How to Apply for Private Student Loans
November 11th, 2021 by Al C

Working out the pros and cons of student loans

Private student loans make up 7.80% of the total outstanding student loan in the USA. That is more than $130 billion.

Private student loans are some of the most useful financial tools that help students pay for their education, especially when traditional financial aid is not sufficient. A private student loan is a great alternative option if you don’t qualify for a federal student aid program. And because banks and lenders offer many options for repayment, private loans may also be more suitable for your own needs.

Also, there is a high chance of getting approved with private student loans because with certain lenders these loans are not even based on the credit history of the applicant. Therefore, a private student loan would be ideal if you don’t qualify for a federal student loan or if you don’t have any credit history.

In this article, we will be digging deep into private student loans! We will discuss how they work, their advantages and disadvantages, the application process, and other useful information so you don’t get confused when you apply for a private student loan. So let’s get started!

What are private student loans?

Unlike federal student loans, private loans don’t originate from the government. Private student loans are used when a student either doesn’t qualify for the federal student loan or when their amount of financial aid is not enough to pay for his/her education.

Private student loans are mostly offered by the major banks, savings & loans companies, credit unions, and some other lenders who provide personal or educational loans. A private student loan typically offers benefits that include low-interest rates, flexible repayment options, and lenient borrowing limits. However, the interest rates on private student loans are higher than federal student loan rates.

How does a private student loan work?

A private student loan is the same as any other student loan, but they are offered by private financial institutions. When you apply for a private student loan, you need to submit your credit history and income information. The bank or lender will assess your particular situation and determine if they offer you the amount of money that you require.

Once you get approved, the lender will send your school’s financial aid office the funds. They will credit the required amount of money directly to your account and you can use it for paying tuition, housing fees, or any other expense that is related to your education. If there are any funds remaining, your school will transfer those to your nominated bank account.

How to apply for a private student loan

online application form

Before you apply for a private loan, make sure you understand all the terms and conditions of the loan. Compare different lenders or banks that offer student loans before settling on one. Once you have identified the lender with whom you want to go, it’s time for applying for a private student loan! Here are some steps that you need to follow:

1. Check whether you qualify for a federal loan or not

It is advised to apply for a federal student loan before you go for any other type of student loan because these loans offer lower interest rates. Interest rates on private loans are higher than federal student loan interest rates. Therefore, it is better to opt for a federal loan if you qualify for one. In most cases international students in the U.S. do not qualify for federal student aid.

2. Get your credit history in order

If you do not have an established credit history, then it will be difficult for you to get approved by some of the major lenders or banks. Make sure your credit report is error-free and clean. You can check your credit history from the three major credit bureaus: TransUnion, Experian, and Equifax. Once you have a good credit history, apply for a private student loan. There are a small number of lenders that do not require credit history and you can find out about them here.

3. Find a cosigner

It can be hard for students to build their credit score, so the easiest way to get approved for a private student loan is by getting cosigned. If you have someone who loves and trusts you (family members), they can be your cosigner on your application form. This will make it easier for the lender to approve your application because another person has vouched for you! In addition, if your cosigner’s credit history is up to the mark, you can get better repayment terms. Your cosigner must be a U.S. citizen or permanent resident. Most international students will need a cosigner, but there are a number of lenders that do not require one.

4. Find a suitable lender or bank for your private student loan

The most important step in applying for a private student loan is to find the right lender or bank that can provide you with the amount of money that you require. Each lender has its own terms and conditions. You can find different lenders by searching online or visiting your local bank or credit union. Take time to review different loans, rates, and terms before choosing one. One of the easiest ways to find a loan as an international student is to use our loan comparison tool.

5. Fill the application form carefully

Once you have found a good bank or lender, it’s time to fill out their application form. You will need your social security number, credit history, annual income, and other details in order to apply for a private student loan.

Filling out this form should be done carefully because this information will be used to make a decision on your loan approval. If you have any doubts or do not understand something in your application form, it is better to ask the bank before filling it out. Once you are done with it, submit the form.

6. Be aware of hidden charges and fees

Once you have submitted your application, you will receive paperwork from the bank. Make sure you review all the terms and conditions carefully to avoid any hidden charges or fees that can increase your loan amount.

7. Get approved for a private student loan

After filling out an application form, waiting patiently for a response from a lender, and going through the required paperwork, it’s time for you to get approved for a private student loan! Once you have been approved for a loan, the lender will transfer money to your school.

8. Paying back your private student loan

Once you get a private student loan, it is important for you to be aware of the repayment period and other charges. The bank will send you an email or letter that tells you about the amount that must be paid back. You should also know if there are any penalties or charges for not making monthly payments on time.

Federal student loan vs Private student loan

The federal government provides loans to domestic students

Federal loans are the safest option when it comes to taking out a loan for college if you are eligible for them. Federal student loans typically have lower interest rates compared to private student loans, they do not require a co-signer, and you will not accumulate any additional debt if your student situation changes.

Private student loans may be used for continuing education or for students who do not qualify for federal loans. Before applying for a private student loan, make sure that you understand the terms and conditions of your lender or bank. You can get your credit report and score from all three major credit bureaus: TransUnion, Experian, and Equifax to help you find a suitable lender.

Note: Consider getting a private student loan only when you don’t get approved for a federal student loan or your federal student loan is not enough for your education expenses.

Advantages and Disadvantages of Taking Private Loans

Private students are great alternatives for students who have a bad credit history or have applied for a federal loan but did not get approved. But they do come with both pros and cons that must be considered before applying for them.

Advantages

1. Private student loans give you the freedom and flexibility of choosing your own loan amount and loan duration.

2. You can get rewards for having good credit. Your interest might get lower if you have a good credit history.

3. You get more freedom to use the money that you borrow in any way you want during your college years.

4. You can apply for a private student loan anytime you want. No matter if you are in the middle of your college career or if you are graduating, you can still apply for a private student loan.

