Information About Study Abroad Loans

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  • International Student Loan is pleased to bring you a loan comparison tool for study abroad students. Last year over 260 thousand US students studied overseas, a growth that has doubled in the past ten years. In fact, well over half the number of US students studying abroad traveled to Europe, primarily to the United Kingdom, Italy, France, and Spain. While the experience is invaluable, you may find that you need additional funding to make the dream a reality. That's why we have developed a private loan comparison tool of lenders that provide loans to study abroad students. We have made the loan process easy, quick and simple, comparing those lenders that will help you internationalize your degree in this now globalized world!

    Private Student Loans

    Many study abroad students will find that expenses can add up! With tuition, books, transportation, and living expenses, many study abroad students may soon realize that they cannot financial support their educational studies entirely on their own. However, don't let this deter your dream of getting an education abroad. That's where private study abroad loans come in! Private student loans are available to study abroad students to help cover these costs while studying overseas.

    Eligibility Requirements

    All students must be a US citizen or US permanent resident who will be studying outside their home country through an approved US school either at the undergraduate or graduate level. While a co-signer is not required for study abroad loans, this will ultimately depend on whether the student has a good and sufficient credit history. Applying with a US co-signer may make it easier to obtain a loan and can also increase the ability to get a better interest rate.

    A co-signer is legally obligated to repay the loan if the borrower fails to pay. Often times, the co-signer is a close friend or relative that can assist in getting credit since most students do not qualify for a loan based on their credit history. The co-signer must be a US citizen or permanent resident, with good credit, who has lived in the US for the past two years.

    Application Process

    You can begin the loan application simply by doing a loan comparison that will allow you to choose the lender best suited for you. To make the process go as quickly as possible, you (and your co-signer) will need to complete the entire online application thoroughly. Initial credit approval or denial is very quick and typically takes 2-6 weeks from initial approval.

    Interest Rate Explained

    When you take out a loan through a lender, you will be responsible for paying back the amount of money you borrowed (called the principal) plus an additional amount charged by the lender for the loan (called interest). The interest rate is calculated based on an index plus a margin that will add an additional percentage interest rate depending on your cosigner's creditworthiness. The two most common indexes used for student loans are the Prime Rate and LIBOR Rate:

    Prime Interest Rate
    This index is determined by the federal funds rate which is set by the US Federal Reserve. This is the rate in which banks lend to one another and in many cases the interest rate which commercial banks charge their most creditworthy clients.
    Like the Prime Rate, the LIBOR (London Interbank Offered Rate) is the interest rate that banks borrow from other banks. This rate is based on the British Bankers' Association and used on the London interbank market. The rate is an average of the world's most creditworthy bank's interbank deposit rates for overnight and one year terms.

    When evaluating the loan, the lender will clarify which index the plan uses. Then, there will be an additional margin that will be added to this index based on the borrower's individual criteria, including the co-signer's credit history. Based on their creditworthiness, an additional interest rate will be added to the index which will be the total interest rate you owe. This will appear on your final loan paperwork as Libor + 2.8%. The application is free, and when your application is approved, your specific margin will be disclosed to you. At that point you can accept or refuse the loan. Currently the rates are anywhere between 2.25% APR and 9.11% APR.

    Loan Repayment

    Repayment will depend on the loan option you choose. This is an important consideration since most students cannot work while they studying overseas and other may not want to work while completing their degree. Because of this, students will need to consider the cost of each monthly payment, when payments will begin, and how long students may be able to defer paying back the loan. The repayment period typically ranges from 10-25 years, however the larger the loan, the longer the loan repayment period. There are standard repayment plan options depending on the loan you select:

    Full Deferral
    Students are able to defer payment of the interest and principal until 6 months after graduation as long as full-time status is maintained. Students can defer payments for a maximum of 4 years consecutively which is the typical length of a degree seeking student
    Interest Only
    International students only pay the interest while in school, up to 4 consecutive years, and can defer the principal until 45 days after graduation or when students drop their course load to part-time.
    Immediate Repayment
    Payments on both interest and principal are due immediately once the loan has been issued and dispersed.

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