- Student loans cover tuition fees and cost of living
- A cosigner is required for most student loans in the USA
- Repayment may begin immediately or after graduation
Studying abroad is an expensive affair. Look for a scholarship to cover the costs and if you can’t find one go for an international student loan. The question is how to apply for it? Here is everything you must know about applying for an international student loan.
Why Do You Need A Student Loan
Most colleges and universities welcome international students but often charge a higher tuition fee. Apart from this, international students also have to account for accommodation costs, travel expenses and day to day cost of living.
Thus, the first step most students take when applying for admission to foreign colleges is to look for a scholarship. This can help pay for part of the tuition fees or in some cases even living expenses.
However, not everyone can get a scholarship and even if they do, this may not be enough to meet all their costs. Hence, the next step is to apply for an overseas student loan.
What Is Covered By Student Loans
Student loans are available to students traveling to any country around the world. The total amount of a loan varies from student to student depending on the total cost of their education minus any financial aid already received.
This includes tuition fees, accommodation costs, health insurance, travel expenses, books and stationery, etc. Most student loans do not require a collateral payment.
Finding the Best Overseas Student Loan
Internationalstudentloan.com makes it easy for international students in the USA to find the best loan for them. Once the student enters the name of the school he or she is applying to and the location of the school, a list of all the available loans are displayed.
Along with the name of the loan, all the salient features are also listed. This helps students compare loans at a glance. The student may then apply for the loan best suited to him or her.
Most international student loans require a cosigner. A cosigner is a person who agrees to pay the debt back to the loaning agency if the student defaults on their payments.
In most cases, the cosigner must be a US citizen or a permanent resident in the USA for at least 2 years. He or she must have a good credit rating. Most students ask friends and family members in the USA to act as their cosigners. The cosigner’s creditworthiness can influence the interest rate of the loan.
A few loans are available to international students without a cosigner but these loans typically have a much higher interest rate.
International Student Loan Repayment
The loan repayment terms are often a deciding factor when choosing the best loan to apply for. The repayment period can range from between 10 to 25 years.
A longer period may feel more comfortable but it is important to recognize that a longer repayment period translates to a higher interest payment.
Since most international students are not allowed to work in the USA while they are on a student visa, the repayment period for loans may begin after they graduate. Some of the standard repayment options available to students are:
- Full Deferral: In this case, full-time students can defer the start of their repayment period to 6 months after they graduate. This is typically understood as a period of 4 years from the time of getting the loan.
- Interest Only: Full-time students can choose to pay back only the interest component of the loan for up to the 4 years that they are in school. Repayment of the principal amount can be deferred to 4 days after graduation or to the time when students shift from a full-time course to a part-time course.
- Immediate Repayment: In such cases, the student begins paying back the principal and interest as soon as the loan has been dispersed.
How To Apply For An International Student Loan
At Internationalstudentloan.com, students can apply for a loan online. Once you have compared the loans available and decided on the best loan for you, the next step is to complete the online application.
Once a loan application has been submitted, students are typically notified about their eligibility for the same within a few hours. In some cases, pre-qualification can take up to 48 hours.
The next step for students is to submit the documents needed to finalize the loans. This will include their admission letters, proof of ability to repay the loan and a document known as the Truth in Lending Disclosure.
On approval, a Self-Certification Form and Master Promissory Note must be signed by the student and the cosigner.
The last step before the dispersal of funds is for the lending agency to check that the student is enrolled in the relevant institution and that the loan amount does not exceed the total cost of education.