan is provided by private organizations, such as banks and credit unions. These loans usually have a variable interest rate that is higher than the federal rate. Private student loans can be used to cover any educational expenses, including tuition, room and board, books and supplies, and transportation.
Federal loans are often the better option for students, but private student loans can be a good choice if you have exhausted your federal loan options and need additional funds to cover your educational expenses.
If you are an international student, you may not be eligible for federal student loans. In this case, private student loans may be your only option.
How to apply for a personal student loan?
Here are some of the things you need to keep in mind when applying for a personal student loan:
1. Shop around
To find the best international student loans, it’s important to shop around and compare the interest rates and terms of different lenders. You can easily compare the rates by going online and checking the websites of different lenders. There are hundreds of companies that offer international student loans and have their rates, monthly payments, terms, and conditions. So make sure to compare the offers before you decide on a loan.
2. Find a cosigner
If you are an international student looking for a personal loan, you will likely need a cosigner. A cosigner is someone who agrees to sign the loan with you and is responsible for making the payments if you cannot. Usually, a cosigner is a parent or other relative. Your cosigner has to be a permanent resident of the US and have a good credit score. Read our article on how to find a cosigner to learn more.
3. Check your credit score
When it comes to personal loans for international students, your credit score is very important. You have to meet the minimum credit score requirements of the lender. If you don’t have a good credit score, you may have to get a cosigner. So it’s important to check your credit score before you apply for a loan.
4. Read the terms and conditions
Before you sign the loan agreement, it’s important to read the terms and conditions carefully. You should understand the interest rate, repayment schedule, grace period, late fees, and other charges. If you have any questions, make sure to ask the lender.
5. Fill up the application form
Once you meet all the requirements, you can fill up the application form and submit it to the lender. Make sure to provide all the necessary information accurately. You will be asked to provide certain information such as your name, address, date of birth, Social Security number, and the amount you need to borrow.
Things to consider before applying for an international student loan
Here are a few things you should consider before you apply for an international student loan:
1. Your eligibility
Before you apply for a loan, make sure you are eligible. Most lenders have certain requirements that you need to meet, such as being enrolled in an accredited school, having a good credit score, and being a US citizen or permanent resident. Different lenders have different requirements, so make sure to check the requirements of the lender you are considering.
2. The interest rate
The interest rate is one of the most important factors to consider when comparing loans. Make sure to compare the interest rates of different lenders before you decide on a loan. Keep in mind that the interest rate will affect your monthly payments and the total amount you will have to repay.
3. The repayment schedule
Another important factor to consider is the repayment schedule. You should know when you have to start making the payments and how much you need to pay each month. Make sure you can afford the monthly payments before you apply for the loan.
4. Apply for federal loans first
Applying for federal financial aid should be your first option. Federal loans usually have lower interest rates and more flexible repayment options. If you are not eligible for federal aid, then you can consider private student loans.
5. Make your payments on time
Once you have taken out a loan, it’s important to make your payments on time. Don’t miss a payment or you will be charged late fees. If you are having trouble making the payments, contact your lender and try to work out a repayment plan.
Conclusion
So there you have it! These are a few things you need to know about personal loans for international student. Make sure to do your research and compare the offers before you decide on a loan. And remember to make your payments on time!
Remember that loans for international students without a cosigner may also be available.
