Choosing a private education loan company for Pakistani students

For Pakistani students, private education loans are one of the best ways to finance a postgraduate degree in the U.S. or Canada. Government loan programmes typically aren’t available to Pakistani students, and the financial aid and scholarships from universities in North America can be limited and highly competitive. Fortunately, plenty of private education loan lenders are available to Pakistani students, but it’s important to choose the right lender.

1. Total number of Pakistani students in the U.S. (2023-2024):In the 2023–2024 academic year, over 11,000 Pakistani students were enrolled in the United States – a record high and a steady increase from the previous year. This placed Pakistan 16th globally for student enrolment in the US.Source: Tribune Pakistan
2. Year-over-year growth – Pakistani students in the U.S. and Canada (2022-2023 to 2023-2024):Leading study destinations are witnessing significant increases in Pakistani student enrolments, with particularly high demand for postgraduate studies. In the United States, there were 10,165 Pakistani students in 2022-2023, marking a 16% increase from the previous year, while in Canada, the number surged to 4,750 students in 2023, reflecting a 101% increase from the previous year.Source: ICEF Monitor
3. The proportion of Pakistani students among all international students:The total number of international students in the United States for the 2023-2024 academic year was 1,126,690. Pakistani students accounted for 1.0% of this total, with 10,988 Pakistani students enrolled.Source: IEE Open Doors 2024

Private education loan companies in the U.S. or Canada are typically banks, credit unions or other businesses dedicated to helping students afford the high cost of education. These companies fall into two broad categories: lenders that require a cosigner and lenders that don’t.

Education loans with a cosigner

The typical education loan company views Pakistani students as more of a risk than domestic students. Pakistani students tend to have no credit history in the country and no property or valuables to offer as collateral in the U.S. or Canada. As students, they have little income and their future earning potential is unknown. To offset this risk, most education loan companies require Pakistani students to have a cosigner. A cosigner must be a citizen or permanent resident of the U.S. or Canada, have a strong credit score and have enough income to make payments on a loan if the student cannot. Some students are able to ask relatives, family friends, mentors or other sponsors to cosign a loan. However, most Pakistani students don’t have those kinds of contacts in North America, which makes a cosigner loan impossible.

No-cosigner education loans

Fortunately, it’s possible to get an international education loan without collateral or a cosigner. No-cosigner and no-collateral loans for study abroad are typically offered by companies dedicated to helping Pakistani students overcome the challenges of studying abroad. Instead of basing a loan decision on the credit history and current wealth of a student or a cosigner, these lenders look at the student’s potential. They may factor in the student’s previous academic record, their field of study, the reputation of their university and their future earning potential.

Follow these steps to identify and choose the right education loan company to help finance your degree as a Pakistani student.

• Gather a list of education lenders: You can find many education loan companies online. You may also get suggestions from the admissions department of the university where you want to study. One of the best ways to find an education loan company is to consult your network. Ask friends, family and social media contacts about the lender they used when financing their degrees. Be sure to check with the government and lenders in Pakistan as well, as some Pakistani banks offer education loans for studying abroad.
• Read the reviews: Once you have a broad list, narrow it down by reading reviews for each company. Look for customer reviews that reveal how easy a lender is to work with, how well they communicate and what kind of student loans they offer. Try to find reviews specifically from other Pakistani students who have used these lenders.
• Look for benefits beyond funding: Some lenders are better suited to working with Pakistani students. These companies may offer benefits like visa support or career services that can help Pakistani students through the complicated process of immigrating to the U.S. or Canada and eventually finding an internship or a job there. Some may even offer networking opportunities with other Pakistani professionals in North America.

Once you’ve narrowed down your search to a few education loan companies, here’s what to look for as you compare education student loans.

• Check eligibility requirements: In addition to a cosigner or collateral, an education loan company will have additional requirements. This may include your academic standing, your field of study and your future earning potential. Some lenders may have specific requirements or considerations for Pakistani students.
• Compare student loan interest rates: The amount of interest you pay determines the total cost of your loan. The higher the interest rate, the longer it will take to repay your loan and the more you’ll have to pay. Private education loan rates vary quite a bit, so it’s important to find the best rate you can. Also compare these rates with those offered by Pakistani banks to ensure you’re getting the most cost-effective loan.
• Review repayment terms: The terms of the loan include the length of time you have to repay it. Ten years is standard, but some companies offer shorter or longer terms. One big consideration is when your payments start: some lenders offer a grace period, allowing you to delay payment for some time after graduation. Others require payment while you’re in school, which can help to pay off your loan faster and lower the total cost.
• Understand the total cost: Before committing to an education loan company, calculate the total cost of the loan, including interest and any fees like application fees, origination fees, foreign exchange fees and prepayment penalties. The annual percentage rate (APR) encompasses the interest plus any fees for the loan each year. The APR allows you to make an apples-to-apples comparison of different loan products by annualising the full cost of the loan based on the interest and fees charged. For Pakistani students, it’s important to consider currency conversion costs when calculating the total cost of repayment.

MPOWER Financing is a leading education loan company dedicated to helping global citizens, including Pakistani students, reach their academic and financial dreams. MPOWER offers no-cosigner, no-collateral loans to international students studying in the U.S. and Canada, as well as loans for DACA students and refugees/asylees.

When you choose MPOWER, you can count on:

• Tailored loan options: MPOWER offers fixed-rate student loans ranging from US$2,001 (PKR 560,000) to US$100,000 (PKR 28,000,000) with competitive interest rates that are inflation protected.
• Automatic payment discounts: Pakistani students can reduce their interest rate by 0.25% when making automatic payments.
• Flexible financing: MPOWER loans are available even when students have loans from other sources.
• Fast processes: MPOWER’s fully digital process makes it fast and easy to apply. MPOWER provides a 30-second eligibility check, quick conditional loan offers and seamless fund disbursement.
• Benefits beyond funding: In addition to loan financing, MPOWER offers visa services, career support, international scholarships and more.