If you are planning to apply for student loans come July or August, it’s important to know key terms so that you can evaluate lenders and choose the one that works best for you. The international student loans that are available have different repayment options. Repayment is defined as the act of paying back the money (with interest) that was initially loaned to you. It means that you are looking not only at how much you are borrowing, but the timing – when will you be expected to begin paying back the loans? So let’s take a closer look at student loan repayment.
Borrowers typically have three different options available on private student loans, it includes full deferral, payment of interest only, or immediate interest and principal repayment. We will explain the three options below, however keep in mind the further you delay payments the more money the lender will expect you to pay.
- Full Loan Deferral – Student loans with a full loan deferral mean that you will not be required to pay back interest or principal until 6 months after graduation, or if you are no longer considered a full time student. Keep in mind that interest will accrue during the deferral period and will be added to the amount you owe.
- Interest Payments Only – As the name alludes, you will only pay back interest while you are enrolled in school and the principal (and remaining interest) will be deferred until 45 days after graduation or if you are no longer considered full time. With this option, you will be required to begin making payments on your loan while you are in school, but since you will be paying back interest during this period – you will owe less since you will not be deferring interest as well.
- Immediate Repayment – This means that once you’ve received your loan, you will begin immediately making payments back to the lender to cover both the principal and repayment. This option requires you to pay back the money right away, and thus is typically the less expensive option since you do not defer payments (and accrue more interest).
Interested in learning more about student loans? Check out our previous blog on understanding interest rates.
The amount of students who study abroad – defined as U.S. students embarking on a short-term course of study in another country – is increasing every year. And while your financial aid package through your home school will typically be continued even during this short time away, the added expenses of the international experience can mean needing even more loans. But when should you apply for study abroad loans?
The simple answer is that it depends on your situation! If you’re wondering “When should you apply for study abroad loans?” and looking for a hard date, there isn’t one. That is because study abroad loans will almost all be from private lenders, which do not in fact have application deadlines like federal loans or financial aid through a school.
So the right time to apply is all about the specifics of your own situation. A few things to consider:
- You only want to borrow as much as you need, so you’ll have to have a complete picture of your total study abroad costs, your existing financial aid, and the amount of ground you have to make up between them before you go ahead getting a loan. This may mean waiting for your school to finalize your financial aid package for the semester in question, holding off until you know the specifics of your living arrangements abroad, or planning out your incidental expenses for diversion. And it goes without saying that you don’t want to be overly proactive and start taking out loans before you’ve even been accepted into a study abroad program!
- Leave time to compare student loans to get the best deal. It’ll take some research, and even the lowest interest rate may not be the best fit for you if it comes with less favorable repayment plans, deferment options, and so on. Don’t get stuck with a bad loan just because you didn’t have the time to vet your options.
- Make sure you line up a cosigner. The personal approval and financial fallback plan represented by a cosigner will get you lower interest rates and a better loan in general, but you’ll have to leave time to work through the paperwork. Again, this is not a thing to be left until the last minute.
So when should you apply for study abroad loans? As long as you make sure you have your full financial picture, thoroughly research your options, and get a cosigner, there’s no wrong time!
* Airplane flying around the world photo courtesy of Shutterstock
Study abroad is one of the most rewarding experiences for students. After studying abroad, many students return home with memories that last a lifetime. If you don’t agree, just look at the numbers! According to the Open Doors Report, 270,604 US students studied abroad in 2009-2010. This milestone represents the largest number of US study abroad students, marking a 3.9% increase over last year. Whether the attraction is cultural immersion, learning a new language, building professional skills, or to gaining international experience, you may not be able to afford NOT to go.
So then comes the question, how do you finance your study abroad so that you can take advantage of these opportunities as well?
If you are looking to finance your study abroad, you first need to look for opportunities that are free gifts and do not require you to pay back the money. This includes scholarships and grants offered to students. Your financial aid counselors or advisors can be an enormous resource as they may be able to recommend funding options and help you budget wisely. To make sure you take advantage of all of the scholarship opportunities, you should not only contact your financial aid office, but also your study abroad office, academic department, clubs and organizations, national organizations with ties to international education, religious and civic organizations, and perhaps even places of work for you and your parents.
Once you’ve maximized your grants and scholarships, you may find that you need additional financial assistance. Stafford loans are another great way to help fund even more of the expenses. It’s important to note, however, that federal loans have limits on how much you can borrow. To put this in prospective, the maximum Stafford loan that students can borrow is $5,500.