5. Private student loans can be used to repay your previous student loans.

7. Ideal for students who have a bad credit score or didn’t get approved for federal loans.

Disadvantages

1. You will be charged with higher interest rates than if you get a federal loan.

2. You are required to have a co-signer if you have a bad or no credit history with most lenders.

3. It is essential that you review all transaction and loan terms with your lender to avoid any misunderstandings or miscommunications.

4. You may not be able to change the duration of your repayment without increasing the interest rates

A few things to consider

  • Opt for private student loans only if you don’t qualify for a federal student loan
  • Compare multiple lenders and banks before finalizing a lender
  • Borrow only what you need to stay in school and pay for your education expenses
  • Don’t miss out on any repayment term and make sure you repay your private student loan on time
  • Find a co-signer if you need one
  • Read the terms and conditions carefully before signing any agreement

Final thoughts

So there you have it! A private student loan is great if you don’t qualify for a federal student loan. Make sure you consider all options before you apply for a private student loan. Always review the terms and conditions with your lender before you sign anything.


The shocking student loan debt statistics for 2021
October 25th, 2021 by Al C

As time goes by, the average student loan debt continues to rise. While students should only have to focus on their education and future, student loans are becoming a major concern for both students and their parents.

From tuition fees to books, many students are spending thousands of dollars before even they become graduates. It doesn’t end here, student loans have a significant impact on the average 21-year-old college graduate’s income. In fact, it also affects their average yearly earnings for the rest of their lives.

It’s almost impossible for an average student to get admission to good colleges in the USA or Canada without scholarships, federal student aid, or financial support of some kind. Therefore, average students can’t afford to spend thousands of dollars on tuition fees and other course materials each year. Thus, private student loans are the only solution to their problem for many.

The only problem with that is most students don’t know how much exactly they will earn after their bachelor’s degree. If students had enough knowledge about the average student loan debt, average tuition fees, and average salary after graduation, they would be able to solve this problem more easily. That’s why we are here to help.

We have gathered a bunch of information that you as a student must know. So keep on reading and get familiar with the average student loan debt!

Average student loan debt: $27,975

For average students in the USA and Canada, the average student loan debt at the time of graduation is $27,975. This average student loan debt varies from school to school and course of study.

For example, the average graduate with a law degree owes more than the average student with an engineering degree. That’s just how it goes, students in the USA and Canada owe over $27,000 at the time of graduation.

Average student loan debt per year: $9,410

It’s a well-known fact that average tuition fees for colleges and universities are more than ever before. The average student loan debt per year is $9,410. It’s not just average students in the USA and Canada who are facing this problem. Students in the UK also seem to be under a lot of pressure with average student loan debt per year that reaches up to £10,000!

Average monthly student loan payments: $775

Students who live on their own and those who live with family members have to pay $775 as monthly payments. This number seems to be normal, but what’s not normal is the average amount of interest students have to pay back after their graduation.

The average interest rate on student loans: 6.5%

The national average interest rate on student loans is 6.5%-8.50%. This percentage will depend on the public market rates and the rate the school sets.

However, even if this percentage is a lot lower than credit card interest rates and bank loan rates, it can still affect your average income after graduation. Since it takes a few years to pay off student loans, most students rely on their parents for support and financial aid.

Average college tuition fee: $30,000-$45,000

In the last 10 years, average college tuition fees have increased by 2 times. In fact, the average college tuition fee is now $30,000-$45,000 per year.

In some universities and colleges in Canada and the USA, you might even need to spend up to $50,000 a year if your study program is more demanding.

Let’s take a look at some of the most popular colleges in Canada and the USA with their average tuition fees. Most of these average college tuition fees don’t include the cost of living and other expenses that students need to pay. So these fees are only for your college education.

$52,000 – Columbia University (New York)

$51,000 – Sarah Lawrence College (NY)

$50,000 – George Washington University (Washington DC)

$49,560- New York University

$47,950 – Eugene Lang College of Liberal Arts (New York)

$44,000 – William Paterson University of New Jersey

$43,000 – Northwestern University (Illinois)

$40,520 – Georgia State University

$39,970 – Northeastern University

Other costs that students usually forget about:

Books and course materials. For example, if you’re planning to study medicine, we’re talking about hundreds of dollars per semester for books and course materials. Transportation fees and living costs. You will also need to pay for your transportation since you can’t always rely on public transportation or your parents drive you to school and college. Let’s see how much do they cost on average:

1. Living costs:

Living cost varies from one city to another. It depends on the average rent price in your city, plus other expenses that you have every month. Let’s just say it costs around $800-$1000 per month for living costs if you live alone or with a friend.

2. Transportation cost:

If you’re studying at a university or college that isn’t close to your home, you will need to pay for transportation on daily basis. An average student who drives to school might spend up to $50 per week on gas and other costs. If they are taking the bus, it’s safe to say that this amount can be higher depending on how far they need to travel.

3. Food cost:

It’s normal to go out with your friends and family for dinner, drinks or fast food. This can be very expensive if you do this every day! Let’s say it costs you $50 per week just to eat outside and socialize.

4. Books and course materials:

Most schools and colleges expect their students to have their own books and course material. The average cost of a book is approximately $200-$250 if the textbook is new. If you’re studying engineering or medicine, you’ll need other study materials such as laboratory kits, CDs, and software.

5. Other expenses:

You might need to visit the dentist or doctor for a checkup. If you need glasses, contact lenses, or other medical aids, don’t forget to add this expense too! Other expenses like going out or entertainment are also included.

Federal student loan debt vs private student loan debt

If you need to take Federal student loans or a private student loan, here’s what you should know. Federal loans have better conditions and lower interest rates than private loans. For example, the federal government sets their student loans interest rate depending on the type of study program and the year you’re in at school. On the other hand, private lenders set their own interest rates. They are usually higher than federal rates, so it’s better to avoid them.

The average federal student loan in the USA is $36,000. In Canada, this amount can be higher or lower depending on your province of residence and what study program you’re taking at a college or university. In order to reduce the loan payments, you can take a look at their plans such as the Federal Family Education Loans.

