US institutions are attracting students from around the globe and applications from Europe are on the rise. The number of UK students looking to study a graduate program in the US continues to increase, and undergraduate programs are only just behind. This article will tell you all the basics about international student loans for students from the UK who hope to study in the US.
A Whole New World
While the UK has several world-renowned institutions, the scope of courses available to study in the US in unequaled. As such, the number of British students studying a program in the US has risen by around a third since 2010 and continues to rise (according to studies by the Institute of International Education). Read another post about International Education facts and Figures.
There are over 4000 US institutions, many of which offer programs in specialisms many of us have never heard of. This allows students to find the degree that’s right for them, adding something unique to their CV.
One of the main deterrents for studying in the US continues to be funding. While university fees are subsidized in the UK, tuition fees and living costs in the US are on the rise. Many students now seek a student loan to support their education expenses.
FindingInternational Student Loans for Students from the UK
The easiest way to be considered eligible for a US student loan is to find a co-signer who is also an American citizen. A citizen with a good credit rating is the perfect candidate to cosign your loan, making the application process much easier. Many lenders offer loans to students with co-signers who have proof of income, as they can act as a guarantor for the funds.
A cosigner must be a US citizen or permanent resident who has lived in the US for the past two years and has good credit.
Your cosigner should have a stable job with a steady income and an established credit history. Lenders may look at how long your cosigner has lived at their current address and how long they’ve been employed at their current job.
Your cosigner is taking on the obligation to pay back your loans in the event that you cannot, so it’s important that the cosigner can afford to cover these expenses. International student loans and study abroad loans lenders will take into account the total income of your cosigner and their total debts (mortgage, car payments, credit card debt, and any student loans they may have on their own) when reviewing a loan application.
In the United States, the cosigner’s credit history is evaluated by a credit score that is based on outstanding debts and their payment history. Lenders will evaluate your cosigner’s existing and past loans and whether they were paid on time.
Cosigner Not Required?
However, this is not an option for everyone. If you do not have a cosigner and you’re looking for international student loans for students from the UK there are specialist lenders who offer this service. Lenders such as MPower Financing understand how difficult it can be to secure funding. They support students in the visa and college application process as well as providing funding, to reduce the stress over expenses. There’s information about finding a loan without a cosigner here.
To compare the best student loans for British students looking to study in the US, then look no further than our comparison tool.
It’s always interesting to look back at the previous year to get a feel for what’s going on in international education. Of course, we’re particularly interested in finding the perfect student loan for international students. So here are some key facts about international students in the US and US study abroad students.
Whether you’re a foreign student studying in the US, or a US citizen dreaming of studying abroad, we hope you enjoy learning a little more about the state of international education right now.
And when you’re ready you can learn about applying for your international student loan.
International students in the US
According to research carried out by The Institute of International Education (IIE), 271,738 international students enrolled at a US institution at the start of the 2017-2018 academic year. This is down almost 7% compared to the 2016-2017 figures (290,836 international students) and a further decline from the peak of 300,743 international students recorded in 2015-2016.
The total number of international students in the US was 1,094,792. This is up 1.5% on the previous year, but the rate of growth is at its lowest for over 10 years and a significant change from the 10% growth in total international student numbers in the US in the 2014-2015 academic year.
One encouraging trend is that international students represent a growing percentage of total student numbers. International students now represent more than 1 in every 20 students in the US (5.5% of all students). This has grown year on year.
In terms of the distribution of international students in the USA, we looked at the 10 most popular states.
The highest concentration of international students is in California. In 2016-2017 there were 156,879 international students in California. This rose 3.2% to 161,942 in 2017-2018.
The state with the biggest increase in international student numbers was Massachusetts. Massachusetts saw a staggering 8.4% increase in international student numbers to 68,192 compared to 62,926 in the previous academic year.
