Student loans are crucial for many students who want to study abroad. This is because of the high cost of education abroad and the fact that many students and their families cannot afford it. However, getting these student loans may seem like a daunting task unless you have the right information. In this article, we will take you through the easiest ways to get a student loan to study abroad.
First, we will walk you through the basics of student loans.
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How do student loans work?
A student loan is a sum of money that a borrower (you) or a student gets from a lender to fund their academic pursuits with the expectation of paying it back with interest over a period of time.
Furthermore, these loans are disbursed directly to the university, and they can only be used for the payment of your tuition, fees, and accommodation.
Note that when you repay student loans:
- The higher the loan (principle), the higher the interest
- The longer you take to pay off a loan, the more you pay back in interest.
Despite all this, repayment schedules and interest rates vary from one loan option to another. For instance, federal loans have lower interest rates than private loans.Â
Therefore, with all this in mind, understanding the simple basics of a loan can make it easier for you to get one and navigate through it.
4 Easy Ways to Get A Loan to Study Abroad
#1. Consider how much you need.
The first step to getting a student loan is to have an idea of how much you will need. To do this, you should determine the cost of your school.
The cost of attendance refers to the amount of money needed to attend the school of your choice over the course of a year. Note that the cost of attendance includes tuition fees, accommodation, board, books, transportation, and feeding.
To find out the cost of attendance for a particular school, you can either search for it on Google or check out the school’s website to contact their student administration.
#2. Research loan options to study abroad:
There are lots of options when it comes to choosing where to get student loans. But the main categories are federal and private loans.
Federal Loans
Federal student loans are loans that students get from the federal government. It helps low-income students finance their academic pursuits. The interest rates on this type of loan are competitive, and they are not based on your credit history.
Furthermore, if you are qualified to get a federal loan, you can decide what parts of the financial package you wish to accept and which you reject.
Examples of federal loans that you should look out for are MPower, Direct Unsubsidized, Stafford, and PLUS loans.
Private Loans
The financial institutions that provide private student loans require things like:
- A cosigner
- Good credit history
Therefore, you should carefully research several options that can offer you better terms, including lower interest rates. Additionally, you can also contact your financial adviser to get a rundown of your loan options based on your financial situation.
#3. Build A strong loan application to study abroad
The loan application process is different, and it all depends on the type of loan you are looking to apply for. Although you should get the details of the loan directly from your lender, as each has its own protocols, there is a general application process for either federal or private types of loans.
Applying for Federal Student Loans to study abroad
You can apply for federal financial aid by submitting the Free Application for Federal Student Aid (FAFSA). This should be submitted for every year that you require financial assistance.
The federal FAFSA deadline for the 2023–2024 academic year is June 30, 2016. Generally, you should submit your FAFSA application well before the deadline to increase your chances of getting the loan. To optimize your eligibility for federal loans, you should submit yours as early as January 1 for the upcoming academic year.
Furthermore, you will get a notification from schools regarding your loan acceptance. Then they will gather their financial aid packages based on the details provided in your FAFSA. At this point, you will have to decide what parts you accept or reject.
Applying for Private Student Loans
Since many companies provide private student loans, there is no single way to complete the application process. Therefore, you will have to submit different application forms to firms that provide student loans.
Nevertheless, private loans require
- A cosigner is someone with more established credit (e.g., a parent, guardian, or sponsor) who signs the loan with you. This person is held responsible if you don’t make payments. Therefore, the better their credit history, the higher their chances of getting a loan.
Therefore, if the financial aid from scholarships, grants, and federal loans does not cover your education, you should consider applying for private loans.
#4. Review the terms of the Student loan:
Student loan terms refer to the terms and conditions that are involved in borrowing money to study. These loan terms include:
- Loan repayment period
- Interest rates
- Default penalty charges and other conditions that may apply
Therefore, carefully reviewing loan terms is important for understanding what student loans entail.
How Do Loan Terms Work?
When lenders give out loans to borrowers, they do so under certain guidelines and conditions. These are spelled out under the loan terms as what is expected by both the lender and the borrower after the loan contract has been signed.
You need to review these loan terms yourself or with your financial advisor because there might be certain obligations required of you by the lender. For instance, there may be excess additions to your repayment, known as penalty fees, if your repayment is past its due date.Â
Generally, reviewing and understanding your loan terms helps you determine the right loan for you and also helps you plan your repayment strategy before you sign up.
How to Get Your Student Loan Money
After you have found a good loan option that suits you, you will sign the contract or promissory note. This is a written promise that you will pay back the loan by the specified date.
For federal student loans, they are paid directly to your school, and the money will be applied to all the charges in your account. If there are leftovers, the school will refund them to you. However, it is advisable to use the refund to repay the loan.
For private student loans, they are usually disbursed directly to your school. As well as federal loans, you will get a refund if there are any leftovers.
Contact EdXtra For Your Student Loan Application SupportÂ
At EdXtra, we understand that to build an inclusive global economy, education should be based on the potential for value creation.
Therefore, through our global education lending partners, we now help and support African students to fund their graduate education in the US, Canada, or the UK. Note that you don’t need collateral or a cosigner.
Are you an African graduate student with future career potential? Edxtra Student Loan Support Service will provide you with the needed expert support and guidance to get student loans from our global lending partners to study abroad at leading global universities.
Read Also:
Can I Get Student Loans As An African Living In Africa?
What Happens If I Default On My Student Loan?
The Complete Guide to Student Loans for International Students in the US