When it comes to private student loans or direct loans, the average is $14,400 for graduates with bachelor’s degrees. On the other hand, students who drop out of college or university have more than $20,000 in private student loan debt on average.

You can find information about private international student loans here:

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What country is #1 in student loans?

The USA is the country with the highest student loan debt in the world, so it’s no surprise that they also have one of the highest average college tuition fees. On average you need to pay $35,000 if you study at a US university or college after high school.

In 2017, student loan debt has reached a new record in the USA. It currently amounts to $1.33 trillion which means every American owes an average of $37,172. It’s even higher than the car and credit card loans.

It’s not the tuition that’s causing the problem, but the cost of living which is very expensive in most cities. Cities like New York and Los Angeles have a very high cost of living. And the same this is happening in Canada. With high tuition fees and living costs, it won’t be surprised if we reach $100,000 in the next few years.

What would happen if you fail to pay your student loans?

If you fail to pay back your student loan, this can lead to serious problems

1. Increased interest rates:

If you default on your student loans, the federal government can increase the interest rate for their federal loans. This means that instead of paying 6% (the current interest rate), it will be 18-23%, which is very high! The interest rates could increase more if you take direct loans or personal loans from private student lenders. And if you can’t manage to find a suitable job you will find yourself in more debt.

2. You can’t pass the background check:

If you want to work for the government or join the military, you will need to pass a thorough background check. One of these is passing a credit score check. If your credit score is low, it means that you’re not reliable with money and this isn’t something you want to show on your background check.

3. Bad credit:

If you fail to pay your student loans, the federal government will send your account to a debt collection agency. If they can’t contact you or get you to pay back, this will affect your credit score and ruin it. This means that if you want to buy a house in the future, take out a loan for any other reason, or simply need a credit card, you won’t be approved because your credit score isn’t good.

4. Lawsuits:

If the debt collection agency fails to get in contact with you or can’t help you pay back, they will sue you for the money that you owe. If the court decides that you need to pay it back, they will take your bank account, tax refunds, and wages. This means that if you have any savings or are planning to get a big salary raise in the near future, it will be taken away from you by the courts!

Student loan debt reaches $2 trillion in 2021

We are in the last quarter of 2021. According to the student loan statistics and the federal reserve bank, the total student loan debt has reached a staggering $2 trillion. That means the average debt is $25,000 per person.

The cost of living has risen dramatically since 2007 and it’s expected to rise even further. The total number of students attending public universities has also risen to an all-time high and the cost of living is higher than ever before.

The cost of health care, food, and shelter has risen dramatically over the past few years which means that people spend much more on these items. This leaves less money for anything else like student loans.

In total, student loan debts have crossed the auto loans and private loans in the USA. And the number of people with student loans is expected to rise by about 1 million every year. The average net income of students has also fallen, which means that they have less money to spend on other things like loans and credit cards.

So what does this all mean?

The outstanding student loans will only continue to rise and it’s likely that we might reach $3 trillion in the next few years. The cost of living will continue to rise, which means that even if you don’t have student loans, life would be pretty expensive.

The average wage is already not enough to pay back your loan and it’s likely that we might reach $30,000 in the next few years. This means that if you want to continue your education and borrow an additional $30,000 for college expenses, you will have to pay back about $60,000 in the next 10 years.


Is Sallie Mae legit?
October 11th, 2021 by Al C

College lecture hall

Sallie Mae is a private student loan lender that can help you get the money to pay for school. And the simple answer to the question above is YES -it’s one of the largest and best regarded providers of private student loans in the U.S. and has been operating since 1973.

Sallie Mae, or Sallie Mae Bank, offers student loans of all types and sizes, giving students more options when borrowing than ever before, including to underserved groups – like DACA recipients or foreign residents who are seeking education in America and are usually ineligible for federal student loans.

In this post we’re going to cover some of the most common questions we get about Sallie Mae and private student loans in general.

What are the benefits of a Sallie Mae loan?

There are a number of benefits to a Sallie Mae student loan that set them apart from some other private loan companies.

Accessible for more applicants

With federal student loans and many private student loan lenders, eligibility criteria restrict many groups from accessing the funds they need to pay for their education at an American college or university. Sallie Mae does not exclude part-time students, international students or those with DACA status.

Loan forgiveness for death or disability

Sallie Mae will forgive, or “discharge”, the loan balance if the student is permanently disabled or dies – including in cases where it is the parents who are the borrowers and not the student themselves. Not even federal Parent PLUS loans have this benefit.

Cosigner release option

After 12 consecutive months of making your loan payments on time you can request that Sallie Mae remove your cosigner from your loan. Of the other private lenders that offer cosigner release, the majority only do so after several years of making payments on time.

Are there any drawbacks to Sallie Mae loans?

Like all private loans, there are pros and cons. Here are the lowlights of a student loan from Sallie Mae:

Fees for late or returned payments

Compared to other lenders, Sallie Mae charges a fee, or a higher fee, for making monthly payments late, or failed (returned) payments. A returned payment is when your payment “bounces” due to insufficient funds. At time of writing a fee of $20 is charged for these. For late payments the fee is 5% of the payment amount, or $25 – whichever is lower.

College student studying

Credit check required

In order to see if you qualify for a student loan from Sallie Mae, you have to complete the application and they will carry out a credit check which will potentially affect your credit score. Some alternative lenders pre-qualify applicants to give them an idea of if they would qualify and what typical loan terms would apply without carrying out a full credit check.

Now that we’ve looked at the main pros and cons of Sallie Mae Bank compared to other lenders, let’s take a closer look at what kinds of loan are available and more detail on Sallie Mae as a loan servicer.

Student loan options

Sallie Mae offers the following types of student loan:

Undergraduate student loan

Sallie May undergraduate student loans allow dependent students to borrow additional funds over and above the maximum amount they can borrow with a federal student loan. You can borrow between $1,000 and the total cost of attendance over 5, 10 or 15 years without origination fees and without prepayment penalties.