The following were notable in their decreases but remain amongst the top 10 most popular states for international students:
Ohio (down 2.8% to 37,583)
Indiana (down 2.0% to 29,994)
Texas (down 0.9% to 84,348)
Popular US schools for international students
The most popular schools, colleges, and universities for international students in the US may or may not surprise you. Amongst the top 5, we are proud to say that no-cosigner loans are available at all of them.
Coming out on top with a total of 17,552 international students was New York University, New York, NY. No-cosigner loans are available at New York University.
The rest of the top 5 are as follows:
#2 – University of Southern California – Los Angeles (Los Angeles, CA) – 16,075 international students. No-cosigner loans are available at University of Southern California – Los Angeles.
#3 – Northeastern University – Boston (Boston, MA) – 14,905 international students. No-cosigner loans are available at Northeastern University – Boston.
#4 – Columbia University (New York, NY) – 14,615 international students. No-cosigner loans are available at Columbia University.
#5 – Arizona State University – Tempe (Tempe, AZ) – 13,459 international students. No-cosigner loans are available at Arizona State University – Tempe.
Courses for international students in the US
The largest number of international students in the US are on Undergraduate programs (442,748), with 308,953 Graduate students enrolled. There were 203,462 international students in the US on Optional Practical Training courses. There were also 65,631 international students on other, non-degree courses.
The three most popular fields of study for international students studying in the USA were Engineering (with 21.3% of all international students), Business and Management (17.9%) and Math and Computer Science (17.0%).
For more information about the options available to international students attending US schools visit our International Student pages.
US Study Abroad Students
If we turn our attention now to US students studying abroad, the latest statistics available are for the 2016-2017 academic year. This year saw the number of US students studying abroad rise a modest 2.3% over the previous year to a total of 332,727 students.
More than 25% of these students (85,786) enrolled in STEM courses (Science, Technology, Engineering, and Math). Business was the next most popular field of study, with Social Sciences coming in third.
The 292,467 US undergraduate students studying abroad in 2016-2017 represented 1.8% of the 16,298,944 total US undergraduate enrolment.
64.6% of US students studying abroad in 2016-2017 did so for a short period (e.g. a summer or a study period of 8 weeks or less). 33.1% spent a semester (or one or two quarters depending on the institution) abroad. Only 2.4% studied abroad for the long-term – an academic or calendar year (or more).
Where do US students abroad study?
Europe hosted the vast majority of US students studying abroad. Latin America & the Caribbean came in second and Asia took third place.
#1 – Europe, 181,145 total US students (54%)
#2 – Latin America & Caribbean, 51,513 US students (15.5%)
#3 – Asia, 38,621 US students (11.6%)
24,790 US students (7.5%) studied in more than one region in the 2016-2017 academic year.
On a country level, 39,851 US students were studying in the United Kingdom in 2016-2017. This represents 12% of the total number of US students studying abroad. The UK is the largest single concentration of US study abroad students.
Italy, Spain, France, and Germany represent the second to fifth places respectively.
China appears at sixth in the list, with 11,910 US students studying there (3.6% of the total).
There are some other surprise appearances in the list of the top 25 most popular destinations for US students studying abroad:
#9 – Costa Rica hosted over 8,000 US students
#11 – over 6,000 US students made South Africa their home for part of their studies
#13 – almost 5,000 students experienced student life in the Czech Republic
Besides the 332,727 students who enrolled in courses leading to academic credit, 36,975 US students attended over 400 other institutions and took part in non-credit work, research, volunteering, and internships abroad.
If you’re interested in finding out more about your options as a US student studying abroad please visit our Study Abroad pages.
Are you planning to study abroad? There are International Student Loans available for students in your position who need funding. This might be for a semester or a full degree program.
Here at International Student Loan, we’re here to help. Find the information you’ll need to make an informed choice and apply for funding.
What a student loan can cover:
Tuition fees, books, accommodation, transportation, health insurance, and anything else an international student might need.
We’ve prepared this post as a one-stop overview of the information you’ll need whether you’re a student, parent, student- or financial-aid-advisor!
We hope you’ll find the student loan that works for you!
