What Should International Students Consider When Applying for a Student Loan?

Studying abroad may be one of the most beneficial experiences for a college student. Many people who decided to attend university in a foreign country agree that it was one of the best decisions of their lives. Besides being a priceless opportunity to pursue an exciting educational program in a completely different environment, it’s also a great way to improve your language skills, meet new people, and learn more about other cultures.

However, unless you apply to one of the tuition-free universities, figuring out how to finance your studies might become one of the biggest challenges you’ll need to face as an international student. Between tuition and the cost of living as well as the necessities, working toward your degree in the United States as an Australian student can cost $30,000 or more just for one year. This may be why loans for students are one of the most common ways to pay for school in the United States. This article will guide you through everything you should learn about the process.

Read on for the roundup of things you need to know about international student loans and how to apply for them.

What Are International Student Loans?

International student loans serve as financial aid for both international students studying in the USA and US citizens studying abroad. They can cover many different costs associated with pursuing education away from your home country, including tuition, room and board, books, travel, health insurance, and various living expenses. While US citizens and eligible non-citizens can apply for federal loans, these are unfortunately unavailable to international students.

Hence, in most cases, international students, including Australian citizens who want to study in the US, need to apply for a private international student loan with a qualified cosigner. In a nutshell, a cosigner is a person who guarantees that if the borrower can’t pay back the loan, they will be legally responsible for paying back the debt instead. Finding a trustworthy cosigner might be a tricky process for an international student. Most people find help in close or extended family members and trustworthy friends.

However, keep in mind that there’s no requirement saying that the consigner needs to be your relative - it can be anyone who meets the general requirements and is willing to cosign your loan. All they need to provide is a social security number, address and phone number, references, and employment information. If you’re unable to find a cosigner, you can check if you’re eligible for a no-cosigner loan.

How to Budget for an International Student Loan?

As an international student, it's crucial that you gather as much information as possible about the total cost of participation in the program of your choice. That’s because people who study through a university-sponsored program or an institution based in the US are often provided with a detailed breakdown of all the costs. However, if you decide to study through an independent program, collecting this information from proper sources might be your responsibility.

For instance, you may be presented with an outline of the total cost of your program, including the costs of transportation, but it can also be left out. In such a case, it will be up to you to do the research, ask questions, and figure out how much money you might have to pay for transportation throughout your international studies. It’s also wise to come up with a realistic estimate of how much money you need to save to fund miscellaneous expenses such as travel or leisure at your destination.

How to Apply for an International Student Loan

When applying for an international student loan, you should know precisely how much money you need to borrow. In order to figure out the correct amount, make sure to carefully read the financial aid award letter that came from the college you applied to. Then, you need to find a loan that meets your financial needs.

You can use online loan comparison tools that comply with the kind of loan you’re looking for. It might also be helpful to browse different forums or social media groups dedicated to studying abroad to learn more about other people’s experiences. Start exploring your options as early as possible, so that you’ll have plenty of time to find the most suitable option and make the right decision.

After you decide on a loan, you’ll have to submit your application to the lender. Once you do that, your lender will be responsible for completing their part of the application process. After submission, you should receive documents, including instructions related to your loan application. Follow them carefully and make sure that both you and your cosigner sign and return the documents on time. Once all your documents have been approved, the money will be transferred to your university, and you will receive your loan proceeds from them.

What to Look for in an International Loan?

The process of looking for an international loan that suits all your needs and preferences can be compared to shopping - just like when visiting the stores, there are a few things you should keep in mind before choosing a particular loan.

Try to start by comparing multiple private loan offers. This way, you’ll be able to get a better idea of what’s out there and have a high chance of finding the lowest interest rate you qualify for. Make sure to check if the lender is willing to postpone payments in case you ever can’t make the deadline.

Find out if there are any late fees and see whether it’s easy to contact the lender by email, phone, or live chat - this might be crucial if you encounter any difficulties later on, especially when you’re abroad. Furthermore, you should always opt for a loan with a fixed interest rate. This way, you’ll be able to rest assured that it won’t increase over time - it’s a much safer option than a loan with a variable interest rate. Don’t hesitate to ask questions and seek more details when in doubt.

Final Word

Studying abroad can be an amazing, eye-opening experience. However, it’s an opportunity that comes at a price, which can often add up to quite a hefty amount. Luckily for students, there are different ways to finance this adventure, including international student loans.

To successfully apply for international student loans, it’s essential to dedicate plenty of time and effort to the pre-planning stage. Budgeting your costs, finding a qualified cosigner, and being aware of what you should look for when choosing a loaner will help ensure that you’ll have everything in order. You, too, can pursue your dreams by following the footsteps of around one million international students who come to the US for education each year. Good luck!

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Posted - 04/26/2022