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Student loans for studying abroad

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The cost of education in the U.S. or Canada can be challenging for international students who dream of studying abroad. The government grants and financial aid that American and Canadian students enjoy simply aren’t available to foreign students, which makes private loans for study abroad one of the best options. This brief overview covers the various types of student loans for studying abroad, how they work, and why no-cosigner loans may be the best option.

The challenges of financing your studies abroad

Studying in the U.S. or Canada is a great opportunity, but paying for it can be a real challenge. For example, one year at an American university may cost as much as US$70,000 or more. When your personal savings and contributions from your family won’t cover the cost of a graduate education, you’ll need to look for alternative funding sources.

Since international students don’t qualify for federal student loans, scholarships and private loans are your best options. University funding and scholarships are great if you can get them, but you’ll usually find many students competing for the same funds. And though private loans are widely available, private education loan lenders may see international students as more of a risk, since they inevitably don’t have a strong credit history in the U.S. or Canada.

To minimize their risk, lenders may ask borrowers to offer collateral such as property or assets equal to the loan amount, or they may require a cosigner. This is usually a U.S. or Canadian citizen with a strong credit score and the financial ability to repay the loan if you cannot make payments. That’s a big thing to ask of anyone, especially if you don’t have friends or family in the country willing to take on that responsibility. That’s why no-cosigner student loans for studying abroad may be the best option.

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No-cosigner student loans for studying abroad

Some lenders offer study loans without collateral or cosigners. These are companies that understand the challenges international students face and are dedicated to helping students overcome the barriers of financing an education abroad.

With no-cosigner student loans for studying abroad, lenders evaluate things like your previous academic successes and future earning potential rather than your current financial situation. They may consider your field of study and the college or university you’ve chosen. If they decide to offer you an overseas education loan, it’s because they believe in your potential to be successful in school and your chosen field.

With a no-cosigner student loan for studying abroad, you can:

  • Stay financially independent. Manage your loan independently. With a no-cosigner loan, your loan repayment won’t involve a friend or family member as guarantor.
  • Avoid jeopardizing family relationships. Staying independent also means you won’t risk straining relationships with friends or family if repaying your loan becomes difficult in the future.
  • Cover all educational expenses. You can typically use funds from a no-cosigner loan to pay for all your educational expenses in the U.S., including tuition, fees, books, housing, meal plans, transportation, and other costs. In Canada, you can typically use your loan funds to pay tuition and other university-invoiced expenses.
  • Build a credit history. When you take out a loan in your name and make monthly payments, you will immediately begin establishing a credit history that will give you more financial flexibility in the future.

All about no-cosigner student loans

Here are some considerations as you research lenders and compare no-cosigner student loans for studying abroad.

  • Eligibility: Before applying for a loan, be sure it’s one you’re eligible for. Carefully review the requirements of the loan, your school and your program.
  • Visa requirements: Be sure your loan and financial documentation align with your visa application requirements. When applying for a student visa, you’ll need to demonstrate that you have sufficient funds to cover your educational expenses. Your loan approval can be an important part of this documentation, showing immigration officials that you’re financially prepared for your studies.
  • Interest rates: Interest is the amount of money you’ll pay the lender in addition to the original loan amount. The higher your interest rate, the more your loan will cost. With a loan with a fixed interest rate, you’ll pay the same amount each month which is great for budgeting and hedges against inflation. The interest rate on variable-rate loans may change year to year, based on economic conditions. These may help you save money when interest rates are low, but if interest rates rise sharply, you may end up paying more.
  • Term of the loan: This is the number of years you’ll be given to pay back the loan with interest. The longer the term, the lower your payments will be, but the more money you’ll pay in interest over the life of the loan.
  • Repayment options: Some lenders offer a grace period, allowing you to wait until you’ve graduated to make payments. Others may allow you to pay only the interest on your loan while you’re in school.
  • Borrowing limits: Lenders set different minimum and maximum borrowing amounts. Make sure any loan meets your total funding needs.
  • Fees: Many student loans for studying abroad come with a variety of fees. Application fees, origination fees, late fees, collection fees, and returned payment fees are the most common. Understanding and adding these fees will help you calculate the annual percentage rate (APR) or the total cost of your loan. Knowing the APR will help you compare loans.
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MPOWER Financing: A leader in no-cosigner loans

Offering no-cosigner student loans for studying abroad, MPOWER Financing is dedicated to making loans based on your future potential rather than your past. Since 2014, MPOWER has helped thousands of students achieve their dream of studying abroad by removing the financial obstacles they face when financing an international education.

MPOWER offers:

  • Fixed-rate, inflation-proof foreign education loans from US$2001-US$100,000
  • Competitive interest rates
  • No cosigner or collateral requirements
  • No prepayment penalties
  • Fast application and seamless disbursement processes
  • A wide range of scholarships
  • Visa services, including a free visa support letter and visa prep course
  • Career services, including a customized intern/job search tool for F-1 students, application support, a resume builder, and a directory of F-1-eligible jobs
  • Financial services, including a prequalified U.S. credit card and bank account

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FAQs

My school is not on MPOWER Financing’s list of eligible schools. Can I still get a student loan for studying abroad?

MPOWER Financing provides loans to students at over 500 schools in the U.S. and Canada that they believe offer the best opportunities for international students. If your school isn’t on the list, unfortunately, you won’t be able to apply for a loan with MPOWER at this time. However, check back later – new schools are added periodically.

What’s a student loan for studying abroad?

Student loans for studying abroad are private education loans designed for students studying in the U.S or Canada. Since international students aren’t eligible for federal student loans from the U.S. government, private loans from banks, credit unions or online lenders are the main option. Before taking out a loan, it’s always a good idea to explore scholarships and grants first to reduce the amount you need to borrow.

How long does it take to pay back a student loan?

It depends on the lender, but a typical repayment term is around 10 years. If your income increases, you can usually make extra payments to pay off your loan faster and save money on the overall interest paid on the loan.

Are interest rates higher for no-cosigner loans?

They can be. Since lenders take on more risk with no-cosigner loans, the interest rates can be higher. However, rates vary widely based on the lender, your academic background, and your future earning potential. It’s always smart to do an education loan comparison to find the best deal.


*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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