Financial Aid for Non-US citizens studying in the US:
International Student Loan
There are International Student Loans available for non-US citizens studying at a college or university in the United States. It’s very common for foreign students to apply for loans to help pay for college.
Studying abroad can be very expensive once all the costs have been added up.
We have a student loan comparison tool will match you with eligible loan options which you can review and choose the loan that works best for your circumstances.
Most international students inside the US will need a cosigner when applying for a loan. They must be a US citizen or permanent resident who has lived in the US for the past 2 years and has good credit history.
Find out more here.
Financial Aid for Non-US citizens studying in the US at select schools (No Cosigner Loans):
No Cosigner Loan
As mentioned above, most international students inside the US will need a cosigner when applying for a loan. Although a cosigner is required in most cases, international students attending a small number of colleges and universities in the US are able to apply for a no cosigner loan. If you aren’t able to find a cosigner then a no cosigner loan could be a good option for you.
Most international students in the US do not have credit history. With no cosigner loans the loan approval is based on the cosigner’s credit history, along with your academic success and career path.
Find out more here.
Financial Aid for US citizens studying abroad through a US school:
Study Abroad Loan
If you are a US citizen or permanent resident you may be eligible for a study abroad loan if you are participating in a study abroad program at an approved school in the United States. You must receive credit at your home college or university. If you are not sure if your school is eligible, see our complete list of eligible schools.
Our loan comparison tool lets you compare loans and find the loan that’s most suitable to meet your needs – and you can apply right online.
Find out more here.
Financial Aid for US citizens enrolled directly at a foreign school:
Foreign Enrolled Loan
If you’re a US citizen or permanent resident planning to enrol directly with an approved foreign school to complete an entire degree program overseas, you may be eligible for a Foreign Enrolled Loan.
There are hundreds of medical, dental, law and business schools, colleges and universities around the world that are approved.
Find out more here.
US citizens applying for federal loans:
Federal Student Stafford Loan
US students that need a student loan should complete the FAFSA and apply for Stafford Loans as well as applying for a Study Abroad Loan or Foreign Enrolled Loan.
Stafford loans are fixed-rate loans for undergraduate and graduate students attending college at least half time. They are provided under a federal government program, so interest rates can be very competitive.
Find out more here.
More About Student Loans for Foreign Students:
International Student Loan provides student loan information so that you are better informed and equipped to make the right decision on funding your studies. Whether you are looking for international student loans, foreign enrolled loans, or study abroad loans, we aim to always provide you with the very best of foreign student loan opportunities.
Finding a student loan for your international education can be difficult – but it doesn’t have to be with the help of internationalstudentloan.com
No Cosigner Loans
May 16th, 2018 by Felicity Bradstock
You’re set on going to College in the US. But you’ve been told you need a cosigner to get your student loan approved. This is the experience many international students face when looking for a loan to support their study costs. However, all hope is not lost. Some schools and lenders are now offering no cosigner loans to meet the growing demand from international students who want to study abroad.
Why a Cosigner?
A cosigner is a person who guarantees that if you (the borrower) are unable to repay the loan, they will be responsible for the repayment. The loan company often asks students to find a US-national cosigner to act as their guarantor. The cosigner must guarantee the loan will be re-payed if the student cannot make the payments. It is a big responsibility for any cosigner, as they are responsible for any debt incurred by the student.
It is harder to prove the income of the international student and most do not have savings in a U.S. bank account. Therefore, many loan providers require a cosigner to ensure that the loan is re-payed in full. This means loan providers to not have to rely entirely on the student for repayment.
It is common practice for loan providers to ask for a cosigner for any student loan. However, some schools are now offering no cosigner loans to meet the growing demand from students.
Many international students find it difficult to get a cosigner from the US to act as a guarantor for such as large amount of money. Therefore, some schools have created programs that evaluate the academic success of the student, as well as career potential, instead of credit history. They use the student’s background to determine whether they are eligible for a no cosigner loan.
