As an international student in the US, chances are you have to worry more about funding your education in the US than your domestic peers do. Because international students do not qualify for federal loans and often have to pay out of state tuition at state colleges, they generally end up paying more for their education than US students.
This infographic seeks to help international students explore their options when it comes to funding their education in the US. Renata and Cristian are both international students, one at a private university, the other at a community college. Like 63% of international students, each primarily rely on personal and family support to pay for their education. However, when something comes up, they both have to find different ways to support themselves.
We hope that this infographic will prove helpful to you as you learn about your different funding options. With the right combination of financial aid, we are certain that you will be able to afford your US education.
Click the infographic above to zoom in.
The new school year is almost here and while you may know where you are planning to study abroad – and perhaps even know what classes you’ll be taking – you may soon realize that you still have to get your finances in order. After all, the amount of financial aid available to international students can be quite limited. If you have finalized your budget for school and found that you still need help covering your expenses, you can apply for student loans for your overseas adventure.
Now’s the Time
July and August are the peak months when most international students apply for their loans. While loans can be applied to year round, this allows sufficient time to process all the necessary paperwork, get approved, transfer the money from your lender to your school, and for you to receive the funds from your university or college.
Understanding the Loan Process
To apply for international student loans, you can simply compare lenders and find the one that works best to suit your needs. Most non-US citizens will need to have a US cosigner who has been in the US for the past two years with good credit. The cosigner can only be a US citizen or US permanent resident. US citizens applying for loans are not required to have a cosigner, however this can reduce the interest rate and improve the likelihood of approval. Once you have your cosigner:
Apply for International Student Loans
To get started, you can use our comparison tool to see what options are available at your school. You will be able to apply for the total cost of your education minus any financial aid you receive. Remember, your school will need to certify the amount of money you take out, and because of this the lender must work with the school you’ll be attending. Our loan comparison tool takes all of this into consideration and only shows those lenders that work with your school so that it makes it easy for you to apply for student loans.
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.
Interested in learning more about student loans? Check out our previous blog on understanding interest rates.
Students going to college in the United States may be partly paying their way student loans, using them for everything from tuition and room and board to books and supplies. But the exact time for student loan disbursement, as important as it is, can be hard to pin down. So when are student loans disbursed?
Generally speaking, student loan disbursement is split between a school’s two semesters (or four quarters, three trimesters, etc.). This means that your $2,000 yearly loan won’t give you that full amount right away in the fall; you’ll get $1,000 for fall semester and $1,000 for spring semester. This splitting of the disbursement by semester is usually not a problem since tuition and fees are charged by semester as well – meaning you won’t be left with a huge bill to cover in the fall and only half of your yearly loan amount to help cover it.
When are student loans disbursed within each semester, though? The answer to that question is a little less definite because student loan disbursement ultimately depends on each school’s financial aid office and its specific policies. The loans usually show up in a student’s account sometime between the start of classes and the tuition payment due date. Before the funds actually show up, they will often be listed as “pending” so you can get a clear picture of what your financial situation will look like once the loan comes through.
There are some reasons that your student loan disbursement may be delayed, however. A delayed disbursement may be due to a failure to meet minimum enrollment or GPA standards, an unpaid fee from a previous semester which must first be settled, or various other factors. If you think your disbursement should have come through already, contact your financial aid office to see if there are any other snags like these you need to address.
So when are student loans disbursed? It’s not an exact science, but they come through in halves toward the beginning of each semester. If you’re waiting on student loans for immediate needs like housing or food, get in touch with your school to find out exactly when you’ll be getting them.
Coming to college in the United States involves a lot of expenses, and you may find yourself turning to a private loan to help you meet the financial burden. While loans can be great, it is important to understand the full financial burden of repaying them. One of the most important factors in picking a loan to help you finance your college education in the United States is understanding interest rates on student loans.
Interest is a fee that a bank requires you pay on top of the base loan amount so it can make money from the loan. Interest rates on student loans are given as yearly percentages. For example, a $1,000 loan with an interest rate of 7.5% APR (annual percentage rate) will mean a total repayment of $1,075 after one year of interest.
Stretch this out across years – even decades – of repayment, and clearly interest rates on student loans can have a huge impact on how much you pay in total. So how can you make sure you lower your interest rates on student loans?
To a certain extent, interest rates on student loans are fixed. Student loan interest rates are based off parameters set by reputable American and international banks and generally vary between about 2% and 9% APR.
But your student loan interest rates will also change based on the creditworthiness of your US cosigner. A cosigner is a financially responsible person who, by cosigning a loan, agrees to cover any costs that the original borrower can’t. Find a cosigner with a solid credit history (as an international student, you’ll need a cosigner in the US anyway) and banks will be more likely to give you a favorable interest rate on the loan.
Another way to lower the overall impact of interest costs is to repay your loan more quickly – thereby accruing less total interest. This can mean anything from paying a little more than the monthly minimum when you have the spare cash to choosing an official repayment plan that features earlier or more substantial regular payments.
Understanding interest rates on student loans is very important part of your college financing, so make sure to look into your best options before you decide on a loan!
