What is an international student loan?

 All about international student loans-

You should always carefully evaluate how much money you will need to study in the USA. Then you will need to research and apply for scholarships, financial aid from your school, and find money from any other source, including family funds. After exhausting these avenues, most international students still have a funding gap, and that's where Paras Education Services international student loans come.

What is an International Student Loan?

Federal student loans are popular with US students studying in the US, but they are not available to international students. Instead, international students are eligible for international student loans, specialized private education loans available to international students studying in the US.

International Student Loans are now a very realistic way to finance your education in the US. Paras Education Services Loans are very flexible, and can offer loan amounts high enough to pay for your entire education, with extended repayment terms and reasonable interest rates as low as 4% to 7% p.a., so you can afford the repayment after you graduate.

Interest

Interest is the amount charged by the lender in addition to the amount of money that you borrowed. The interest rate is calculated based on an index plus a margin that will add an additional percentage interest rate depending on your co-signer’s creditworthiness. The two most common indexes used for international students 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.

LIBOR – The LIBOR (London Interbank Offered Rate) is based on the British Bankers’ Association and is 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 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. This will be the total interest you owe. 

When your application is approved, your specific margin will be disclosed to you, at which point you can accept or refuse the loan.

Repayment

Repayment will vary depending on the loan option you choose. Since most international students are not able to work while they study in the US, repayment must be considered as an extremely important feature in your loan. You will need to consider how much the monthly payments will be, when payments will begin, and how long you will be able to defer paying back the loan. The repayment period generally ranges from 10-25 years, but the larger the loan, the longer the repayment period. The standard repayment plan options are:

Full Deferral – Students are able to defer payment until 6 months after graduation as long as full-time status is maintained. Students can defer payments for a maximum of four years, which is the typical length of a degree.

Interest Only – International students only pay the interest while in school, up to four consecutive years, and can defer the principal until 45 days after graduation, or when the student drops their course load to part-time.

Immediate Repayment – Payments on both interest and principal are due immediately once the loan has been dispersed.

Paras Education Services

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