Alternative lenders are now offering no cosigner loans to students who have worked hard to prove their academic potential, but are unable to find a cosigner.
The main no cosigner loan provider in the US is MPOWER. This provider has a fixed interest rate of 11.99%-13.99%. Students can borrow up to $25,000 per academic period or $50,000 in total. To apply, you must state how much you are intending to borrow on the application form. If approved, all loan money will go directly to your college institution. On average, it takes around 6 weeks to apply for a no cosigner loan.
So, if you want to study in a US university without relying on a cosigner, check out the loan comparison tool to see if you are eligible for a no cosigner loan.
You’ve decided to take the plunge and study college abroad. But now you need a loan and don’t know where to begin! This simple guide will show you how to approach taking out a student loan.
What to check before committing to a loan
- Repayment conditions. You need to ensure that you can meet the repayment expectations when you take out a loan. Loans have a clear timeframe for repayment, which can sometimes be difficult to alter once the contract is signed. Check the terms and make sure you are prepared to meet the repayment requirements.
- Interest. The most important condition to check in your loan is the interest rate. We cannot stress this enough. While some loans might look favorable in terms of upfront money received and repayment options, they could be charging you a lot of interest. Compare the interest rates of each of the loan options to ensure you get the best rate.
- Reviews. If your taking out a loan for college then thousands of students before you have done the same. Check review sites such as Top Ten Reviews and Credit Karma to see other student experiences with the loan company you’re interested in. This can give you an insight into the perks and downfalls that the loan provider website doesn’t tell you.
- Don’t bite off more than you can chew. If the loan company offers you more money than you need don’t accept. It might be tempting to take that extra slice of cake but is it worth it? Think about long-term repayment and the stress of being in debt. Only take out what you need for college and living expenses to ensure you are gaining the most from your loan.
- Ask questions. Loan providers are there to help you as they’ve helped many before you. They’ve answered thousands of questions about student loans and can provide you with the best information about their service. If you want a lower interest rate then ask if it’s available. If you want them to talk you through the small print before you sign the contract, ask! Any loan provider that is worth your time will be helpful and supportive, won’t judge and will make the process of getting a loan straightforward.
Where to begin?
Now you know what to look for in a loan where should you start?
The best way to start comparing loans is to check your eligibility. To find a student loan as an international student you can use the International Student Loan search tool to see which loans you qualify for. To do this, simple select the country you’re from and the institution you want to go to. Once you’ve got the list of loan options you can compare terms and conditions to see which is right for you.
We hope this brief explanation has given you a basis for finding a student loan. For more information about student loans, check out the information section on International Student Loan.
Is a student loan worth all of the financial repercussions that follow? I know, I won’t sugarcoat it, the costs of college and studying abroad are extortionate. So, you may be asking yourself if it’s really worth taking out a student loan to cover the costs? Or, should you avoid college altogether and start working? Here’s why we believe college really is worth the cost.
One of the obvious reasons to pay for a college education is to be rewarded at the end. College graduates earn on average double the median income of high school graduates. While the initial investment may seem substantial, you long-term earnings will be far higher than those of people without a college education.
Unemployment rates amongst college graduates are far lower. The unemployment rate for college educated people is around half that of those with only a high school education. Think that earning money instead of spending it on college seems like a better idea? In reality, it will be significantly harder to find employment, especially in your desired field of work.
Choice of Work
Out of high school you will most likely only be able to find a job in services or low-skilled work. But if you decide down the line that you want to work in a specific industry, it will be far more difficult to find a job. You will probably have to undergo training and education just to enter into your chosen industry in a low-level position. Then, you will have to work your way up from the bottom. This could take just as long as a college degree or more. Additionally, your earnings will be low throughout this time.
However, if you specialize in a subject at college, you will have the advantage of being knowledgeable about the industry already. You will have developed the necessary skills to find a job in your desired area. College is an expensive way into your chosen industry but you will have a better opportunity at entering at a higher level. You will start in a role that will build upon your education and offer you the opportunity to develop professionally.