Finally, private study abroad loans are another avenue to finance your study abroad. While you should always maximize scholarships and grants followed by federally backed loans, private student loans can also help you get the financing you need to make your study abroad a reality. If you are thinking about taking out a loan, it is important to realize that loans will need to be paid back along with interest. Consider how this debt will affect you, and develop a plan that will allow you to pay back your loan on time.
Financing your study abroad is no easy task – especially as costs can easily add up while you try to make the most of your international experience. The payoffs, however, are unquantifiable especially in this day in age where the world is interconnected no matter what career path you choose.
What a difference a week makes in the world of financial aid. After all, at this point a week ago, there was every indication that federal student loan interest rates – which had been set to double on July 1st due – would do exactly that. Although both US President Obama and Mitt Romney, his Republican challenger – not mention quite a few members of Congress besides – voiced support for measures that would prevent this automatic increase of interest rates.
With such broad support, in and of itself, there was not enough to reconcile differences between the two parties on how to pay for the bill or, ultimately, to bring the matter to a vote. With the issue of funding unresolved, as Congress approached the weekend (and its weeklong recess to commemorate the US’s Independence Day), the general consensus at the Capitol was that, come the new month, the interest rate on federally backed student loans would jump from 3.4% to 6.8%. While this measure only affects federal loans – and not private international student loans – this would indeed affect those students who plan to study abroad with federally-backed student loans.
In the end, though, what a difference a week makes. In a rare flurry of bipartisanship in the United States, an 11th hour compromise was reached. The leaders of the two major parties in the Senate found common ground on how to pay for the nearly $6 billion cost of the measure on Tuesday and it was this compromise measure that passed the House 373 to 52 Friday and, later the same day, the Senate itself 74 to 19. The US President, who actively called for the legislation, signed it into law on Friday. In so doing, the change is estimated to help more than 7 million students who currently receive Stafford loans by saving them an average of $1,000 each on their loans.
Are you an international student looking to apply for a loan? With the added cost of travel, living expenses, tuition, and books, students may sometimes find that they need additional financial aid to support their dream of studying overseas.
If you are going to apply for a student loan, you may find that some US lenders don’t work for international students. You may also find that if they do – lenders only work with select colleges and universities.
If you are an international, study abroad, or foreign enrolled students, we’ve made the steps to apply for an international student loan even easier. We’ve streamlined the process so that you can quickly be matched with lenders that work for you.
Here is a simple guide with the steps to apply for an international student loan:
- Step 1. You can complete the compare student loan tool by selecting your citizenship and school on our International Student Loans partner site.
- Step 2. Click compare student loans.
- Step 3. Review the basic terms and conditions of each lender – and choose the one that’s right for you.
- Step 4. When you’ve decided on your loan, “Apply Now” to begin the application right online.
It’s just as simple as these easy steps to apply for an international student loan. You can get initial approval as early as a few weeks of completing your application. Keep in mind, student loans require you to pay back the amount you borrow along with interest. It is important to consider all of your financial aid alternatives and maximize funding from scholarships and grants first before applying for a loan.
International Student Loan has re-launched its website, with a new loan matching system, improved navigation and an updated design. International students will now be matched to an appropriate loan product much more quickly, simplifying product selection and application.
Instead of requiring a student to navigate through the site to the appropriate loan product, now students can use the simple form to quickly find out if they are eligible to apply for a loan, and if so, what loan is appropriate. The new system will also allow International Student Loan to work more easily with multiple lenders, making sure that they can keep up with the rapidly changing market and deliver the best loan products to students.
The new site also has a cool new look – wider, with more images and a more current look. The content has been updated and added to, so students can get the information they need quickly.
For international students studying in the USA, and for US students studying overseas, the financing options are more limited than for domestic study. Through International Student Loan, students can apply for up to the total cost of education, minus any other aid received. A US co-signer is required for all international students and most US students.
Check out the new site: http://www.InternationalStudentLoan.com
About InternationalStudentLoan.com: InternationalStudentLoan.com is owned and operated by Envisage International Corporation and headquartered in Neptune Beach, Florida. As a NAFSA Global Partner and with an A+ Reliability Rating from the Better Business Bureau, InternationalStudentLoan.com has been helping students from all over the world achieve their goals of international education since 1998, and has become the leading destination for international education financing.
Click here to subscribe to our blog and get an update when the next post comes out.