Professional training loans

Whether it’s culinary training or another type of technical or trade school, Sallie Mae’s Career Training Smart Option Student Loan allows students to borrow from $1,000 up to the total cost of attendance over 5, 10 or 15 years.

Loans for graduate programs

If you’re studying for a master’s degree, Sallie Mae offers graduate school loans that have no origination fees. The repayment term for the graduate loan is 15 years and includes a 6-month grace period after graduation.

MBA loan

If you’re attending business school, and studying for your master’s in business administration you can apply for a loan to cover all of your school-certified expenses. There is a 6-month grace period on this loan and you can defer payments for up to 48 months while you take on an internship.

Also available

Sallie Mae also offers student loans for those enrolled in Dental, Medical or Law school.

Eligibility

You must meet the following requirements in order to qualify:

  • Be 18 or over in most states
  • Be a U.S. citizen or permanent resident. If you are a DACA student or foreign resident and you have a U.S. citizen cosigner you may be eligible.
  • You or your cosigner must demonstrate sufficient income to repay the loan.
  • You or your cosigner must undergo a credit check.

Repayment

There are a number of repayment plan types.

With deferred repayment no payments are required until after graduation and the end of any grace period.

On a fixed repayment plan a fixed amount is paid every month until graduation (or the end of any grace period) and then the borrower begins to repay the principal and interest.

With an interest repayment plan the borrower makes payments against the interest accruing on the loan during school and then begins to pay off the interest and principal after graduation / grace period.

Do you need a cosigner?

International and DACA students do require a cosigner but U.S. students do not.

Don’t forget to search and apply for other types of financial aid like scholarships and tuition waivers before relying on a loan.

Funds from private loans, like federal loans, are usually disbursed directly to your school to cover tuition and other expenses paid directly to the school before any remaining funds can be sent to your own bank account.

If you would like to apply for a student loan first check your eligibility. You will be shown any lenders that have a suitable program for you and be able to compare their terms and interest rates.


In School Student Loan Deferment
September 24th, 2021 by Al C

In today’s world where student loans are the norm, especially for international students, it is increasingly important to be aware of how you can defer your payments while still in school.

This article will take a look at what exactly student loan deferment is, how it works and how to request to defer your student loan payments. It will also discuss some resources for more information on this topic, including how deferment applies to federal student loans and private student loans.

What is deferment?

Let’s get started with the most important thing to cover – what does deferment mean? In general terms, deferment is when you are allowed to put off paying your loan for a time under certain conditions.

On the surface this seems like a great idea because you are allowed to stop making your monthly loan payments for a time – up to three years in some cases. However, deferring student loans should only be done if you have no other options because during the deferment period you are not reducing your loan balance but your loans accrue interest. This means the total amount you owe, and the total cost of borrowing will increase.

If you’ve borrowed from a private lender then your student loan debt will only increase if you stop making monthly payments. However, federal student loan deferment if you have subsidized loans or Perkins loans can be a good idea because you do not accrue additional interest on federal student aid during deferment.

In the case of international student loans, students who are enrolled at least half time may be offered a repayment plan by their loan servicer that includes a period when no monthly payment is required or the payment is significantly reduced. Often this is during full time studies and until up to six months after graduation.

Deferment, Forbearance and Loan Forgiveness

You have probably heard all three of these terms and you’d be forgiven for being slightly confused about the similarities and differences.

Deferment and Forbearance

Student Loan Deferment and Loan Forgiveness are very similar. Both are temporary solutions for borrowers struggling with student loan repayment. Deferment can be granted for up to three years and forbearance usually up to 12 months.

Both are available on most federal student loans, and interest is accrued during deferment with the exception of subsidized loans or the Perkins loan. Private lenders are not obliged to offer any kind of deferment or forbearance options, but many do – especially in the form of a payment plan where student loan payments are zero or greatly reduced (sometimes interest-only) during school and for up to 6 months after graduation.

Making use of approved deferment or loan forgiveness will not negatively affect your credit score – missing a payment before you have been approved will. However it will impact the length of time and the total amount you repay.

These options are short-term solutions, an income driven repayment plan may be a better option if you believe that your ability to repay your loan will be affected long-term.

Loan Forgiveness

As suggested by the name, this is when the lender writes off or cancels some or all of the outstanding payments remaining. This is only used in extremely rare occasions such as foreclosure, bankruptcy or some kind of government legislation.

How in school deferment works

To defer student loans, you need to meet the requirements set out by the lender (or the government). For example, you might have a maximum of 3 years where you can defer your loan.

To request deferment, you need to send your student loan servicer the completed application form and any necessary supporting documentation. If you qualify, they must grant you the deferment. It’s important that you keep making payments until you receive the official notification from them saying that the application was approved. If you stop making the required repayments before you get the approval, this can affect your credit in the future as it will be a missed payment.

How long does an in-school deferment last?

In-school deferment lets you pause your student loan payments while you are an undergraduate, graduate or professional student enrolled half time or more on an approved course of study at an eligible college and for up to six months after graduation. This includes studies on an approved graduate fellowship program.

How to defer student loans for grad school

The process of student loan deferment is the same for graduate programs as for any other students that qualify.

How many credits to defer student loans?

In order to qualify for student loan deferment you will need to be taking enough credits to be considered as attending school half time or more. In most cases an undergraduate is considered to be full time when taking 12 credits per semester – 9 for a graduate student.

References and resources about student loans and financial aid

For resources on International Student Loans visit the resources page.

If you are looking for an international student loan in the US you can find information here.

If you are studying in Canada loans are available for international students.

Find your international scholarship with the IEFA international scholarship search.


Things to Consider Before You Study Abroad
September 10th, 2021 by Al C

international students face many challenges including financial ones

There are many reasons why study abroad is not for everyone. You need to be aware of the costs, benefits of studying at home or abroad, and the pros and cons of taking out student loans for study abroad before you can make a decision on whether or not it will work best for you.

Study Abroad Costs

Remember that the cost of studying abroad is not just tuition, but also many other expenses such as accommodation and living expenses. A study abroad program is not cheap.