The College Life
Let’s forget work, salaries and long-term preparedness for a minute and think about what college actually gives you. Living away from home, living with people of your age from all different backgrounds, learning not only academic teachings but also what your interests are (what sports you like, what charity work you’re interested in, what societies capture your attention). This is the part of college that can’t be bought.
Learning about yourself and becoming a more confident, independent person, will help you in your personal life as well as supporting your performance in an interview and professionally. Although education is important, you can gain so much more than this from college. You will establish life-long connections with the people around you. You will have the opportunity to take part in hundreds of activities, learn about different cultures and adapt to a new city or country. Honestly, college is a great, albeit expensive, excuse to have the best time of your life while also preparing for professional growth.
So, if you’re on the fence about going to college, explore the institutions you’re interested in. Think about what they have to offer consider the long-term benefits of attending your chosen college. Remember, you’re not just gaining an education but life experience. If you decide that college is right for you then check out at the different student loan options available to help you get there.
You suddenly have a whole summer ahead of you, you can finally breathe! Finals are over and you have so much free time you don’t know what to do with yourself. Friends are visiting home and planning their vacations, but how do they all have the money to do these things? It’s not easy, however, with a few simple steps you can stretch the last of your yearly budget to take a break this summer. So, take a vacation on a budget and forget all the studying and exams until next semester.
There are several ways you can save money on your vacation. To travel on a budget think about doing some research on your destination, managing expectations and planning. Here are just a few ideas to get you started.
Take your time
Never go for the first flight you find, always check out comparison sights such as Kayak and SkyScanner to see which are the cheapest routes, if a layover will reduce the cost of the flight or if there are budget airlines offering the same flights.
You have a whole summer ahead of you, so instead of rushing in to planning a trip a few days in advance do your research, look at airline websites to see when they have special promotions or sales and try to book during these times. If you’re not sure where you want to go then check out the cheapest flight routes and promotions to get you started, you might discover something you never knew existed.
You can save a fortune simply by being flexible. Most people tend to set a specific date and fit their search criteria to fixed expectations. This limits the outcome and often increases the price of the flight. Most websites allow you to select the option of +/-2 days when searching for a flight. By adapting your schedule to the flight availability, you can often reduce the cost of your trip by booking less popular flights. Now that school’s over you don’t have to fly Friday night to Sunday, meaning that you’re holding the winning hand. You can take those cheaper weekday 1pm flights that most people don’t have the right schedule to take.
In a home
Let’s be realistic, you probably won’t be staying in a 5* hotel on your vacation if you want to eat, drink and explore while you’re away. Alternatives such as AirBnB are a lifesaver. AirBnB allows you to rent a room in a great location with the only compromise of sharing a bathroom or kitchen. If you rent with a friend you can even split the price of the room between 2, massively reducing the cost. The filters are excellent, making the search for your stay straightforward and easy to fit around your criteria. Additionally, you can check out previous reviews and the rating of the host to make sure you feel safe and secure during your stay.
Just because you can’t stay in a high-end hotel doesn’t mean you can’t find a good compromise. Check out Booking.com for some incredible promotions on anything from dorms in hostels to hotels with breakfast and a pool. Other great sites include Expedia and Trivago, which offer both hotel comparisons and package trips with great promotions. Take a look around, and once you find a place you like compare between each of these websites to see which has the best deal.
If you’re away with friends you’re likely to eat out a lot, which can be scary and make you think you always have to go for the soup or salad. There are 2 easy ways to avoid this, the first is by renting an apartment to share with your friends. By using AirBnB or local websites in your destination you can often find a place with a kitchen to cook in the apartment. I’m guessing you won’t want to stay in the whole time, but at least you can cook breakfast and keep snacks and drinks in the fridge.
If you don’t have this option then just do your research in advance. Get a guidebook or look online at Lonely Planet, Rough Guides, Trip Advisor or Time Out to avoid the tourist traps. Think about alternatives to restaurants such as markets, where you can often buy fresh ingredients and eat outside. Besides, what’s the point in a vacation if you can’t enjoy the outdoors?
