If you’re planning to pursue your degree abroad, you might be wondering about the benefits of international student loans.
The cost of tuition fees in most colleges in developed countries such as the United States, United Kingdom, and Canada can be very high and can pose a financial challenge to international students.
On average, international students in the U.S can expect to pay $20,000 to $50,000 per year in tuition fees alone. To meet the high cost of tuition, students can access financial assistance through grants, scholarships, or student loans.
Unfortunately, not everyone can qualify for scholarships and grants – they are extremely competitive and not everyone will be eligible. Even if you qualify, the grants or scholarships may not be enough to cover all tuition fees.
International student loans are a great option to cover funding gaps for African students. The main purpose of international student loans is to cover tuition and other educational costs, but it can also be used to cover living expenses associated with your studies abroad.
Taking an international student loan comes with its advantages and disadvantages. In this guide, let’s explore the top 5 benefits of international student loans.
#1- Easy Application Process
One of the benefits of international student loans is that the application process is a relatively uncomplicated process compared to other loan types. Most lenders offer an online application form, which is a convenient way to apply quickly.
With the online application form, you can complete and submit your application without leaving the comfort of your home. Moreover, most lenders respond to your application within a few days, saving you the hassle of waiting for an extended period.
To apply for a student loan, you need to provide some essential documents such as:
- Your passport
- Academic transcripts
- Admission letter
- Proof of enrollment
These documents help the lender assess your eligibility for the loan and determine the loan amount you qualify for.
#2- Affordable Interest Rates
While international student loans have higher interest loans that for domestic students, there are affordable in the long run.
Keep in mind that the quality of education loans varies among lenders, so it’s crucial to research and compare different lenders and their interest rates before selecting a loan.
While comparing interest rates for international student loans, remember that there are two types:
Fixed Interest Rates: With a fixed interest rate, you pay the same rate of interest throughout the loan duration. This option makes it easier to budget for your loan repayments.
Variable Interest Rates: Unlike fixed interest rates, variable interest rates can go up and down depending on factors out of your control. While variable interest rates typically start lower than fixed rates, you might end up paying less or more on your loan.
The interest rate is a vital factor to consider when applying for a loan. It can significantly impact the total amount you’ll pay back over the repayment period.
#3- Flexible Repayment Terms
Most international student loan providers offer flexible repayment terms that permit you to repay the loan in parts over a specified period of time.
Typically, the duration of the repayment period ranges from 5 to 10 years, but this may vary depending on the lender.
The benefit of this repayment terms is that it grants you sufficient time to repay the loan without feeling financially burdened. Additionally, some lenders offer deferment or forbearance options, which can provide you with more flexibility in the event of financial hardship.
Deferment options allow you to temporarily pause your loan payments, while forbearance options may enable you to reduce or postpone payments for a specified period of time.
#4- Access to Additional Resources
Many international student loans come with additional resources such as:
- Visa assistance
- Career mentorship
- Financial literacy classes
- Networking opportunities
Lenders frequently provide these resources to help students better navigate the loan process, and have success with their studies abroad.
Some lenders may also offer online resources, such as loan calculators, to help you understand the terms and conditions of your loan.
By taking advantage of these resources, you can make informed decisions about your loan and effectively manage your finances while pursuing your education.
It’s worth noting that not all lenders provide the same level of support. Therefore, it’s important to research and compare options before selecting a lender.
#5- Freeing Your Parents From Financial Burden
Taking out an education loan can relieve parents from financial burden of paying for your studies abroad. This provides a sense of independence and responsibility for the student, as well as the opportunity to build credit history abroad.
However, you might still need an eligible cosigner for your international student loan. Your cosigner is held jointly responsible for repaying your international student loan. If you’re unable to make payments on the loan, the co-signer may become responsible for the remaining balance. It may also affect their credit score.
However, if you’re able to make payments on time for a certain duration – the lender might provide an option to release the cosigner from your loan.
The Downsides of International Student Loans
However, there are some potential downsides to taking international student loans to finance your education abroad. Let’s take a look at them below:
You Have to Pay Back the Money
Unlike scholarships and grants from your university, you’ll have to pay back all the money you get from international student loans. Not only that – you’ll also be required to pay the interest accumulated over the life of your loan.
Other charges to consider include origination fees, early repayment fees, and penalties.
Some lenders may also require you to provide collateral to access international student loans. If you fail to repay, the lender will seize the asset.
Long-Term Financial Obligation
By opting for an international education loan, you are undertaking a significant financial commitment that stretches over an extended period.
It’s crucial to bear in mind that once you have taken out the loan, you’ll be obligated to make the payments on time, which can affect your financial flexibility.
If you wish to explore different opportunities or take a break from your studies, you may face challenges as the loan payments will still have to be factored into your budget.
As such, it’s crucial to carefully consider all your alternatives and assess the advantages and disadvantages before making a decision to take out a loan. This way, you can ensure that you are well-prepared and able to meet your financial obligations without sacrificing your future plans.
In Conclusion
International student loans provide an opportunity for students to fund their education and pursue their dreams of studying abroad.
However, it’s important to consider all the benefits of international student loans (and the downsides) before committing to any loan agreement with a lender. A good place to start is our Loan Comparison Marketplace which allows you to search, sort and compare up to 20 different lenders before making a decision – CLICK HERE