To make the most of your money, it’s important to budget accordingly. Consider everything you need to live like at home: food, clothing, transportation, books and school supplies, entertainment, insurance (health and travel), and incidentals (phone service, toiletries).

When you do this math ahead of time with realistic figures for your destination country, it’s easier to know what you can afford and if you’ll be able to go.

For help with budgeting and other practical questions see our budgeting guide [here].

What you might gain from studying abroad (or not)

Studying abroad is a great opportunity for a student to broaden their horizons and experience new cultures, countries, and lifestyles. It is an experience that will give them new perspectives on life that will have a great impact on them for years to come. Studying abroad will help their resume as they often learn different languages and customs.

But if you choose to study in your home country instead, you’ll benefit from having your parents or other family members available to help you when you need it. Your family will be in the same time zone, and much closer should an emergency arise. You won’t have to deal with language barriers either; instead, everyone speaks your language!

But maybe even more important than all of these is that studying abroad isn’t for everyone.

Don’t be pressured by parents, friends, or family members to do it if you’re unsure about doing so. It takes time to adjust when studying abroad in a different country, so before you commit to something that will change your life forever, consider your options carefully.

Taking out a Student Loan for Study Abroad

federal student aid is not usually available for international students in the U.S.

It’s rare for students or their families to be able to cover the full cost of a study abroad program without additional financial aid.

Many students get study abroad scholarships or are able to work to help pay for costs, but sometimes they need to take out a student loan. If you’re considering this option -and it is an option- be aware of the pros and cons of getting a student loan for studying abroad.

Student loans for study abroad are different from student loans for studying in your home country.

For U.S. citizens or permanent residents, federal student loans can be used for study abroad programs as long as you meet all the criteria. There are also private study abroad loans. If you choose to study your entire degree program abroad then you may still be eligible for federal funding or private “foreign enrolled loans”.

For other international students the availability of loans to study abroad depends upon your nationality and your destination country. U.S. federal loans are not available for international students in studying in the United States, but there are some federal student aid programs that can help certain groups like DACA recipients. Non-citizens would need a private international student loan.

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Understand the pros and cons of taking out student loans for study abroad before making a decision

private loans can support your international education dreams

A student loan is a type of loan that enables you to pay the costs of your education. It can also cover for the cost of living, books, and even tuition fees. The great thing about a student loan is that it is quite manageable, as the monthly repayment is calculated to be manageable for a student or recent graduate.

As there are a limited number of lenders that specialize in international student loans, you’ll be working with a company that has the expertise you need in this area rather than a generic lender. This means you can expect a higher level of service at every stage of the application process.

On the other hand, the bad side is that student loans are not as common as other types of lending, and therefore there is less information about them.

Of course, the main downside of a loan is that you have to repay it plus interest, and since you’re probably going to be a student or fresh graduate with little income, the repayment may seem difficult at first. Student loan debt is no joke if you let it get out of hand and borrow more than you need (and more than you can afford to repay).

Student loans for study abroad can also be quite tricky because you have to take into consideration things such as the currency exchange rates and the different cost of living abroad.

At internationalstudentloan.com we match our readers with the best student loan lenders based on their situation. If you want to use educational loans for your studies, we hope this will help you select the right lender and loan for you.

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Research schools abroad and in your home country to make sure you make the best decision for you

there are many financial aid options for international students

Before you can really decide if studying abroad is the best option for you, you should research your options both at home and overseas to find the right combination of school or university plus course plus location.

You may find that some schools abroad are better suited to your needs than similar schools in your home country, and if this is the case then studying abroad is probably a good option for you.

Or you may find that there are similar options in your home country and studying abroad doesn’t suit your needs.

When you’re looking to study abroad, learn as much as you can about the school you want to attend; don’t choose a course purely because it’s cheaper than similar courses at other universities and colleges.

Other considerations:

Safety

It’s easy to take your safety for granted when you are near home, but when you’re abroad there are additional considerations such as crime and health risks, which can affect your study abroad experience. When picking a campus and housing location, keep this in mind. Ideally your campus should be located in an area where you feel safe, as should your living arrangements.

Language skills

Another consideration is language issues. For example, if you are from a non-English speaking background and want to study in the United States, you’ll need to demonstrate good English language proficiency when applying for or enrolling at an American college or university. You may be able to take some English language proficiency courses before starting your degree course, but this will depend on the college or university you choose and how intensive it is.

Money issues

The cost of living in different countries is very different, so don’t assume that the tuition fee for a college or university abroad is similar to what you would pay at home. For example, English universities charge international students up to three times more than domestic students, and in some countries international students can pay up to ten times more than locals.


At internationalstudentloan.com, we are dedicated to helping students get the best student loans possible for their education abroad. We’ll help you find the right lender and loan combination that suits your needs so you can focus on what’s really important: studying!

As a new graduate with little income, it may seem difficult to repay your student loans at first but our partner lenders have experience working with international students who want to study abroad. You can rest assured knowing that after signing up for an educational loan from one of our approved lenders, you will be matched with someone who understands how your brain works when making decisions about your student finances.


International Student Financial Aid Guide
August 27th, 2021 by Al C

Financial resources for international students

International student financial aid is a necessity for almost all international students wishing to study abroad and often times it can’t be obtained without applying for an international student loan.

Many international students, however, need a loan in addition to any awards or scholarships received. So what are these loans and how do you get them?

In this article we will explore both topics in order to provide some basic understanding of the complicated world of financial aid for international education, international student loans and how they work.

Read on if you would like some clarity into this confusing topic!

Why international financial aid is necessary

Financial aid for international students is necessary for almost all international students because the cost of studying abroad is more than the average student can afford – even with financial support from their family.

The average cost of studying abroad for a year can range anywhere from $30,000 to more than $70,000

Some of the most expensive in demand countries include the United States and the United Kingdom.

In both cases the tuition fees are more expensive for international students, and you need to add in other necessary costs such as accommodation and food.

The cost is around three times higher than what a student would have to pay at home for the same program.