Some costs you won’t be able to avoid. However, by doing some research in advance you can often save a lot. Find out the best museums and galleries for students – most countries have reductions on tickets for people under the age of 25. Look for outdoor activities such as parks, gardens and festivals. Also, when at the beach, find areas where you can take your own food and drinks. Avoid paying for deck chair rental by taking a towel or blanket to lay on and make the most of the outdoors.
Wherever you choose to go on your vacation this summer, make sure you explore the local culture and traditions, take in your surroundings (simply walking around a city all day can uncover some great surprises and help you stumble across hidden gems), and enjoy your break from college.
We all know being a college student means studying, trying out new activities, exploring local culture, partying, basically saying yes to everything offered, right? But how is it that everyone seems to have to money to say yes to everything? These simple 5 steps will help you to stretch your student loan further without having to turn down all the amazing opportunities surrounding you.
- Join Facebook groups – what you have to understand is that you’re not the only one. If you’re feeling the pressure to get involved but don’t have the money to spend then thousands of other students are feeling the same way!
A great way to meet like-minded people, learn about local and free events, and explore some alternative options to those being offered on campus, is to join a Facebook group. There is a wide array of groups from the Harry Potter appreciation society or the birdwatching club, to class and college based groups. Each of these groups will have students sharing ideas, events, and generally seeking to socialize in a student-based environment. The great thing about Facebook is that you can see public groups and events, you can follow stories, share ideas, put ‘interested’ in an event without having to pay or attend, just to scope out your options. Additionally, you can join private groups that are full of other students in the area, many with similar student budgets.
- Shop smart – if your main restriction to getting involved in student activities is your budget, then be smart in other areas of your student life, like shopping.
Grocery shopping is a great place to stretch your money without missing out. A few simple rules could save you a fortune over your time in college:
- Never go shopping when you’re hungry! This is a sure way to give into your cravings and head straight to the Oreo section. (This will also help if you’re trying to balance being a student with maintaining a healthy lifestyle!)
- Make a list and try to shop once a week – to avoid impulse buys and make sure you have a plan for food throughout the week. It will help you to avoid ordering last minute take-out.
- Don’t eat out! Ok, maybe now and again after a long day in classes when you just don’t want to cook, but try to avoid it by buying food that you can prepare quickly and easily for those times.
- Go generic – do you really need those Lays chips and Coca Cola? Maybe you do need the occasional treat, but for the most part why not try the generic alternatives and test the water?
- Finally, check out the reduced sections, learn the times that stock is reduced each day and make use of your freezer! You can get some incredible deals on meat, fish and other expensive items if you watch these zones.
- Avoid buying all the memberships before you decide what you really want.
In a world of sports and societies it might be tempting to join them all, with the best intention of attending every soccer practice, film society showing, hiking trip etc. However, once the semester kicks into gear and you’re attending classes, studying, socializing, working out or whatever your routine happens to be, it’s unlikely you’ll be able to keep up with all those societies. Sample as many options as possible for free over the first couple of weeks of semester to see what fits best. And remember, spending time outdoors is a great way to get some free exercise!
- Student discounts – one of the best perks of being a student, and something I promise you’ll sorely miss once it’s gone, is student discount.
Just by having your student ID card you’re ahead of the game and can access a wide number of student discounts from shopping to activities. Big companies are all jumping on the promotional bandwagon including, Amazon, Sam’s Club, Greyhound, STA Travel and Verizon. Student discounts are also a fantastic way to support your education with companies such as Apple and Microsoft offering discounts on laptops and other technology. For events and shopping simply search online for student discounts in your local area or check out UNiDAYS for national offers.
- Don’t overspend on educational items. Ultimately you’re at college to learn, however, having a brand-new version of every book on the syllabus for each class simply isn’t necessary.