International students who are looking to get a student loan to help pay for college will probably find themselves searching for a student loan cosigner. But finding a cosigner for your student loan can sometimes be a difficult process. Let’s break down who can be a cosigner for your student loan.
If you plan to attend college in the United States, your student loan cosigner will have to either be a U.S. citizen or permanent resident having lived in the US for the past two years, depending on the requirements of the loaning institution. How can you find this type of person if you don’t live in the United States in the first place? Try reaching out to your extended family to see if anyone has the required citizenship status. If you still can’t locate the right match, turn to trusted friends and ask if they know anyone who can help you. It can be daunting to ask someone a little less familiar to you for such a big favor as cosigning a loan, but if you’re having trouble finding the right person it may be a step you have to take.
The other major requirement of a cosigner for your student loan is that they have solid credit themselves. Since the main purpose of a student loan cosigner is to back up the loan’s repayment if the student cannot, having an established and strong credit history is an absolute must for your cosigner. This means a current stable source of income, low amount of other debt, and very few to no bad marks on credit history.
So enough with all the limitations – let’s look at the good news. Who CAN be your student loan cosigner? Well, as long as they fit the above criteria, pretty much anyone who is willing. Your cosigner doesn’t necessarily have to be a family member or even a close friend, doesn’t have to have any previous affiliation with the lender or your prospective college, and so on. So just make sure the cosigner for your student loan meets certain citizenship and credit history requirements, and you’ll be on your way to getting your loan approved!
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!
Many international students will find themselves turning to loans to meet their financial needs for college. One of the most important things for these students to look into right away in the loan search is finding a cosigner. While you won’t always need a cosigner for your loan, having one ready is a big help in case you do.
So what is a cosigner? A cosigner for a loan is a trustworthy, financially sound person who backs up a loan for an individual who may not have sufficient credit history or may not be able to show good credit history. From the lending institution’s perspective, this provides peace of mind (especially since many student loans are non-collateral loans, meaning that there is capital put down in case of non-payment). If you, a young international student, have a cosigner for your loan attesting to your character and financially backing your ability to repay the loan, the institution is much more willing to give you a loan in the first place or offer more favorable terms for a loan in question.
If you are an international student, no matter which loan or lender you choose to apply with, a cosigner is required due to the relative uncertainty that comes with giving loans to people out of the country. This person has to have good credit, be a US citizen or permanent resident, and has lived in the US for the past two years.
The best way to go about finding a cosigner is to turn to friends and family. Your family is the best bet, since it will include adults with a more established financial history and it’s a good source of people wanting to help you out. A helpful friend is also a good option, though finding a friend who has the significantly better financial history typical of a cosigner may be difficult for international students.
Finding a cosigner is one of the most important things international students can do to help their loan search, so make sure to get started as soon as possible!
* Photo of proud parents kissing their kid courtesy of Shutterstock
It’s January, and international students are ringing in the New Year in the United States and in their home countries all over the world. As you look forward to what 2013 will offer, keep in mind that a New Year usually means a new semester starting up, too! And with that, it’s definitely time to think of how to get your student loans for the new semester!
If you are an international student, you will soon realize that federal loans through the U.S. government won’t be an option for many international students looking for student loans. There are, however, private student loans that international students are eligible for if they have a US cosigner (no cosigner loans are available only in select instances). This cosigner must be a US citizen or permanent resident with good credit who has resided in the US for the past two years.
Private student loans function very similarly to federal loans, with the added advantage that many private lenders open their services to international students as well as U.S. citizens. There are also rarely application deadlines (as opposed to the rigid deadlines found through the U.S. and state governments), and funds can be used to pay for those incidental educational expenses (your flight into the country, for example) which can sometimes be incurred at a higher rate by international students. Institutions granting loans to international students include both banks and specialized financial aid organizations. Make sure to look into these options early, as applying internationally may take some time.
Whether it’s continuing loans from your fall semester or seeking new ones to meet unforeseen expenses for the spring semester, now is the time to get on top of your student loans for 2013. Search for private student loans, and talk with your school’s financial aid advisor to straighten out your student loans for the new semester as soon as possible!
* New Year Money photo courtesy of Shutterstock
If you are an international student studying in the United States, you may be putting your last minute budget together before the new school year begins. When considering the many costs to fund your education – even if you don’t consider tuition – you’ll soon realize that the costs can add up fast. With travel, transportation, living expenses, room and board, and entertainment just to name a few, you may have realized that you need some extra help.
Private student loans for international students can help you make up the difference. With the new school year right around the corner, it’s not too late to apply and get approved within a few short weeks. International students should consider the funds they’ll need for the upcoming academic year, and apply for no more than the amount they need. Compare lenders to make sure you get the rates and terms that work best for you.
Remember, not all lenders work with international students – and to make matters more complicated, not all lenders that work with international students work with all schools. The international student loan comparison tool will allow you to find all the lenders that will work with you – at your school. Then, once you have a list of loans for international students, you can compare the terms and conditions, and choose the loan that’s right for you!
Studying in the United States can open many doors to international students, either at home or abroad. To make the most of your time overseas, be sure to plan ahead and think smart. If you take the time to budget ahead, you’ll be able to make the most of your education and open opportunities to your future career path.
Do you have questions about loans for international student? Contact our representatives for more information.