How to get financial aid for international students

It is not easy to get financial aid as an international student and it requires you to work hard in order to obtain it. The first place to look for financial aid is with the school or university you will be attending.

Federal financial aid is not usually available for international students

In most cases students going to a school in the U.S. must first complete a FAFSA (Free Application for Federal Student Aid) and apply for any government funding available – this is often the case even though international students are not usually eligible for federal aid.

Most universities have their own financial aid options and scholarship programs that international students can apply to. Some are merit-based while others are need-based. It is important to complete your application as soon as possible as most programs and scholarships only have a limited number of positions available.

There are also many scholarships for international students offered through private organisations that can be applied for online and there is no shortage of options. Search the database of international scholarships at www.iefa.org/scholarships.

Often times these scholarships have specific requirements, such as a minimum GPA and/or language proficiency but there are also general scholarships available. Once you have completed your application, it will be reviewed by the selection committee and if selected, you will be awarded a scholarship.

Lastly, remember that an international student loan is only a last resort after all other funding has been exhausted – it should never be used instead of applying for scholarships and/or government funding.

international undergraduate students

There are a small number of lenders who specialize in loans for international students, but they are not available in every country or at every school or university – a lender must have a suitable program for your chosen institution and you must meet their other lending criteria.

Another factor in the availability of loans for international students is that some lenders require you to have a cosigner (also known as a guarantor or co-borrower) who is legally responsible for repaying your loan if you fail to do so. That cosigner must be a U.S. permanent resident.

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Paying back your international student loan

Repayment of an international student loan will depend on the terms set out when you took the loan. Different lenders will have different repayment terms and interest rates.

Some lenders will allow you to defer repayments until after graduation while others will want you to start repaying your loan immediately.

Whatever repayment plan you have, your lender will be able to give you the exact details about how much you will have to repay and when – and you should be able to see the total cost of borrowing (including all interest and fees).

International student financial aid is a complex topic and it’s important for prospective students to research their options before making any decisions. There are many ways you can get financial assistance, but the first place to look should always be with your school or university. Your institution may offer scholarships that don’t require an essay; these are often need-based programs so if you’re struggling academically, this might not be a good option.

The next step would be to search the database of international scholarships at www.iefa.org/scholarships where there is no shortage of opportunities available (although some do have specific requirements).

Lastly, remember that borrowing money shouldn’t ever substitute applying for other sources of funding such as government grants or private scholarships – international loans should be used as a last resort. It is also important to look at the terms and conditions of your loan and understand where you currently stand financially before taking on any financial responsibility – if you have to take out an international student loan, make sure that it’s done with care.


What’s the difference between foreign enrolled and study abroad loans for U.S. students?
May 27th, 2021 by Al C

US Student study abroad

Studying abroad is a great way to broaden your horizons and experience different cultures. It’s also an excellent opportunity for students to improve their language skills, or study subjects that are not offered in their home country. International students overwhelmingly report benefiting greatly from the experience during their time abroad and in the impact on their future careers as well.

One of the most frequently asked questions U.S. students ask themselves when they’re considering a study abroad program is whether they should apply for a foreign enrolled student loan or a study abroad loan?

This blog post will help explain the difference between these two loans so you can make an informed decision about how much money you need to borrow while you’re away from home.

Financial Aid

The first thing we always suggest to US citizen or permanent resident students who want to study abroad is to focus on all types of financial aid that they are eligible for as well as private student loans. In the case of US citizens, permanent residents and eligible non-citizens, this means looking for federal student aid, federal student loans, grants, awards and scholarships. Interest rates on federal student loans are usually more favorable than with a private loan program.

Getting an international student loan from a private lender would be the next course of action if for some reason you didn’t apply for the FAFSA, or you didn’t meet the deadline, don’t qualify for federal aid, or if you still need additional funding to cover the cost of your international education experience.

If you’re already attending college in the US speak to the financial aid office and the study abroad office at your school for their guidance.

International Student Loans

Study Abroad Loans for China

The international student loans we will discuss in this blog post are “Study Abroad Loans” and “Foreign Enrolled Loans“. These 2 loan types are for American students outside the US studying at schools or universities that are approved by the US Department of Education.

The difference is in the type of study abroad program that you are taking.

Study Abroad

These student loans are for those students taking on a short period of international study at an eligible school around the world – often short programs, a semester or a one-year course.

Study abroad students are enrolled at their “home” college, and only travel to international schools for part of their degree. For this reason more private lenders are available for these loan programs because more U.S. schools are approved.

It’s likely that there are study abroad counsellors to advise you on your funding options and help you chose the perfect university to visit.

Find Study Abroad Loans here.

Foreign Enrolled

These loans, in contrast, are for a US citizen, a permanent resident or an eligible non-citizen, who decides to enrol full-time at an overseas college for the duration of their degree – and these are for undergraduate and graduate students.

Foreign enrolled students have no “home” college in the U.S. because they are a full-time international students at their chosen university. This means that funding, and in particular loans are available at fewer schools, however there are many! You can check if your school is eligible here. For a school to appear on the lenders’ lists where a loan program is an option, they must first be approved for federal loans through the U.S. Department of Education.

Find Foreign Enrolled Loans here.

Eligibility requirements for student loans

Students studying abroad are no different from those studying on home soil in the eyes of the lender. No matter where you are studying, you will need to prove that you are creditworthy (meaning that you have good credit).

Because many students do not have enough credit history in their name to demonstrate creditworthiness, it is highly recommended that they ask a US cosigner to join their student loan application.

A cosigner (co-borrower, sponsor, or guarantor) joins the loan application in order to help the primary borrower to qualify, to improve the chances of securing a favorable interest rate on the student loan, and most importantly to guarantee to the lender that if the primary borrower fails to repay their student loan, the cosigner will do so.

With a cosigner, lenders will be able to use their credit score when making the decision on whether to approve the application.

Loan amount

Getting some or all of your education overseas can be expensive. The maximum loan amount that you can borrow will be set by the lender you choose, but your school must also approve this as you may not borrow more than the total cost of attendance.

