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How to perform an education loan comparison

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International students studying in the U.S. or Canada must often rely on private education loans to help cover the cost of their degrees. Since federal financial aid isn’t available to international students, private education loans are often the best option. However, there are many lenders providing a wide range of loan offers, so it’s important to carefully compare each product to be sure you get the best loan for you. This guide offers an overview of the types of loans available to international students, tips on how to compare them, and how to choose a lender.

Types of  student loans

To effectively perform an education loan comparison, you’ll want to understand the different kinds of private loans that may be offered to you.

  • Institution-sponsored loans: Some universities offer their own loan programs especially designed for international students. However, these loans are often not available to every student, and they may not cover the full cost of education.
  • Home country loans: You may find options for overseas education loans from lenders in your home country. These may be a good option if the interest rates are lower than loans in the U.S. or Canada. However, changes in financial markets and currency exchange rates can make it difficult to know exactly what your payments will be once you’ve graduated.  In addition, you need to allocate more money for foreign exchange fees which can add up over time.
  • Private loans: Banks or financial institutions provide private loans rather than a government or university. Most international students fund their education in part with private loans.

Generally, there are two types of private loans to factor into your education loan comparison.

  • Private loans with a cosigner: Because international students usually don’t have a credit history in the country where they’re studying, private lenders often require students to have collateral or a cosigner. Collateral is property or financial assets the lender could take if you can’t pay your loan. A cosigner is a U.S. or Canadian citizen or permanent resident who agrees to take responsibility for the loan if you can’t make payments. However many international students don’t have the financial resources to offer collateral, and they may not have friends or family in North America they can ask to be a cosigner, making it difficult to get a private loan.
  • Private loans without a cosigner: Some lenders are willing to offer loans to international students without requiring a cosigner or collateral. Rather than making their decisions based on your current finances, these lenders focus on your previous academic achievements and your future earning potential. They may look at factors like your course of study, your university’s reputation, and your projected income after graduation. For many international students, an international education loan without collateral or cosigner is the best way to overcome the challenges of paying for study abroad in the U.S. or Canada.
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Making an education loan comparison

Here are the most important things to remember when performing an education loan comparison.

  • Eligibility: The first thing to consider is whether you’re eligible for a loan, since requirements for loans vary widely between lenders. Some lend only to international students in certain fields or to students with a certain academic standing. Others may require a cosigner or collateral.
  • Student loan interest rates: The interest rate on a loan is one of the biggest factors in determining how much your payments will be and how long you’ll have to pay. Interest rates may be fixed, meaning the rate will never change, or they may be variable, meaning the amount of interest you pay may rise or fall from year to year along with changes in economic markets.
  • Repayment options: Some lenders will allow you to defer payments until you’ve graduated, or to make interest-only payments while you’re in school. Other education loan providers may allow you to make smaller payments immediately after you graduate and larger payments as your income grows. One thing to remember is that the longer you defer, the more interest you will have to pay. That’s why making payments while you’re in school can help to reduce the overall cost of the loan.
  • Additional fees: Many lenders include fees like application fees, origination fees, processing fees, or penalties for early prepayment. Look at and compare the annual percentage rates (APR) as part of your education loan comparison. The 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 annualizing the full cost of the loan based on the interest and fees charged.
  • Loan amount: Each student loan provider will have a minimum and maximum amount they’re willing to lend to you. Be sure these amounts make it possible for you to cover the full cost of your education.

How to choose a lender

In addition to financial considerations like private education loan rates, fees and repayment options, your education loan comparison should also take into account the quality and reputation of the lender. Not all lenders are equal – certain lenders have a stronger reputation than others, and some are better at serving the needs of international students.

Lender reputation 

Be sure to review the business reputation of any lender during your education loan comparison. Read online reviews from companies like TrustPilot for each lender’s customers to make sure the company is one you want to work with. Avoid any lender that receives a lot of complaints about lack of communication or flexibility.

Additional benefits 

Some lenders offer additional benefits that can be especially helpful for international students. These may include:

  • Informational resources. Applying to schools in the U.S. and Canada can be overwhelming for many international students. Some lenders offer helpful online resources that can help to demystify processes and provide helpful guidance as you navigate the application and immigration process.
  • International scholarships. Certain lenders go one step beyond loans and offer access to scholarships for certain kinds of students.
  • Visa support. This may include resources to better understand the information process and tools to prepare for your visa application.
  • Career services. Because they’re invested in your success after graduation, some lenders offer career services to help you find jobs and internships. These may include tools for searching jobs, building a resume and preparing for interviews.
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MPOWER Financing: No-cosigner loans for international students

As a leading international student loan company, MPOWER Financing offers no-cosigner student loans that give international students the opportunity to fund their education without the traditional obstacles associated with private student loans. Instead of asking for a cosigner or collateral, MPOWER takes a different approach, evaluating students based on their future earning potential rather than their past financial circumstances.

With MPOWER, you’ll find:

  • Tailored loan options: MPOWER offers student loans ranging from US$2,001 to US$100,000, which can help to pay for tuition, housing, health insurance, and other education-related expenses in the U.S. For loans in Canada, funds can typically only be used toward tuition and university-invoiced expenses. MPOWER loans come with competitive fixed interest rates, no prepayment penalty, and a 0.25% interest rate discount for students who enroll in automatic payments.
  • Quick and easy application process: Applying for an MPOWER loan is straightforward, thanks to a fully digital application system. You can check your eligibility in under a minute and receive a conditional offer quickly. MPOWER works directly with schools to disburse funds, ensuring you receive the financial support you need without unnecessary delays.
  • Benefits: MPOWER understands that financial aid alone isn’t enough to ensure student success. That’s why they offer career support, visa assistance and financial services through our Path2Success program.

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FAQs

Why is it important to compare education loans?

Comparing education loans helps you find the best option for your budget and financial needs. Lenders offer different interest rates, repayment terms and perks, so taking the time to compare can save you money and help you make a smarter decision.

What are the main factors to consider when comparing education loans?

Look at key criteria like eligibility requirements, interest rates and type, benefits beyond funding, tailored loan amounts, fees and the lender’s reputation. Weighing these factors will help you find a loan that fits your situation.

What’s the difference between fixed and variable interest rates?

A fixed interest rate stays the same for the life of the loan, so your monthly payments are predictable and inflation proof. A variable interest rate, however, can change with market conditions – you might start with lower payments, but they could increase over time.

How does the length of a loan term affect repayment?

A shorter loan term means higher monthly payments, but you’ll pay less interest in the long run. A longer term gives you lower monthly payments but increases the total interest you’ll end up paying.

Are there student loans for postgraduate degrees?

Yes! Many lenders offer doctoral or master’s program loans for international students. Some private lenders provide no-cosigner loans based on academic performance and future earning potential, while others may require a cosigner who’s a U.S. or Canadian resident. Universities, government programs and nonprofit organizations may also offer scholarships, grants, or assistantships to help cover tuition and living expenses. It’s always a good idea to explore all funding options before taking out a loan.


*Rates as low as 9.99% (11.16% APR). This interest rate and APR includes a 0.25% discount for automatic recurring payments.

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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