Understanding the Student Loan Application Process for International Students

Understanding the international student loan application process is crucial in preparing to study in the U.S. or Canada, as it can be quite different from what you might be used to in your home country. Learning about the key steps in financing your education through a loan will help ensure you’re not caught off guard, and you can focus on your studies instead of worrying about finances.

Overcoming challenges with the international student loan application process

Obtaining financial aid for international students can be challenging due to the:

Complexity of financial systems: The financial systems and loan processes in the U.S. and Canada can be complex and different from those in your home country.
Difficulty finding a suitable cosigner: For many international students, finding a cosigner in the U.S. or Canada who meets the lender’s requirements can be a significant hurdle.
Learning curve in understanding loan terms: Grasping the nuances of loan terms, especially the differences between fixed-rate student loans and variable interest rates, can be challenging but is crucial for making an informed decision.

Working through the student loan application process as an international student can be daunting, but with the right information and approach, it’s a manageable endeavor.

Need help in choosing the right loan?

Read MPOWER blog with seven tips to compare no-collateral loans.

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Researching your student loan options

The first step of the student loan application process is to explore and understand the various international student loan options available to you. For international students studying overseas, some loan options are unavailable. Here are some tips for private lender loans, the most common option for student loans – a private loan.

Compare lenders: Look at different banks, credit unions and online lenders. Focus on factors like interest rates, which can be fixed or variable, cosigner and collateral requirements, repayment terms and any additional benefits or support services.

Understand loan terms: It’s important to know the implications of fixed versus variable interest rates, how they can affect your repayments and the overall cost of the student loan.

Seek advice: Use resources like your university’s financial aid office or online forums for insights and advice on choosing the best loan for your situation. Most lenders will be more than happy to assist potential students with finding the right student loan option.

Preparing your international student loan application

Once you’ve identified potential lenders, it’s time to get your application ready. Here’s what you need to do:

Gather documentation: Required paperwork usually includes your admission letter, passport, visa, proof of residence and financial documents.

Check credit and collateral requirements: Many private lenders require a credit check. As an international student, you might need a cosigner with a good credit history in the U.S. or Canada. In some cases, collateral may be required to secure a loan. Some student loan providers, like MPOWER Financing, do not require a cosigner and offer no-collateral loans.

Complete the application: Fill out the loan application form carefully and accurately to avoid any delays in processing. The more accurate and complete the information you can provide, the better your chances of being approved.

Understanding your student loan offer, disbursement and repayment plan

After your application is reviewed, you’ll receive a loan offer.

Review the offer: Look closely at the loan amount, interest rate, repayment terms and any associated fees.

Ask questions: If anything is unclear, reach out to the lender for more information.

Accept the loan: If you’re comfortable with the terms, accept the loan offer by signing the contract.

Once your school has certified the loan amount and date period, the funds from your loan are typically sent directly to your educational institution. For U.S. schools, any excess funds can be used for student expenses beyond tuition such as textbooks, meal plans, housing and others.

One of the most important parts of your student loan offer is your repayment terms. The repayment plan covers all the terms and conditions you need to know about repaying the loan, including:

Repayment schedule: Know when your repayments start. Some international student loans require payments while you’re in school, while others offer a grace period.

Budgeting: Plan your finances to ensure you can comfortably meet your repayment obligations.

Flexibility: Be aware of options like deferment or forbearance in case you face financial difficulties.

MPOWER Financing student loan application process

MPOWER Financing streamlines the student loan application process for international students, making it quick and hassle-free.

Diverse loan offerings: MPOWER offers fixed-rate private student loans ranging from US$2,001 to US$100,000, ensuring a wide range of financial needs are covered. These loans come with competitive interest rates and you can enjoy a 0.25% interest rate reduction by opting for automatic payments. Even if you have existing loans from other lenders, MPOWER’s options are still available to you.

Ease of loan access: MPOWER loans don’t require a cosigner or collateral, focusing instead on your future potential. There’s also no penalty for early repayment.

Quick online loan procedure: The entire MPOWER student loan application process is efficient, with a quick 30-second eligibility check, rapid approval and smooth fund disbursement directly to your school.

Continuous support and assistance: MPOWER’s commitment extends beyond providing loans to also include free visa services and career guidance through its Path2Success program. Visa support services include providing a free visa support letter and a free 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.

Additional educational support services: MPOWER also offers international scholarships ranging from Women in STEM to MBA scholarships, providing US$100,000 in grants per year.

With MPOWER Financing, the student loan application process is not just about getting international financial aid; it’s about embarking on a supportive and empowering educational journey to help you succeed. The streamlined process and continuous support make MPOWER an ideal partner for international students seeking to study in the U.S. or Canada.

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FAQs

What documents do I need to apply for a student loan as an international student?

Typically, you’ll need your admission letter, passport, student visa, proof of residence and financial documents. It’s also wise to have any documentation related to your cosigner if your lender requires one.

How do I choose between a fixed and a variable interest rate?

Fixed rates remain the same throughout the loan term, offering predictability in your repayments. Variable rates can fluctuate based on market conditions, potentially lowering your initial payments but with the risk of increasing later. Consider your financial stability and how comfortable you are with the potential rate changes.

What should I do if I don’t have a cosigner?

Look for lenders offering loans to international students without a cosigner. MPOWER is a U.S. private lender that provides funding based on your future potential, not your cosigner or collateral.

Can I apply for a student loan before getting my visa?

Yes, you can start the student loan application process before your visa is finalized. However, the loan approval and disbursement might depend on obtaining your student visa.

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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Student loan application process for international students