Interest Rates

Interest rates on these loans are set by the provider. Applying with a cosigner is recommended to get the best interest rate available. To learn about fixed and variable interest rates see our resource here.

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Loans for international students in Canada – cosigner not required!
January 16th, 2021 by Al C

Until recently loans for international students in Canada were not widely available – but things have changed. Read on for more!

Hand holding maple leaf - Loans for international students in Canada

The Canadian Bureau for International Education reports that over half a million international students studied in Canada in 2018. That’s more than a 150% increase since 2010. As a result, Canada has overtaken France and Australia to become the 4th most popular destination for international students behind the USA, the UK, and China.

Once students have exhausted all other available sources of funding such as family support, personal savings, and financial aid from their school, they often need to turn to a student loan to cover any remaining costs of their studies.

This was very difficult to do until recently because of the lack of availability of loans to international students in Canada.

Now, International Student Loan allows these students to connect with loan providers where they can access loans without requiring any credit history, without needing any collateral, and even without a cosigner. These loans are available to students enrolled in Bachelor’s and Graduate degrees in any academic field from countries around the world at 300+ colleges and universities across the USA and Canada.

Students who will be graduating within two years – whether they are undergraduate or graduate students – may apply.

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The Benefits Loans for International Students in Canada – without Cosigners

  • For this type of loan, you don’t need any credit history in the US or Canada, a cosigner, or any collateral
  • You can borrow from $2,001 to $50,000 with a fixed interest rate
  • Students from over 190 countries are eligible to apply for these loans
  • There is a 10-year repayment period and no prepayment penalties
  • During school and for 6-months after graduation there is a lower, interest-only payment period, making it more affordable at the time
  • These loans are available at over 300 schools across the USA and Canada
  • Undergraduate and graduate students who will be graduating within two years are eligible
  • You can use the funds to pay for expenses including tuition fees, accommodation costs, food, student insurance, and books
  • They can be used for past, current, and future semesters.

How does the process work?

  • Check to see if your chosen school is on our list
  • Complete your application online in just a few minutes
  • Receive a conditional offer from the lender
  • Upload documents the lender requires to complete your application.
  • The lender checks to make sure everything you have provided is in order, then sends you final approval of your loan
  • The lender contacts your school to confirm your enrollment status. Once this is done, your funding is disbursed directly to your school

How much will the loan cost?

Every case is different. This example is for informative use only. This is not a guarantee of costs as they will depend on your individual circumstances and the lender you work with.

An international (non-US, non-Canadian) student, studying a graduate-level program who borrows $10,000 US dollars can expect to repay $100.54 a month while they are studying and for the first 6 months after graduation. After this time the repayment would be $141.62 per month.

Why is Canada such a popular destination for international students?

  • The Canadian education system is internationally regarded as being of very high quality
  • Canada is considered a safe country with a tolerant and non-discriminatory society
  • 96% of international students recommend Canada as a study destination, and 60% of international students say that they plan to apply for permanent residence in Canada.

Who are the international students in Canada?

The nationalities with the largest populations of students in Canada are:

  • Chinese ( around 28% of all international students)
  • Indian (approximately 25%)

US students represent only around 3% of all international students in Canada.

Where are the international students in Canada studying?

The Canadian province with the largest number of international students is Ontario (with almost half of all international students). The next most populous provinces are British Columbia (a quarter) and Quebec (about one tenth).

Find out more and apply for your International Student Loan in Canada today:

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More on Loans without a cosigner in the USA and Canada

How can an international student finance their education in the USA?

International Student Loans for Students from the UK


How can I afford college as an international student in the US?
January 12th, 2021 by Al C

Studying abroad and specifically in the US is a dream for millions of students around the world. More than a million students apply for colleges in the US  every year. But most of the students and their families can’t afford the tuition fees and other related costs. In 2019 international students paid over $26,000 per year for public colleges and $32,000 for private colleges on average.

Group of Students in the US - How can I afford college as an international student in the US?

So, how do they pay their international college tuition fees?

International Student Financial Aid:

Financial Aid for international students varies depending on the school and the degree chosen. This financial aid most commonly provides financial support to graduate students, and it is less common for undergraduate students.

Most of the financial aid for international students comes from research and teaching assistance programs. These programs provide paid research and teaching responsibilities to graduate students. Also, financial aid can be funded by grants and scholarships as well. Unlike a loan, you don’t have to repay these types awards in the future. 

Also, it can depend on the country you come from, your family assets and background, your merits, existing student loans, and other factors. 

International Scholarships:

Some scholarships are based on the country you come from or your average grades, chosen subject or skills. Some of the scholarships depend on your TOEFL score. There are also sports scholarships available in some schools. You must do proper research on the scholarships available in your school to see if you are eligible or not.

Students in the US graduating - How can I afford college as an international student in the US?

When you find a scholarship you’re eligible for, contact the scholarship administrators and apply for it. It is an effective way to reduce your overall tuition fees. Also, you might be able to win scholarships by winning contests and competitions.

You should search online for international scholarship opportunities and International Financial Aid.

International Student Loans:

International student loans provide financial support to students who want to study in the US. Mostly through banks and private organizations. The terms and policies and interest rates vary between lenders and organizations.

Private student loans are more expensive than federal student loans, but international students are usually excluded from Federal programs. You should consider choosing scholarships and grants as sources of financial aid first. If there is still a gap between the funds you have and the cost of your education, you should consider getting an international student loan.

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Repayment also varies depending on the terms and policies of the lender you choose for your student loan. There are multiple ways you can repay your student loans: Immediate Repayment, Full Deferral, and Interest Only are the standard methods to repay student loans.

It may seem like it is very challenging to cover all the costs to study in the US. But it is not impossible. There are multiple opportunities available for you to explore.

Please note: You should be aware of scams and scammers while looking for funds. There are people ready to take the advantage of you, so always go for reputable and verified schools and lenders.


