One of the most daunting aspects of international students coming to study in the United States is not only moving to a completely new country, but the prospect of having debt due to education loans. International student loans are becoming more and more common in regards to international students paying for the education in the United States.
Often, one of the most important terms of a loan is the repayment terms. Most often, loans have different repayment terms; normally, there is no uniform repayment term because everybody has different needs. This term is also important because for the most part, international students cannot work while in the United States (we have previously detailed the exceptions here and here). A few things to consider about the repayment term is:
- How much the monthly payments will be,
- When do the payments begin,
- How long you can defer paying back the loan.
Again, like most repayment terms, the range of time that you will have to repay the loan varies, but an average range is somewhere between ten and twenty-five years. There are typically a few options for repayment. These include:
- Immediate Repayment: once the loan has been realized, the interest and principal payments are due immediately;
- Interest Only: while in school, for up to four years, the international student only has to pay the interest applicable to the loan. Then, the international student can defer their payment for up to either forty-five days after graduation, or until they drop their course load from full-time to part-time;
- Full Deferral: this is when an international student can defer their payment until up to six months after their graduation as long as they have maintained the status of a full-time student. This means that payments can be deferred for up to a maximum of four years, or the typical time it takes to receive a degree.
Again, these are only the standard methods of repayment. When taking out an education loan to study in the United States, make sure you understand the repayment options and choose the one that best fits your financial situation.
When choosing an education loan, one of the many important factors to look at is the interest rate. For example, if you are an Indian student looking to study in the United States, you may look at both Indian and United States financing options. Typically, the annual interest rate in India may be higher than that found in the United States. (note: suggest doing some of your own research to find differences in interest rates).
When it comes time to repay your loan, there are many options available. Some of these include:
- Standard Repayment: this is when you pay a fixed monthly amount for up to a total of ten years. Typically, the minimum amount you can pay per month is $50.
- Extended Repayment: this is pretty similar to standard repayment, except the term can be between twelve and thirty years. It depends on how much money was borrowed. Overall, the monthly amount due is smaller, but with interest rates, it increases the total amount of money repaid over the lifespan of the actual loan.
- Graduated Repayment: this method starts out with smaller monthly payments, which over time slowly increase. The term for these loans is typically twelve to thirty years.
Again, these are simply a few of the many repayment options available. It is important to research all of these options and figure out which one works best for you and your financial situation.
If you have any questions at all about education loans, how to get them, and how to pay them back in the U.S., please visit us at www.nomadcredit.com. We’d be happy to help you search and compare options for education loans or study loans, too. Please send us an email at firstname.lastname@example.org if you have any questions! We are happy to help.