by Jennifer Frankel
Once your students have maximized their scholarships, they may need more financial help. International student loans can be a great way to borrow money to help cover their education fees.
Good afternoon and thank you for joining our presentation on how to get an international student loan. My name is Jennifer Frankel and I’m the Director of Financial Services. I’m pleased to be joined by Bryanna Davis and Victoria Troupe who are both Marketing Coordinators here at International Student Loan. We are excited that you’ve decided to join our conversation as we will be providing you with a complete overview of the international student loan process. But before we get started, I want to take this time to let you know that we’ll be answering your questions at the end of this presentation. Use the chat window on the right throughout this presentation to get your questions in so that we have time to answer them at the very end. You can also join the conversation at #FinancialAidTalk which you can see at the very bottom of the screen or our handle E@intlstudentloans on Twitter. After this presentation we’ll be adding additional resources on our Facebook and Google+ account so be sure to check it out.
So with that, let’s get started. To give you a roadmap of today’s conversation, we’ll begin by talking more about what is a student loan and how this should fit into your overall financial aid package. Next, we’ll talk about the requirements of a student loan before you even apply. Then, we’ll discuss the entire student loan application process from start to finish. And finally, we’ll take your questions at the very end.
Before we dive into the details though, first it’s important to know what a student loan is. Unlike scholarships, grants and fellowships which award money without the obligation to pay the money back, a student loan is when you borrow money for a certain period of time, after which you pay the principle back plus a cost to borrow that money (which we refer to as interest). There are two types of student loans. The first one is federal loans, you may have heard of Stafford loans for example. Unfortunately international students are not eligible for federal loans but the good news is that they are eligible for private student loans.
These private student loans are typically done through banks and can be issued at any time throughout the year. So, for example, if you are starting the semester or even if you have an interruption of funds, let’s say a family member no longer is able to financially support you, this can help. You can borrow up to the total cost of your education minus any financial aid you’ve received (such as scholarships for example). Before choosing your loan, be sure to review and understand the terms and conditions. This can be very difficult especially with a lot of jargon so we have a resource section on International Student Loan where you can review the different terms but the major ones are interest rate, which I mentioned, is the cost of borrowing the money. The lower your interest rate, the lower your cost. Next is the repayment period which is the amount of time it takes to pay the money back. There is also the deferral period which is when you actually start making the payments – it could be right away or it could be after your graduation. Be sure to think about these and think about them wisely as both of these options - your repayment of the deferral period - will influence your cost of borrowing. Obviously, the longer it takes to pay back the loan, the most costly it can be. The good news is that once you apply, you’ll get initial approval within two to six weeks.
Remember, international student loans are a great way to help cover your educational fees. Be sure to first maximize the money you don’t have to pay back, such as scholarships, fellowships, and other awards. Then, you cover your costs with your own savings and help from family members such as your parents or distant relatives. If there is still a gap, you can then apply to international student loans to cover the rest.
So, once you are ready to apply, it’s important to make sure you have all the needed checkmarks for your application. I’m going to turn it over to Bryanna Davis to talk more about the requirements of international student loans.
Thank you Jennifer. Alright, so let’s take a look at a few of the requirements that you have to have met in order to apply for an international student loan. First is going to be a cosigner. Now since most international students coming to the US don’t typically have an established line of credit, a cosigner is going to be needed and also required. This might seem like a hurdle, but it’s actually a good thing for you because a cosigner is essentially joining the loan application which means that their credit will help you to be approved and get the best interest rate possible. Now when you get the best interest rate possible, this means less money that you have to pay back later on. So that’s good news for you. Now there are a few things that cosigners do need to meet whenever it comes to if they are eligible to become a cosigner. Those are that they must be a US citizen or permanent resident that has lived in the US for the past two years and that they have good credit history. So they must have all three of those items met. Now keep in mind that the credit history criteria is going to vary by each lender, so you will want to ensure you find a cosigner with as good of a credit history as possible. Now if you are a US citizen then a cosigner is not required. So you don’t have to have a cosigner in order to apply. However, it’s typically a good idea to still try to find a cosigner that way, once again, because you will be approved for an international student loan and get the best interest rate possible.
Now something else that you’re going to need in many cases is going to be a social security number. If you do not have a social security number and you are going through the online application for a loan, something that you can do is give the lender a call and see if they have a paper application that does not require the social security number. And this might be a way around having to have a social security number in order to apply for an international student loan.
So now that you know you need a cosigner, let’s take a look at who exactly is appropriate to become a cosigner because this is often a hurdle for international students trying to get a loan is: they don’t have a cosigner but they’re not sure who to ask to be one for them. A few good individuals to ask is family members and friends. Individuals whom you do not want to ask include people at random businesses that you may have worked with in the past or people at your schools, such as international student advisors or professors, people that you don’t know well. Typically, the rule of thumb is: if you wouldn’t lend them money a large sum of money then it wouldn’t be a good idea to ask them to cosign for you.
