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Applying for foreign education loans

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For international students hoping to study in the U.S. or Canada, finding a way to pay for their education is a number one concern. The cost of education and living expenses can be quite high in North America. For many students, personal savings and family contributions will cover only part of the cost of a graduate degree. Since government grants and financial aid are typically not available to foreign students, foreign education loans are often the best way to finance a degree. This brief overview discusses the options for student loans for studying abroad and how to find the loan that’s right for you.

Foreign education loans : what’s possible?

International students studying in the U.S. and Canada aren’t eligible for the same federal grants or loan programs that citizens of these countries can apply for. In addition to this limitation, you may face additional hurdles as you figure out how to fund your education.

  • Limited scholarships and financial aid: Some organizations and schools offer international scholarships and financial aid for international students, but these tend to be highly competitive and often have strict eligibility requirements.
  • Cosigner requirements for private loans: Private lenders are organizations like banks, credit unions and other financial institutions that offer loans for study abroad. However, most private lenders require a cosigner – a U.S. or Canadian citizen or permanent resident who’s willing to accept the responsibility of making payments on your loan if you cannot. Finding a suitable cosigner can be difficult if you don’t have family or close friends in your host country.
  • Lack of credit history: International students often don’t have a credit history in the U.S. or Canada, which can make it difficult to qualify for traditional loans. Many lenders rely on credit scores to assess risk. Without this strong financial record, getting a loan approved can be challenging.
  • Collateral requirements: Some lenders ask students to provide collateral, such as property or savings, to secure a loan. If you or your family don’t have assets to pledge, this type of private loan is unavailable.

Despite these challenges, there are lenders that offer international education loans without collateral or a cosigner required. These options are a valuable alternative for many international students.

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The benefits of no-cosigner loans

No-cosigner foreign education loans are loans that don’t require international students to offer collateral or find a cosigner. With this type of overseas education loan, lenders evaluate students based on a different set of factors than other loans. Instead of looking at your credit history, financial status and level of income, no-cosigner loan lenders base loans on criteria including your previous academic record, your future potential for success, your field of study, the reputation of your chosen school, and your expected income after you graduate.

As you consider the best way to study abroad on a budget, no-cosigner foreign education loans offer several big benefits.

  • Financial independence: With a foreign education loan without a cosigner, your financial future won’t be interconnected with anyone else. You will be the only person responsible for making decisions about your loan.
  • Avoiding risk for a cosigner: A no-cosigner loan avoids potentially damaging your cosigner’s credit profile and financial health if you run into difficulty making payments at some point.
  • Building your own credit score: Taking a loan in your own name and making timely payments will help you to establish and build a strong credit profile and financial foundation in the country where you’re studying.
  • Flexible coverage: No-cosigner foreign education loans can be used to pay for a wide range of educational expenses in the U.S., including tuition, fees, books, supplies, housing, meal plans and more. In Canada, no-cosigner loans can be used to pay for tuition and other university-invoiced expenses.

How to apply for foreign education loans

When you’re ready to apply for a foreign education loan, following these steps can make the process faster and smoother.

  • Determine how much you need to borrow: Along with tuition, your expenses will include money for room and board, books and other supplies. For income, factor in any personal savings or family contributions, as well as any financial aid or scholarships that you have received from the school. The difference is the amount you’ll need to borrow.
  • Do your research: You’ll find lots of companies online offering foreign education loans to international students. Be sure to review the reputation and customer reviews for each lender as well as their educational loan requirements to make sure you and your school qualify for their loan program.
  • Choose a type of loan: If you have a cosigner, you’ll qualify for a wider range of options that may have slightly better interest rates. If not, look for lenders offering no-cosigner loans.
  • Compare offers: Compare the interest rates and terms offered by each lender. Lower rates will help you save money on interest over the life of your loan. Repayment terms determine how and when you repay the loan. Be sure to look at the fees each lender charges as you calculate the total cost of the loan.
  • Fill out an application online: Most lenders offer online applications. You’ll need to provide details about your school, your date of enrollment, your program of study, financial information and other personal details.
  • Review your conditional offer: After reviewing your application, lenders may provide a conditional offer. You’ll have a few days to look closely at the amount of money they’re offering, the interest rate and the terms of the loan.
  • Upload your documents: To get final approval for a loan, you’ll need to share more information with the lender. This may include details like test scores, English proficiency scores, an admission letter from the school of your choice, educational transcripts and your passport.
  • Get your loan approval: After receiving your documents, lenders will review your materials and make a final decision. If you’re approved, the lender sends funds directly to your school to cover your costs. It’s a good idea to start your application early to make sure you can complete the process before your studies begin.
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MPOWER Financing: No-cosigner foreign education loans

MPOWER Financing is dedicated to helping international students overcome the financial obstacles they face when pursuing a postgraduate education in the U.S. or Canada. Founded by two international students, MPOWER provides no-cosigner foreign education loans and support for every step of your educational journey.

  • Flexible international student loan options: MPOWER offers loans from US$2001-US$100,000 for study at 500+ U.S. and Canadian schools. Interest rates are fixed and competitive, with no prepayment penalty.
  • Fast applications and approval: International students can quickly check eligibility and apply for a foreign education loan where MPOWER will assess and provide a conditional loan offer typically within a day.
  • Benefits for success: Along with financing options, MPOWER offers a wide range of visa expertise and support services, career services, scholarships, assistance in finding student health insurance to help students navigate the complicated process of funding an education in the U.S. or Canada.

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FAQs

What’s a foreign education loan?

Foreign education loans help students from one country pay for their education in another country. In the U.S. you can use these loans to pay for housing, living expenses and other education related costs. For loans in Canada, funds can typically be used toward tuition and university-invoiced expenses.

Do all private loans require a cosigner?

No, not all private loans require a cosigner. Some lenders, like MPOWER Financing, offer no-cosigner loans to international students based on factors such as future earning potential and academic performance.

How do I choose the right lender for a foreign education loan?

When selecting a lender, consider factors such as interest rates, repayment terms, eligibility requirements and the lender’s reputation. It’s also helpful to read reviews and seek recommendations from other international students.

What is the difference between fixed and variable interest rates?

A fixed interest rate remains the same throughout the life of the loan, providing predictable, inflation-proof monthly payments. A variable interest rate is tied to economic conditions and can change over time – payments may be lower during a strong economy but higher when the economy suffers and the cost of borrowing money goes up.

Can I apply for multiple loans to cover my education expenses?

Yes, you can apply for multiple loans. However, it’s important to consider the total amount of debt you’ll have after school and to make sure you can manage the repayments. Some lenders may also have restrictions on borrowing if you already have existing loans.


*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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