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Education loans abroad for international students

As an international student setting your sights on studying in the U.S. or Canada, one of the most significant hurdles you might face is understanding and securing an education loan for your studies abroad. The complex and unfamiliar process involves different financial systems, varied loan terms and currency exchange rates. Here’s some information to help you learn quickly.

Types of education loans abroad

For international students, there are primarily two types of education loans to consider, each with its own set of characteristics and requirements:

  • Private student loans: Private loans are offered by banks and financial institutions and are a common choice for international students. They often require a creditworthy cosigner, usually someone based in the country of study. The terms of these loans, including interest rates and repayment schedules, can vary significantly. They’re designed to cover a wide range of expenses, from tuition fees to living costs.
  • Institutional loans: Provided directly by educational institutions, institutional loans can offer more favorable terms and conditions tailored to the needs of students. However, their availability is often limited and may depend on the institution’s specific policies. Usually, international students cannot rely on institutional loans to finance their education.
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Interest rates explained

Understanding how student loan interest rates work is crucial for making an informed decision about your international student tuition loan:

  • Fixed-rate student loans: With a fixed interest rate, the rate remains constant throughout the life of the loan. This consistency offers predictability in your repayment amounts, making it easier to budget and plan your finances.
  • Variable rate loans: Variable interest rates can change over time based on market conditions. While they might offer lower rates initially, the uncertainty of fluctuating rates can impact your long-term financial planning and repayment amounts.

Learn more about the advantages and disadvantages of fixed and variable interest rates.

Dealing with currency exchange rates

Understanding and managing the impact of currency exchange rates is a critical aspect of education loans abroad.

The amount you borrow and will eventually repay can be significantly affected by fluctuations in currency exchange rates. For instance, if your home country’s currency depreciates against the U.S. or Canadian dollar, the amount you need to repay in your home currency will increase. This can have substantial implications on your budget and financial planning. Take into account these potential changes when planning your loan amount and repayment strategy. Make sure to keep an eye on currency trends and consult with a financial advisor to make informed decisions about borrowing and repaying your education loan. One option to consider is finding an education loan in the local currency where you intend to study, i.e. U.S. currency when studying at a U.S. school.

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Application process and eligibility for international education loan abroad

The journey to securing student loans for studying overseas involves several detailed steps, each crucial for a successful application:

  • Gather necessary documentation: These documents typically include your university admission letter, financial statements proving your ability to support yourself and personal identification documents. Additional documentation like visa approval and proof of residence might also be required for students planning to study in the U.S. or Canada.
  • Understand eligibility: Each loan has its own set of student loan eligibility criteria. For private loans, a common requirement is having a cosigner. A cosigner is someone who agrees to repay the loan if you’re unable to do so. This is often a requirement because international students usually don’t have an established credit history in the country of study. Additionally, some private loans might require collateral, which is an asset that can be used as security for the loan such as property, stocks or other valuable assets.
  • Complete the application: Accuracy is vital. Errors or omissions can lead to delays or even rejection of your loan application. Ensure all information is correct and up to date and double-check all entries before submission.

Why MPOWER?

MPOWER Financing stands out as a provider of education loans abroad and as a mission-driven fintech firm dedicated to breaking down the financial barriers that often impede access to higher education for students globally.

Comprehensive support tailored for international students

MPOWER’s commitment to international students extends beyond student loans. MPOWER offers scholarships and resources, such as guidance on health insurance. Also, everyone receiving an MPOWER Financing loan is automatically eligible for the Path2Success program, which includes a range of services – from free visa support and career guidance to financial services and discount offers. Free visa services include a free visa support letter and visa preparation course. Career services include internship and job search guidance for OPT and H-1B visa sponsored roles, a resume builder and a directory of F-1 eligible job roles for STEM and non-STEM degrees. Students are prequalified for a U.S. credit card and U.S. bank account and will receive access to financial perks, such as discounts on textbooks, air travel and SIM cards. 

This holistic approach ensures students have the necessary resources and information to navigate the complexities of studying abroad.

Tailored support and understanding

With a team that includes former international students, MPOWER brings a deep, personal understanding of the unique challenges students face pursuing education abroad. This insight is invaluable in providing tailored assistance throughout your educational journey, from securing loans to offering career support post-graduation.

Financial flexibility for diverse needs 

MPOWER’s international student loans are designed with flexibility in mind, catering to more than just tuition fees. In the U.S. funds can be used for international health insurance, textbooks, meal plans and housing. This adaptability is crucial in ensuring students have comprehensive financial support.

No-collateral, no-cosigner loans

What distinguishes MPOWER Financing from many private student loan lenders is its approach to loan decisions. Focusing on your future potential rather than past financial history, MPOWER offers an uncollateralized loan, meaning collateral is not required for loan approval. MPOWER doesn’t require cosigners either. This forward-thinking approach makes the loan application process more accessible and less burdensome for independently oriented students seeking financial aid.

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FAQs

What documents are typically required for an education loan application?

You’ll usually need to provide proof of admission to a foreign university, financial statements, personal identification documents and possibly visa approval. You may also need a cosigner’s financial and identification documents for loans requiring a cosigner.

What’s a cosigner, and why might I need one for a private loan?

A cosigner is someone who agrees to repay your loan if you’re unable to do so. They’re often required for private loans because international students typically lack a credit history in the country where they plan to study. However, there are private lenders like MPOWER that don’t require students to have a cosigner or credit history.

How do currency exchange rates affect my education loan?

Currency exchange rates can impact the amount you receive in your loan disbursement and the amount you repay. If your home currency’s value falls against the currency in which your loan is denominated (like USD or CAD), your repayments could become more expensive in terms of your home currency. It’s important to consider these potential fluctuations when planning your finances. A loan issued in U.S. or Canadian dollars and disbursed directly to your university avoids currency fluctuation.

Can education loans cover living expenses in addition to tuition?

Yes, some education loans for international students are designed to cover tuition fees and living expenses, including accommodation, books and other day-to-day costs.

What should I do if I can’t find a cosigner for my loan?

If you’re unable to find a cosigner, look for lenders, like MPOWER Financing, that offer loans to international students without this requirement. These loans are designed based on your future earning prospects, not on cosigner or collateral requirements.

*Rates as low as 9.99% (10.89% APR) available only for the fall 2025 semester and you must submit your application by December 31, 2024. This interest rate and APR includes a 0.25% discount for automatic recurring payments and a 0.75% discount from our limited-time early planner promotion.

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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