For international students like you, the dream of studying in the U.S. or Canada comes with navigating the complexities of education loan financing. This journey is filled with terms like interest rates, cosigners and currency conversion. Understanding the basics of loan financing will help you make informed decisions. So, let’s dive in to what you need to know when it comes to educational loans.
Exploring the landscape of international education loan financing
Let’s first look at different types of student loans and interest rates.
As an international student, you’re more likely to explore private student loans offered by banks, credit unions and other financial institutions. These loans can vary greatly in terms of interest rates, repayment options and eligibility requirements.
Understanding the type of interest rate on your loan is pivotal as it directly impacts your repayment plan.
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How do you apply for education loan financing?
Applying for international education loan financing moves you one step closer to your goal of studying abroad. Getting a student loan is not just about proving your eligibility but also about strategically presenting your case to potential lenders. Here’s what you’ll need to do:
Why currency conversion matters for education loan financing
Currency conversion is often one aspect of educational loans that international students overlook. It’s a factor that can influence not just the amount you receive or repay but also your overall financial planning for your time abroad. Here’s what you need to keep in mind:
Currency conversion rates: The interplay between different currencies can significantly affect the financial dynamics of your international education loan, resulting in 2-3% additional cost. As you borrow in one currency and repay in another, the fluctuating exchange rates can either work in your favor or against it. For example, if your student loan is in U.S. dollars and you’re converting from another currency that’s losing value against the U.S. dollar, it will be harder to repay the loan. Fluctuations impact not just the loan amount but also your repayment strategy, making it essential to stay informed about current and projected exchange rates.
Strategies for managing currency risk: Given the unpredictable nature of currency markets, you might look for financial products designed to protect against unfavorable shifts in exchange rates, like funding in the currency where you intend to study, i.e. the U.S. dollar when studying in the U.S.
MPOWER for education loan financing
MPOWER Financing is dedicated to easing the financial burden for international students planning to study abroad.
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FAQs
You’ll need to gather a comprehensive set of documents, including your admission letter, financial statements, proof of identity and your cosigner’s financial information if needed. Check with your specific lender for a detailed list of required documentation.
Choosing between fixed and variable interest rates depends on your financial stability and risk tolerance. Fixed rates provide predictability in your monthly payments, making budgeting easier. Variable rates may start lower but can fluctuate, potentially increasing your payments over time. Consider your long-term financial plan and market trends before deciding.
Currency conversion rates can significantly impact the amount you borrow and repay, especially if you’re earning in a different currency post-graduation. Fluctuations in these rates can affect your loan’s cost and your repayment amount, making it essential to factor in potential changes and manage currency risk.
Yes, many education loans for international students are designed to cover a range of expenses, including tuition, housing, books and other living costs. It’s important to review the terms of your specific loan to understand what expenses are eligible for coverage. If you’re interested in what an MPOWER loan can cover, make sure to check out our support page.
If finding a cosigner is challenging, look for lenders, like MPOWER Financing, that offer loans without a cosigner requirement. These loans may have different terms and can provide a valuable option for financing your studies abroad.
DISCLAIMER – Subject to credit approval, loans are made by Bank of Lake Mills or MPOWER Financing, PBC. Bank of Lake Mills does not have an ownership interest in MPOWER Financing. Neither MPOWER Financing nor Bank of Lake Mills is affiliated with the school you attended or are attending. Bank of Lake Mills is Member FDIC. None of the information contained in this website constitutes a recommendation, solicitation or offer by MPOWER Financing or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.
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