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Options for student loans: What international students should know

Finding the right student loan to fund your study abroad is a big step. This article aims to demystify different international student loan options and help you make informed decisions.

Exploring options for student loans

Here are three types of loans you’ll need to know about:

Private student loans

Private student loans are the most popular student loan option for students studying overseas. They offer flexible loan amounts, sometimes covering the total cost of education, including living expenses. However, they may have other requirements such as collateral, a U.S. cosigner or more. Fortunately, there are private lenders who offer no-cosigner, no-collateral loans, that assess creditworthiness based on academic background and future earning potential, which is beneficial for students without a significant credit history.U.S. federal student loans are not an option for international students because these loans require U.S. citizenship.

Home country loans

Some students may find favorable options for student loans in their home countries. These loans might come from lenders with local names and terms more familiar to the students. However, they’re subject to currency exchange rate fluctuations and may have limited availability. These loans can be a good option if they offer lower variable interest rates though they may come with market uncertainty and not always align with the costs and needs of studying abroad.

Institution-sponsored loans

Certain universities offer their own loan programs specifically for their international students. While these can provide tailored support, they’re not universally available and might not cover the full cost of education. Institution-sponsored loans can be helpful but often need to be combined with other financial resources to fully cover educational expenses.

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Understanding options for international student loans

Choosing the right student loans for studying overseas requires some careful thinking. Here are some common considerations and tips:

  • Loan terms: Analyze the terms and conditions of different loans. Interest rates, repayment schedules and loan fees can vary significantly between lenders. Understanding how to apply for student loans and all the associated fine print is crucial to avoid unexpected obligations or costs in the future.
  • Credit history: Be aware that because many international students may not have a credit history in the country where they’re studying, they’re not able to meet a common requirement for private loans. Some lenders, however, might offer loans not fully dependent on a credit history but at higher interest rates or with other conditions.
  • Legal visa requirements: Ensure a loan aligns with your visa requirements. For instance, some visas may restrict how much you can borrow or the type of funding you can receive.
  • Loan accessibility and approval chances: Evaluate the lender’s criteria, such as academic performance, potential future income or the field of study.
  • Currency exchange rates and repayment: Know that for international student tuition loans taken in a home country or paid back in a different currency, fluctuating exchange rates can significantly affect the cost of the loan. Consider potential currency risks and how they might impact repayment amounts when researching options for student loans.
  • Fixed and variable interest rates: Understand the difference between a predictable fixed-rate student loan and a variable interest rate loan to help you predict how your loan payment could change over the loan period and affect the total cost of the loan.
  • The total cost of international education: Plan for living expenses, travel, insurance and other costs associated with studying abroad. Ensuring the loan covers these expenses without leading to over-borrowing is a delicate balance.

Maximize scholarship opportunities alongside student loans

Combining international scholarships with student loans is a smart strategy for international students looking to finance their education abroad. Scholarships can dramatically reduce the total amount you need to borrow, easing your financial load.

Here’s how you can strategically use scholarships and loans to your advantage:

  • Identify suitable scholarships: Begin your search by looking for scholarships that match your academic interests, intended country of study and background. There are numerous scholarships available specifically for international students across various fields.
  • Application strategy: Customize your scholarship applications to showcase your strengths and achievements, ensuring you clearly meet the scholarship criteria. Pay close attention to the application instructions and deadlines.
  • Scholarship-loan balance: After being awarded scholarship funds, calculate the remaining amount you’ll need to cover through loans. This helps in borrowing only what is necessary, potentially saving you a significant amount in future interest payments.
  • Maintain eligibility: Keep up with the requirements to retain both your scholarships and student loans. This might include maintaining a certain GPA, engaging in community services or meeting other criteria set by the scholarship or loan providers.
  • Financial planning: Integrate scholarships and loans into a comprehensive financial strategy for your studies abroad. Plan your budget considering tuition, living costs, travel and other study-related expenses. Scholarships can cover specific costs like books and research, allowing you to allocate your loan funds more judiciously.
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Why choose MPOWER Financing?

MPOWER Financing provides student loans to international students studying abroad in the U.S. or Canada. Founded by international students, MPOWER gives students the best options for student loans and offers additional benefits beyond funding with exclusive career, immigration and financial  services to support students before, during and after graduation.

Here’s how MPOWER Financing can help:

Flexible financial solutions: MPOWER offers a range of international student loans, starting from US$2,001 up to US$100,000. Students can earn a 0.25% interest rate reduction with automatic payments, and applicants with existing loans from other lenders are welcome to apply for an MPOWER student loan.

No need for cosigners or collateral: MPOWER firmly believes in the future potential of students and  offers independent student loans without cosigners or collateral. The goal is to simplify the process of financing education. Furthermore, borrowers can establish a credit history by making on-time loan payments, without facing any prepayment penalties.

Effortless and expedient process: The MPOWER student loan process is fully digital, ensuring accessibility from anywhere in the world. From quick approvals to seamless disbursement, MPOWER provides comprehensive support throughout the process. Applicants can determine their student loan eligibility and check their eligibility in as little as 30 seconds.

International scholarships and additional services: MPOWER extends support to students through various scholarships and a range of services tailored to the unique needs of graduate students. 

MPOWER Scholarships

International student scholarships are designed with your needs in mind.

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FAQs

What factors should international students consider when researching options for student loans?

Interest rates, repayment terms, eligibility requirements and additional support services.

Can international students find student loans that don’t require a cosigner?

Yes, some private lenders offer cosigner-free loans, these might come with different terms and conditions, so as with all loans it’s important to research your loan.

Are there international student loans that cover living expenses in addition to tuition?

Certain private student loans can cover both tuition and living expenses, but it’s essential to confirm this with the student loan lender.

What are the typical repayment terms for student loans available to international students?

Repayment terms vary by lender and can range from immediate repayment to deferred plans that start after graduation.

*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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