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The best overseas education loan options

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Studying overseas in the U.S. or Canada gives you access to world-class education, globally recognized degrees and great career opportunities. However, the cost of a postgraduate education in these countries can easily amount to US$70,000 or more, depending on the school you choose. If your personal savings and financial help from your family won’t cover these costs, an overseas education loan is one of the best ways to finance your education.

Types of  overseas education loans

Overseas education loans are the most common way for international students to finance their postgraduate studies in the U.S. and Canada for several reasons.

  • International students are not eligible for grants or low-cost loans from the U.S. or Canadian governments.
  • Scholarships and financial aid from universities are limited and highly competitive.
  • Loans for study abroad from home-country banks may not be as affordable as foreign education loans from U.S. or Canadian lenders and may not cover the total cost of education.

Typically, the best options for overseas education loans are from private education loan lenders. These are businesses like banks, credit unions or other financial institutions that specialize in providing loans for students. There are two types of private education loans: loans with a cosigner and/or collateral and loans without these requirements.

Loans with a cosigner/collateral

Lenders often consider international students a higher risk because they typically lack a credit history in the country where they’re studying. There’s also the potential for them to leave the country after graduation, making it harder to collect on the debt if they default. As a result, lenders often require a cosigner or collateral when lending money to international students. Collateral is property or assets you offer to help secure the loan – something the lender could take if you’re unable to make payments. A cosigner is a U.S. or Canadian citizen or permanent resident who agrees to repay your loan if you cannot. Cosigners must have a strong credit history and a solid financial standing. Many international students have neither valuable assets to offer as collateral nor a close friend or family member who could serve as a cosigner. In this event, no-cosigner loans are often the best option.

Loans without a cosigner/collateral

Some lenders are willing to offer overseas education loans to international postgraduate students without requiring a cosigner or collateral. Rather than evaluating your credit profile or your current financial picture, these companies base their decisions on your potential for success. They look at your academic record to date, your chosen program of study, the school you want to enroll in, and the kind of income you might expect after graduation. With study loans without collateral or cosigners, the lender bases their loan decision on the confidence you’ll successfully complete your degree, find a job and make enough income to repay the loan.

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How international loans work

Here are the details you should know about overseas education loans as you research options and apply for funding.

  • Student loan interest rates: The interest rate on your loan determines how much money you’ll pay the lender on top of the amount you borrowed originally. The higher the rate, the more the loan will cost overall. Interest rates may be fixed, meaning the monthly payments will be the same from start to finish which acts as a hedge against inflation, or they may be variable. With variable rate loans, your payments may change each year as financial markets rise and fall. You may start with a better rate than a fixed rate loan, but the payments could rise as the economy changes.
  • Terms: The term of your loan is the number of years you have to pay it off. Most student loans have a 10-year term, but lenders may offer longer or shorter terms as well. Longer terms mean lower payments but more paid in interest over time, while shorter terms mean higher payments and less paid in interest.
  • Repayment options: With most student loans for studying abroad, you’ll make monthly payments until you have paid off the loan. Some lenders will let you delay the start of payment until after you’ve graduated or even later, while others will require you to make payments or interest-only payments while you’re still in school.  It’s important to note that if you delay payment, you continue to accrue interest on your loan, which drives up the overall cost of the loan over time.
  • Fees: Student loans often come with a variety of fees that can affect the total cost of the loan. These include application fees, origination fees, late fees, required insurance, prepayment penalties and more. It’s important to calculate these into the cost of the loan as you’re making your decision.
  • Eligibility: To qualify for an overseas education loan, you must meet certain educational loan requirements. Some lenders only fund international students at certain schools and in certain fields of study, or they may require that you have a specific academic standing.

The advantages of no-cosigner loans

A no-cosigner overseas education loan offers several advantages over traditional loan arrangements.

  • Greater independence: You won’t need a family member or friend to help you secure a loan, allowing you to have full control of your education financing.
  • Increased funding: You may be able to borrow more money with a no-cosigner student loan than with a loan that’s tied to the financial status of a friend or family member with limited income.
  • Credit-building opportunities: Making timely payments on a no-cosigner loan can help you build a credit history in the U.S. or Canada, which will give you more financial flexibility and freedom in the future.
  • Easier application process: The process for applying for a no-cosigner loan is usually faster than traditional loans, since you don’t need verification or credit checks for a cosigner.
  • No risk to collateral or family finances: You won’t be risking the personal assets of your friends and family if you run into difficulty making payments after graduation.
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MPOWER Financing: Overseas education loans without a cosigner

MPOWER Financing is a leading provider of no-cosigner overseas education loans, helping international postgraduate students to overcome the barriers of financing their postgraduate degrees in the U.S. and Canada. Providing fixed-rate student loans to high-potential students from 200 countries, MPOWER also provides expert visa support, career services and scholarships to help students throughout their education journey.

With MPOWER, students can count on:

  • Competitive, fixed rate student loan: MPOWER’s fixed-rate loans offer inflation-proof predictability throughout the life of the loan.
  • No cosigner or collateral requirements: MPOWER bases lending decisions on future potential rather than credit history.
  • Fast application process: The online process makes it easy to check eligibility, apply for a loan and receive a quick conditional offer. If approved, students can access funds without the need for complex paperwork or unnecessary delays.
  • International scholarship opportunities: MPOWER offers a variety of scholarships for international students enrolled in full-time degree programs at eligible U.S. or Canadian schools.
  • Health insurance: MPOWER’s resources can help students find international student health insurance options that may save them money compared to other plans while meeting their school’s insurance requirements.
  • Visa support: MPOWER provides a free visa support letter and visa prep course along with custom services from former consulate officials for a modest fee.
  • Career services: MPOWER loans come with a custom internship/job search tool for F-1 students, a resume builder, application support and a directory of F-1 eligible jobs.

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FAQs

Can I apply for an overseas education loan before being accepted into a university?

Some lenders allow you to apply for preapproval before receiving an admission letter, but final approval typically requires proof of enrollment in an eligible institution.

What happens if I can’t make my loan payments after graduation?

If you face financial difficulties, some lenders offer deferment or forbearance options, allowing you to temporarily pause or reduce your payments. However, interest may continue to accrue increasing the overall cost of your loan.

Can I use my overseas education loan for expenses beyond tuition?

Yes, many lenders allow students in the U.S. to use loan funds for education-related expenses like housing, food, transportation and health insurance, but this varies by lender. For loans in Canada, funds can typically be used toward tuition and university-invoiced expenses.

How do lenders determine my future earning potential when applying for a no-cosigner loan?

Lenders consider factors like your field of study, university ranking, job placement rates and salary trends for graduates in your field to estimate your potential income.


*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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