Understanding

study abroad

education loans

When it comes to education loans for international students, there are two main types: federal loans and private loans.

Federal loans

Federal student loans are financed through U.S. government programs. They often have lower interest rates and flexible repayment options. Here’s the catch: They’re usually unavailable to international students, though, there are exceptions. For instance, children from families with T non-immigrant status are eligible for federal loans. But for most international students, federal loans may not be an option.

Private loans

Private lenders like banks, credit unions and fintech companies provide private student loans. These loans can be available to international students and often require a U.S. citizen or permanent resident to cosign the loan. Some lenders, like MPOWER Financing, offer international students no-collateral loans and no-cosigner student loans.

Depending on the lender, private loans can cover up to 100% of the cost of education, including tuition, books, supplies, housing and more. This makes them a good option if you’re having trouble securing other forms of financial aid.

The interest rates, fees and repayment terms can vary widely among private lenders. Some private lenders offer loans specifically tailored for international students. These loans can be a great way to pay for college, but it’s crucial to do your homework before signing on the dotted line. For example, many lenders offer variable rate international student loans, but fixed rate student loans tend to be safer for international students since they offer consistent, fixed repayment terms.

Remember, the terms of private loans can be complex. They can have high-interest rates and may require a cosigner or collateral. Also, make sure you understand the repayment terms and whether there are penalties for early repayment. Always read the fine print and consider getting advice from a financial advisor before signing any agreement for a study abroad education loan.

While private loans can be a viable option for international students, it’s important to be cautious. Interest rates can be high, and some lenders require a cosigner or collateral, which can burden your family with your debt. It’s also crucial to understand the cost of student loans and whether there are penalties for early repayment. Always read the fine print and consider consulting with a financial advisor before signing a loan agreement.