Firstly, many students before you have made this mistake. That means there is a whole bunch of second-hand (barely touched) books waiting for you to snap them up for half the price. Also try Amazon if you can’t find what you’re looking for on campus. For some books, you might only need to read one chapter and will then cast it aside. Approach your professors, ask what books are vital to buy and what you can find online or photocopy in the library. Finally, think about alternative options such as Amazon’s Kindle Unlimited program if you’re likely to need quick access to a number of resources.
If you think that college life might be for you, just take a look at the wide variety of student loans being offered to support your experience. And remember, college is not only about getting an education but about gaining life experience, so use these tips to go out and get involved!
November and December are usually the months when most people´s grace periods on their student loans are coming to an end. As you begin to organize your finances once more, it is important to determine the best way to pay back your loans and how to do it making on-time monthly payments. Most loan providers offer the following options to make payments: automatic debit, pay online, pay by phone, and pay by check or money order.
It is important to remember that the loan is under your name and is now part of your financial history. This mean that your loan payments should be taken into consideration when creating a budget for your new monthly expenses, and should be just as important as your rent and grocery expenses. Most lenders have some sort of late fee policy in place and late payments will only reflect negatively on your credit score and increase the amount of your debt with the loan provider. Read the rest of this entry »
Have you already checked out our International Student Loan Comparison Tool, but realized that you weren’t exactly sure how to compare the results given? Deciding which loan is the right one for you can feel a little overwhelming, but here is a cheat sheet on how to compare your different loan options and choose the best one!
Now, before jumping into the loan jargon here are some basic questions you should ask yourself in order to compare loans efficiently:
⦁ Do I plan to work and study at the same time?
⦁ Do I want to get a Master’s?
⦁ Do I want to make loan payments while I am studying or begin repayment once I have graduated?
You may not have a clear answer for these question at the moment, but if you do these questions will you give you some extra insight on which loan conditions are right for you.
- Interest Rates: Variable or Fixed?
Interest rates are the part of taking out a loan that everyone hates, so if you can get the best deal you’ll feel very satisfied. When you apply for a loan, you are asked if you want a variable or fixed interest rate and the distinction is very important.
- Variable: A variable rate means exactly that, the interest rate on your loan varies and changes over time. This is considered somewhat of a gamble because if the economy changes, your interest rate can either decrease or increase.⦁
- Fixed: Most people automatically go with a fixed interest rate because its stable and, therefore, stays the same as long as your loan exists. A fixed rate makes it easier for you to calculate your monthly payments, which in turn allows you to organize your finances. In essence, it gives you more control from day 1.
When choosing the details of your repayment, is when the previous questions could come in handy. It is important to know if you have the option to defer (postpone) payments until after you have finished your studies or if you have to begin repayment as soon as you sign your name. Here are 3 of the most common repayment schedules and what they mean:
Special Conditions and Additional Fees
- Standard Repayment: Standard repayment usually gives you a 10-year limit to pay off your loan. During those 10 years you have a fixed monthly amount, and the lender usually requires a minimum monthly payment.
- Extended Repayment: Extended repayment is similar to standard repayment, in that you have fixed monthly payments. However, you have the option to pay back your loan between 12-30 years. This of course lowers your monthly payments, but it is important to remember that the lender will be charging you interest during this time. Although you may have lower monthly payments, more payments means more interest which means more money paid over time.
- Graduated Repayment: With a graduated repayment schedule, the idea is that you start off paying a specific monthly payment and that this amount is readjusted (increases) every 2 years. The repayment timeline given is usually 12-30 years.
You may have heard the term deferment thrown around when talking about loans and you may know that it means postponing your loan payments. When taking out a private student loan you must be careful with the fine print. Although deferment exists, with private student loans it might be a little bit trickier. Many times, in the fine print is where you will find a multitude of hidden fees that can come back to haunt you later. Here are a few fees to keep an eye out for:
- Paying off your loan early
- Penalties for late payments
For more information on what to take into consideration when choosing a loan check out our post ¨What International Student Loan is Right for Me?¨.