International student loans can help you achieve your goal of pursuing a degree abroad. After exhausting other financing options, student loans are a great option to fill funding gaps.
However, unlike scholarships, you’ll have to repay the money you get from student loans. Before applying for student loans, therefore, you must be well-informed on how they operate.
Let’s explore 8 of the most important questions you must ask before applying for international student loans:
#1 Do I Need a Cosigner to Apply for a Student Loan?
Most student loan providers require international students to have cosigners to be eligible. A cosigner is a creditworthy adult who signs an agreement to share the responsibility of repaying your student loan. A cosigner is jointly responsible for repaying the loan until it’s fully paid or they’re released by the lender.
If you’re applying for student loans from U.S lenders, the cosigner must be either a U.S citizen or resident. For most international students, a cosigner is usually a relative or a family friend. Choose your cosigner wisely – they should be someone you trust.
To be eligible for student loans from 8B Education Investments, you don’t need to have a cosigner. However, having a cosigner will enable you to access higher loan amounts and might also reduce the interest rates on your loan.
#2 What Is the Student Loan Interest Rate?
When applying for any type of loan, you must always ask about the interest rates. The interest rate is the amount the lender charges a borrower, which is usually a percentage of the principal loan amount. Interest rates are typically expressed as an annual percentage of the loan outstanding.
Bear in mind that international student loans come with higher interest rates compared to the rates for domestic students. It’s important to compare the rates offered by different lenders to make the most prudent financial decision.
Don’t forget to check whether the rates given are variable or fixed.
- Fixed rates: You’ll pay a fixed monthly amount for the duration of your loan.
- Variable rates: The amount you pay monthly will change depending on market rates until the loan is paid off.
Between fixed and variable interest rates, which one is better?
Well, that depends on personal preference.
Fixed loan rates are usually higher than the lowest advertised variable rates. However, having a fixed amount to pay each month enables better planning. When you start repaying your student loan, you’ll be sure exactly how much you’re required to pay per month and in total.
Variable rates usually go up and down as they’re tied to market conditions. While you may start off with lower payments than if you have a fixed rate, there’s a possibility that your interest rate — and monthly payment — could increase with time.
#3 What Can Student Loans Be Used For?
International student loans can be used to cover various expenses associated with your study abroad. Here are some of the main costs an international student loan can be used for:
- Tuition fees
- Books and educational supplies
- Laboratory fees
- Student accommodation
- International student health insurance
- Transportation (including airfare)
- Other school-related expenses (such as food, personal expenses, and communication)
#4 When Am I Required to Make Loan Repayments?
Before you sign the loan documents, you must also be fully aware about when you’re required to start repaying the loan. Are you supposed to make any payments while still in school? How long is the grace period after graduation? Having the answers to these questions will help you plan ahead.
If your loan indicates immediate loan repayments, you’ll be required to start making repayments as soon as the first month after you receive the funds. You might also have to make interest-only or partial interest payments on your loan while in school.
Full deferment allows you to make payments only after your graduation and the end of the grace period provided. However, the loan will continue to accrue interest while you’re in school.
#5 How Do I Apply for an International Student Loan?
It’s also important to understand the loan application process before you start. Applying for international student loans can be a simple process, especially with 8B Education Investments.
Start by comparing loans from different lenders to choose the best option for your needs. If you’re eligible for a loan from 8B, you’ll be directed to upload the necessary documents such as:
- Photo ID
- Academic merit score
- Financial statements
Once your documents are verified, you’ll be asked to sign for the loan before funds are disbursed to your school.