So once you have found an appropriate cosigner, then it’s time to find a lender. First of all, it’s important to realize that not every lender will work with every school and not every lender is going to work with international students. You will need to find a lender that’s willing to work with the school you plan on attending and also willing to lend to international students. Instead of spending hours researching possible lenders on the internet, I’m going to hand it over to Victoria Troupe who will share more about comparing lenders and how to find the best option for you.
Thanks Bryanna. So how do you actually apply for an international student loan? Well, after you have found a cosigner and have been admitted into the college of your choice in the US, that’s when you should be ready to apply for an international student loan. What we have done at internationalstudentloan.com is put together the first student loan comparison tool. It shows what lenders are available for individual schools and allows you to apply for the loan right on the website. It is a great tool to use and serves as a “one stop shop” to weigh all of your student loan options. It’s easy to use as you can see on the screen and I’m actually going to walk you through it on the actual website.
So here we are, this is www.internationalstudentloan.com and it shows you exactly what to do here in the green boxes. First of all you need to choose ‘are you a US citizen or permanent resident?’ If you are an international student studying in the US choose ‘no.’ the next question is: do you have a US cosigner? As Bryanna mentioned earlier, you will need one in order to receive an international student loan. So for this question you should be answering ‘yes.’ Then you will choose the state of school you’ve been accepted to. For example, we are going to choose Florida and then you will need to choose the name of your school. So for example, all of these are schools in Florida, so scroll down until you see the appropriate option. For our example we’re going to use the University of Florida and then it will ask you for an email address so we will put one in for this example. Then we are going to click on ‘find my student loan’ right here with the green button. Simply click there and wait for the computer to load. This is going to show you all of the loan companies that are loaning to international students at your loan specifically. The lenders will be different depending on the school you are attending and additional lenders are added constantly, so be sure to check back frequently.
Now after you have used the tool to see what lenders are available to you, see which one works best for you because you may have numerous options and simply click on the ‘apply now’ button in red. From there, the entire application is available online and you can borrow up to the full cost of your education minus any other aid you have received, like scholarships. So that was the hard part and now you are really started towards your international student loan! So what happens now? You will receive your initial email approval within 48 hours and weeks later, to let you know if you are automatically approved. Then you will be asked to complete some additional documentation, sometimes being a lending disclosure which is required by law. Once you are approved for the loan you will have to sign a self-certification form and a master promisary note – which will be sent from your lender directly. Then your school will need to certify the loan, which is a step that you won’t be involved in. Your lender will communicate with your school specifically to certify your loan and ensure funding is distributed correctly. Any additional amount will be sent to you from the school. Contact your school directly if you have any questions about the timing of the disbursement, when you can expect your money, etc.
So that was a quick overview of our student loan comparison tool and we hope you will use it as soon as possible. In conclusion, we want to let you know that a student loan can help you fund your education even if you are an international student. These loans are available are available as long as you have a US cosigner and the best place to start is the website I just showed you: www.internationalstudentloan.com.
Now we are going to answer a few of the questions you have been submitting and please continue to submit them, as we will get through as many as we can. You can join the conversation on Twitter with #FiniancialAidTalk and incase we don’t get through all of the questions we will post them on our social media accounts. Jenny would you like to take over?
Yes, absolutely. Thank you Victoria. We want to again thank you for attending our discussion on how to get an international student loan. We will be holding our next webinar on March 6th on 8 Steps to Write a Killer Essay so be sure to follow us on Twitter, Facebook and Google+ to get more information on registration. Also, if you have ideas of a webinar that you want to see let us know through those different social media outlets and we’ll be taking feedback as we craft our upcoming webinars.
We want to thank you all for submitting your questions and will get to as many as possible. If you do not see your question here, please check out our social pages as we’ll be listing your questions and additional resources. Again, if you have any questions on terminology, be sure to check out the Resources section on International Student Loan.
So, let’s get straight to your questions:
Question: “I do not know anyone in the US and to get a loan I need a cosigner. Is there or are there no alternatives?”
Answer: the way these private student loans work is that they are non-collateral loans. What that means is that you are not putting up an actual asset like a car or house, so these lenders require that you have someone in the US that’s basically signing on to the application with you in case you cannot pay the money back. That person will instead. Because of that, that person does need to be a US cosigner. So even if you are from another country and you have someone at home that will cosign your loan, they do have to meet – as Bryanna mentioned – three requirements:
Question: “I have a US cosigner but they do not have good credit. Can I still apply?”
