Saturday, January 9, 2016

Things To Know When Taking International Student Loan

In this post I am going to tell you about the international student loan and the entire process for you to understand.

What is an International Student Loan?
Central student loans are very accepted with native students in US, but they aren’t accessible to international students. Instead, they are entitled for international student loans, dedicated private education loans made available to international students who come to study in the US.

These loans are a practical way to fund your education in the US. Loans are incredibly flexible, and can proffer adequate amounts amount to pay for your full education, but with absolute repayment terms and practical interest rates, so you can reimburse after graduation.

All international students who want to apply for loans must have a US co-signer in the first place. A co-signer is officially compelled to refund the loan if the borrower fails to pay. The co-signer must be a permanent US dweller with fine credit that has been in US for the last two years. The co-signer can be a close friend/relative who can help in getting credit.

Interest is the sum charged by the lender in addition to the money you borrowed. The interest is calculated on the basis of an index (Prime Rate or LIBOR Rate ) plus a margin that adds an extra percentage interest rate depending on the creditworthiness of co-signer. Prime Interest Rate is is determined by the federal funds rate and is set by the US Federal Reserve. The LIBOR’s (London Interbank Offered Rate) base is British Bankers’ Association and used on the London interbank market. When evaluating the loan, it is clarified which index will be used. Then, there will be an extra margin added which is based on the borrower’s individual criteria. Based on their creditworthiness, an added interest rate will also be added to the index. This is the total interest you owe. Once your application is accepted, your precise margin will be revealed to you, after which you can accept or refuse the loan.

Repayment will differ upon on the loan option you select. Since most international students cannot work while they study, reimbursement has to be regarded as extremely important. You will need to calculate how much to pay monthly, when they begin, and how long you can reschedule repayments. The reimbursement period normally ranges from 10-25 years, but the bigger the loan, the longer the period. The standard repayment plan options are:

  • Full Deferral – Students can defer payment until 6 months after graduation provided the permanent status is maintained. Payments can be deferred for a maximum period of four years.
  • Interest Only – International students simply pay the interest while in school, up to four successive years, and can postpone the principal until forty five days after graduation, or when the student alters the course load to part-time.
  • Immediate Repayment – Payments on both principal and interest are payable at once after the loan amount has been dispersed.

No comments:

Post a Comment