International student loans can be a tricky prospect, especially for incoming freshmen without any experience getting them. Follow these Top 10 Student Loan Tips to help you navigate the world of international student loans!
1. Find a cosigner with established credit
Most international students must have a cosigner in order to apply for a US student loan. Because of this, it’s important to find a cosigner that has good credit history. Since these are non-collateral loans, lenders are going to evaluate the financial capability of your cosigner. Not only will a good cosigner improve the likelihood of getting a loan, but it will also land you a better interest rate and more favorable terms.
2. Don’t just consider the interest rate
The interest rate is the most important factor when evaluating an international student loan, and rightly so. But it’s not the only factor there is. A loan with a low interest rate is good, but what about any other fees or repayment terms? Thoroughly research your loan to make sure you know all the details.
3. Find loans that defer interest
One of the best student loan tips beyond low interest is finding a loan that holds off on accruing interest until you’re finished with school and ready to begin repayment (and hopefully have a job!). This can make a huge difference in the final amount that you will pay for the loan.
4. Only borrow as much as you need
This may seem like a no-brainer, but too often students don’t put enough work into projecting their schooling costs and wind up borrowing significantly more than they need. Be honest with yourself about your expected spending and make sure you only borrow enough to meet your needs (and not your wants!).
5. Pay it off as soon as possible
Another seemingly obvious strategy, but many students wait until a loan payment is due and then only pay the bare minimum to avoid default. Don’t stretch yourself too thin, but if you find yourself able to pay off part of your loan ahead of time or pay more than the minimum monthly payment, do so and get the loan off your back earlier!
6. Reassess your situation with each new loan
As you progress through school, the loan options can change due to both your cosigners credit history and the shifting financial landscape. Don’t just stick with the exact same loan terms year to year – see if you can renegotiate for better terms or even look to another lender for a better option. But at the same time…
7. Consolidate your loans as much as possible
If you already have the best terms possible with the loan you have, keep things simple and stick with the same lender. Also try to get the full amount you need through just one loan a semester. Once you’re into repayment, see if you are able to consolidate your loans into fewer repayments plans as well. Doing this will mean a lot less hassle repaying your loans once you’re out of school!
8. Consider private loans
International students may not have another option, but even U.S. citizens studying abroad or enrolling in an international school should consider the world of private loans in their loan search after they’ve maximized any government assistance. As the demand for student loans increase, private lenders are beginning to offer better and better terms to compete.
9. Find a cosigner
This step will be mandatory for most international students, so start thinking about having a cosigner long before you actually have to finalize a loan! A cosigner should be a creditworthy person close to you, such as a relative or older friend, and they should be willing to cover your payments in the unfortunate situation that you are not able to.
10. Start the process early
Just like finding a cosigner, the best thing you can do to put yourself ahead in the student loan battle in general is to get started early! You don’t want to make any final decisions before you know the specifics of your school costs and financial aid package, but it’s never too soon to look into loans and see what kind of terms are available out there for students like you.
Student loans can be a huge, confusing mess, especially for international students. But keep these Top 10 Student Loan Tips in mind and you’ll be on the road to happy repayment in no time!