Answer: What happens when you apply for a student loan is that you are going to put the cosigner information on the application and they are going to do a credit check. It’s always a good idea, if you are not completely sure, to apply for the student loan. What the lender will do is review the conditions and come back to you to let you know:
The cosigner is valuable because it really does effect the interest rate on your student loan. The better credit your cosigner has, the more favorable your interest rate. So, if you are unhappy with the terms you got, you can always find another cosigner instead.
Question: “What about loans for US students studying abroad?”
Answer: Here at International Student Loan we offer two study abroad loans. The first is a loan for students going through a program in the US and getting credit from that US institution. As long as they are an approved school then you are eligible and as Bryanna said, if you are using that same tool on international student loan, you would select ‘US citizen’ and be matched directly. The second kind of loan is foreign enrolled loan, meaning if you are a US citizen enrolling directly in a foreign school and if this is the case, there are loans for you as well. So the best thing to do in any situation is to use that tool on www.internationalstudentloan.com because it takes all of your information and quickly matches you with appropriate loans.
Question: “Do I ask for the student loan after I have been accepted to the university?”
Answer: We are asked this a lot, and the answer is yes. You do have to be accepted by the university in order to apply for a student loan and the reason for that is because student loans do have to be approved by your school. So it’s important to first choose the university and be accepted before applying for student loans. Sometimes you may be able to apply for the loans and you can use those funds to prove proof of financial solvency, which states you have enough funds to cover the cost of tuition. Be sure to check with the financial aid office because this will vary by institution.
Question: “How do I get a cosigner?”
Answer: Getting a US cosigner is oftentimes difficult for international students, especially if they don’t have ties to the US. Cosigners can be family members, friends, basically anyone who is willing to sign the application, but keep in mind it’s a big undertaking for your cosigner because they’re essentially putting their credit on the line so that you can get a student loan. When you approach them, let them know that you understand the risks involved and it’s unfortunate that cosigners in your home country will not work for this kind of loan as the rules require a US cosigner.
Question: “What are the criteria to be a cosigner?”
Question: “How can I get a grant in preparation for a master’s degree?”
Answer: Grants are different than loans. There are many different sources of financial aid: grants, scholarships, and a number of different awards you can get – which are typically funds you don’t have to pay back and because of that you receive the money and can put it towards your education. There are many different resources out there, one of with being www.iefa.org and there you can find a list of scholarships and fellowships. Of course it’s always a good idea to contact your university directly for different types of grants. International student loans can also help if you have already been accepted to a school you can borrow up to the total cost of your education.
Question: “Is there any cap to the amount a student can be offered for an international student loan?”
Answer: Yes, the way that international student loans work is you can borrow up to the cost of your total education minus any other awards you have received. For example, if you received a scholarship, it would be your financial aid minus the amount of your scholarship award. All of this is determined by your institution, so if you aren’t sure of the cap amount, we suggest talking to the financial aid office or the international student advisor to find the total cost of education. Lenders want to ensure you are only borrowing as much as you need and that’s another reason why lenders and schools work so closely together.
Question: “From where are these loans coming? Is it from the US government?”
Answer: This is a great question and the loans are coming from US banks, not the government. As I mentioned earlier with the different types of student loans, there are federal loans – which are though the government and there are private student loans- which are done through banks. Federal aid is not typically given to international students, so these are private banks who are working with international students and their universities to provide these funds.
Question: “What if I don’t have any aid or scholarships?”
Answer: That’s fine if you don’t have any aid or scholarships because there are not required. If you have any savings or family income that you are going to put towards your education, ensure you consider that before you calculate the total costs you want to borrow for your loans. Remember how much you borrow and the timeframe from which you borrow will all affect interest rates so you want to think of international student loans as covering the gaps to ensure you’re able to afford your education.
Question: “Could you repeat the website about grants?”
Answer: www.iefa.org we actually had a webinar last month where we discussed scholarships. If you would like to hear more on the subject, ensure you connect with us on Twitter and Facebook or Google+ so we can ensure all of your questions are answered.
Question: “How long does it typically take to pay back a loan?”
Answer: This will all depend on the loan that you choose. There are a number of different lenders that you may be eligible for and your repayment can start right away or it could start right after school and it can go for as long as the term of agreement is. Obviously if you have a longer period of time in which you can repay the loans, your interest rates will be higher. If you want the lowest interest rate it’s always best to repay as soon as possible but obviously you need to look at your pocketbook. Before accepting the loan ensure you know when payments will be due, the interest rates and exactly when you will be required to start paying and ensure you will have the funding to do so.
Again, we want to thank you for attending our presentation on how to get an international student loan and hope you found it helpful. We will continue this conversation on Twitter so be sure to find us @InternationalStudentLoans and will continue answering your questions throughout the day. If you aren’t on Twitter check us out on Facebook or Google+ to keep in touch and look out for our next webinar. Thank you for coming and we all hope you have a wonderful afternoon.