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Choosing a private education loan company

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For international students, private education loans are one of the best ways to finance a postgraduate degree in the U.S. or Canada. Government loan programs typically aren’t available to international 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 international students, but it’s important to choose the right lender.

Types of  education loan companies

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 international students as more of a risk than domestic students. International students tend to have no credit history in the country and no property or valuables to offer as collateral. As students, they have little income and their future earning potential is unknown. To offset this risk, most education loan companies require international 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 international students don’t have those kinds of contacts, 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 international 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.

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How to choose the right education loan company

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

  • 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 your home country as well.
  • 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.
  • Look for benefits beyond funding: Some lenders are better suited to working with international students. These companies may offer benefits like visa support or career services that can help international students through the complicated process of immigrating to the U.S. or Canada and eventually finding an internship or a job there.

All about education loans: terms and conditions

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.
  • 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.
  • 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 annualizing the full cost of the loan based on the interest and fees charged.
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MPOWER Financing: loans for international students

MPOWER Financing is a leading education loan company dedicated to helping global citizens 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-US$100,000 with competitive interest rates that are inflation protected.
  • Automatic payment discounts: International 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.

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FAQs

What is an education loan company?

An education loan company is a financial institution that provides student loans to help cover the cost of tuition, fees, housing and other educational expenses. These companies can be private lenders, banks, credit unions or organizations specializing in student financing.

What’s the difference between private education loan companies and government loan programs?

Private education loan companies operate independently and set their own terms, while government-backed loans have standardized terms and lower interest rates, but are typically not available to international students who often rely on private lenders.

Can I refinance my current education loan with a different education loan company?

Potentially, some loan companies offer refinancing, which can lower your interest rate or extend your repayment period. However, eligibility requirements for refinancing vary by lender.

Can I take out multiple loans from different education loan companies?

Yes, students can combine loans from different lenders to cover all expenses. However, managing multiple loans means tracking various repayment schedules and interest rates and some lenders are restrictive in this way.

How do I know if an education loan company is reputable?

Look for reviews on sites like TrustPilot, check their track record, confirm they are registered with financial authorities and ensure they have transparent terms and conditions. Avoid lenders with unclear terms or hidden fees.


*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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