Understanding Your International Student Loan
October 30th, 2020 by Al C

Student confused about international student loans

You’ve researched the total cost of attendance, done all your calculations and budgeting, you’ve applied for as much financial aid as you can from your school, and you’ve even been awarded a scholarship – but what if you’re still not sure if you can cover all of your costs?

Well, the good news is that an international student loan can help – but don’t just take on a loan without first understanding what you’re getting into.

What is an International Student Loan and How Do They Work?

International students have fewer options than domestic borrowers. Unless you’re an eligible noncitizen who can qualify for federal student aid, you will have to borrow from a private lender, as federal student loans are reserved exclusively for US citizens.

International Student Loans are specialized private education loans that are available for international students who are studying in the USA or Canada. We recommend that you only apply for international student loans after exploring all other options like scholarships, personal funds and other options.

Undergraduate students and graduate students can apply.

A number of lenders offer student loans for international students, but most require the borrower to have a creditworthy co-signer who is a U.S. citizen or permanent resident to join the application. The co-signer will need good credit to be approved and to help you get the most competitive rates.

If you’re not able to find a co-signer, some lenders do offer loans without a co-signer, but only at select colleges and universities, and you’ll usually pay higher interest rates on these loans. 

If you need to borrow money to help pay for university, it is important to understand how these loans work before you sign the paperwork.

Student loans typically have lower monthly payments and lower interest rates than other types of private loans, and repayment terms are also usually more relaxed. But remember that the total cost of the loan is greater than the amount borrowed due to the cost of borrowing. Most lenders don’t require full payments while you are still attending school, in fact many offer a period of time after graduation before repayments even start.

The funds of your student loan will normally be paid out (disbursed) directly to your school at specific times to pay for direct university-related expenses. Funds are not usually transferred directly to the student, however any surplus funds will be paid into your nominated bank account after you have covered all of your university costs.

How do I apply for a private student loan?

Learn about applying for a private student loan

One option is to research all the private student loan lenders and fill out all their applications. This can be time consuming and frustrating, because you may find out after all that work that you aren’t eligible for a loan with that lender.

Another option is to first find out if you are eligible and compare lenders using the loan comparison tool at internationalstudentloan.com/apply – it takes less than 10 seconds to find out if a lender is available for you based on your school and circumstances.

You can then apply online directly with the lender, knowing that they should have a plan that works for you.

After that, approval of your loan can happen in just a few weeks.

Who is eligible to apply for these loans?

To apply you should not be a U.S. citizens or permanent resident, and you must be attending an eligible U.S. or Canadian college or university. In most cases you must be attending full time – part time students may not be eligible. Undergraduate students as well as those taking graduate degrees may apply in most cases.

Also, borrowers are required to have a creditworthy co-signer who is a U.S. citizen or a non-citizen permanent resident for most lenders. You and your co-signer will undergo a credit check.

Loans that do not require a co-signer are available at a number of schools, and these will be shown in the loan comparison tool. If you do not have a creditworthy co-signer and you are an undergraduate student you may find it harder to secure a loan until you are within 2 years of your expected graduation date.

Your field of study usually doesn’t affect your loan application, although there are special categories of loans for medicine.

Use the loan comparison tool to see which loans you are eligible for.

What can the funds be used for?

what can funds be spent on?

Like all private education loans, loan funds can be used for education-related costs including tuition fees, books and supplies, other school fees, insurance, transportation, room and board (living expenses) and other school-related expenses.

Speak to your school’s Financial Aid Office to check their published Total Cost of Attendance which will give you an official estimate of the total amount of funding and financial aid you will need to cover all of your costs.

Application Process

Begin by using the loan comparison tool. This will show you the options available to you and allow you to choose the lender best suited for your situation and needs.

You will then apply directly with the lender. You and your co-signer (if required) will need to complete the entire online application thoroughly and supply any documents requested by the lender.

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Interest Rates Explained

interest rates graph

When you take out a loan through a lender, you will be responsible for paying back the amount of money you borrowed (called the principal) plus an additional amount charged by the lender for the loan known as the cost of borrowing.

This interest rate is calculated based on an “index” plus a margin that will add an additional percentage interest rate depending on your or your co-signer’s creditworthiness. Every lender’s range of rates varies so it is important to do the loan comparison and review the interest rate and repayment terms.

The two most common indexes used for international student loans are the Prime Rate and LIBOR Rate.

When your application is approved, the lender will provide information on your specific interest rate and you can then decide whether to accept the loan or not.

Interest begins to accrue (build up) as soon as the funds are disbursed to your school. Interest will accrue on your loan while you are in school, even if you are allowed to defer repayments until after you graduate.

Repayment Options

After you select the loan that works best for you, you will need to review the terms or contact the lender directly with any questions. 

Repayment terms will depend on the lender and details of the loan you choose. It is important to consider how much your monthly payments will be, when these payments will start, and how long you may be able to defer (delay) beginning to pay back the loan (known as periods of forbearance). The repayment period typically ranges from 10-25 years, however the larger the loan the longer the repayment period.

You may be offered the following repayment types by your lender:

Full Deferral

You may be able to defer payment of both the interest and principal until up to 6 months after graduation as long as you continue to be enrolled full-time. Payments can be deferred for a maximum of 4 years – the typical length of a degree.

Lenders may refer to deferral as periods of forbearance.

Interest Only Repayments

You start making repayments while you are at school, but only pay the interest for up to 4 consecutive years of full-time study. You can then defer repayment of the principal until 45 days after graduation. With an interest only repayment type you may have to start repaying the principal immediately if you drop your course load to part-time.

Immediate Repayment

You immediately start making payments on both interest and the principal once the loan has been issued and disbursed.

What about Federal Student Loans?

Federal loans and federal student aid are not normally available for international students.

What is the FAFSA I always hear about?

FAFSA is the Free Application for Federal Student Aid. Even though international students are usually not eligible for this type of aid, your school may require you to complete the application in order to help them determine your eligibility for other funding.

What if I have specific questions about my loan?

Once your loan has been approved, if you have any questions you should contact the lender directly for support.

We really hope this helps you with understanding your international student loan!


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