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Many students aspiring to pursue education abroad rely heavily on student loans due to the exorbitant costs involved. The financial constraints faced by numerous students and their families often make these loans a necessity. However, acquiring student loans can appear daunting without the requisite information. This article aims to guide you through the most straightforward methods of securing a student loan for overseas studies.
Initially, we will delve into the fundamental aspects of student loans.
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What is the mechanism behind student loans ?
A student loan represents a monetary sum that a borrower (i.e., the student) receives from a lender to support their academic endeavors, with the expectation of repayment along with interest over a specified period.
Moreover, these loans are directly disbursed to the educational institution and are earmarked solely for covering tuition fees, accommodation, and other related expenses.
It is important to note that when repaying student loans:
- The principal amount borrowed directly influences the interest accrued.
- Procrastinating the repayment leads to a higher interest payout.
Despite these factors, repayment structures and interest rates differ across various loan options. For example, federal loans generally feature lower interest rates compared to private loans.
Hence, having a firm grasp of the basic concepts of loans can facilitate the process of obtaining one and navigating through its intricacies.
4 Effortless Approaches to Obtain A Loan for Overseas Studies
#1. Evaluate your financial requirements.
The primary step in securing a student loan is to ascertain the amount you need. To accomplish this, it is imperative to determine the total cost of your education.
The cost of attendance encompasses all expenses associated with attending your chosen educational institution for an academic year. This includes tuition fees, accommodation, meals, transportation, books, and other essentials.
To ascertain the cost of attendance at a specific institution, you can either conduct a search online or visit the institution’s website or contact the student affairs office.
#2. :
Numerous options are available when it comes to selecting sources for student loans, with federal and private loans being the primary categories.
Federal Loans
Federal student loans are provided by the government to assist financially disadvantaged students in pursuing their academic goals. These loans feature competitive interest rates and are not contingent on the borrower’s credit history.
Furthermore, if eligible for a federal loan, you have the flexibility to choose which components of the financial aid package to accept or decline.
Key examples of federal loans include Direct Unsubsidized Loans, Stafford Loans, and PLUS Loans.
Private Loans
Private student loans, offered by financial institutions, typically necessitate:
- A cosigner
- A favorable credit history
Hence, it is advisable to thoroughly explore various options to identify those offering favorable terms, such as lower interest rates. Additionally, consulting with a financial advisor can provide insights into loan options tailored to your financial circumstances.
#3. Develop a robust loan application for overseas education
The application process for student loans varies based on the loan type. While specific details should be obtained directly from the lender due to their unique protocols, there is a general application procedure for federal and private loans.
Applying for Federal Student Loans for overseas studies
To apply for federal financial aid, you must submit the Free Application for Federal Student Aid (FAFSA) annually to request financial assistance.
The federal FAFSA deadline for the 2023–2024 academic year is June 30, 2016. It is advisable to submit your FAFSA well in advance of the deadline to enhance your chances of securing the loan. For optimal eligibility for federal loans, submit your application by January 1 for the upcoming academic year.
Subsequently, you will receive notifications from educational institutions regarding your loan approval. They will curate financial aid packages based on the information provided in your FAFSA. At this juncture, you can decide which components to accept or reject.
Applying for Private Student Loans
Given the multitude of companies offering private student loans, there is no standardized application process. Consequently, you will need to complete distinct application forms for each lending institution.
Private loans typically mandate:
- A cosigner, who possesses a more established credit history (e.g., a parent or guardian), to co-sign the loan. This individual assumes responsibility in case of default, with their credit history influencing the loan approval.
Therefore, if scholarships, grants, and federal aid do not cover your educational expenses, exploring private loans becomes essential.
#4. Scrutinize the terms of the Student loan:
Loan terms encompass the conditions and stipulations associated with borrowing funds for educational purposes. These terms encompass:
- Repayment duration
- Interest rates
- Penalties for default and other relevant conditions
Hence, a meticulous review of loan terms is crucial for informed decision-making.
Understanding Loan Terms
Lenders establish guidelines and conditions when disbursing loans to borrowers, which are delineated in the loan terms. These terms outline the obligations of both the lender and the borrower post-signing the loan agreement.
Reviewing these terms, either independently or with a financial advisor, is essential, as failure to comply may result in penalties, such as late fees if repayments are overdue.
Thoroughly understanding the loan terms aids in selecting the most suitable loan and devising a repayment strategy prior to signing the agreement.
Receiving Your Student Loan Funds
Upon identifying a suitable loan option, you will sign a contract or promissory note, affirming your commitment to repay the loan by the specified deadline.
For federal student loans, the funds are disbursed directly to the educational institution, covering all outstanding charges. Any surplus funds are refunded to you, with the recommendation to utilize them for loan repayment.
Private student loans are typically disbursed directly to the educational institution, mirroring the process for federal loans. Similarly, any excess funds are refunded to you.
At , we recognize that fostering an inclusive global economy hinges on educational opportunities that drive value creation.
Through our partnerships with global education lenders, we facilitate African students in financing their postgraduate studies in the US, Canada, or the UK. Notably, collateral or a cosigner is not mandatory.
Are you an African postgraduate student with promising career prospects? The Edxtra Student Loan Support Service offers expert guidance and assistance to secure student loans from our global lending partners for studying abroad at prestigious universities.
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