Remember the hustle you put into your international masters applications? Then there was the rush of your time abroad; all those deadlines, assignments, networking events, and recruitment activities.
Finally, you can breathe a sigh of relief, right?
Well, yes, sort of. It should be the same sort of exhale you made when you received your admit and set about finding the financing, or when you finally sorted that and had to move on to your next challenge.
Now, it’s time to get to work on paying off your student loan.
There’s no trick here, but there are tips you can use to save a whole lot of money off the total cost of your loan and repay it early as well.
How to pay off your international student loans early (and save a lot of money at the same time)
There are a few ways to reduce the overall cost of your international student loan which, in turn, reduces the length of time you’re dealing with repayments. Ideally, you’ll use more than one method to save the most time and money.
Make extra payments
Did you get a signing bonus when you accepted employment? How about an annual performance bonus? Any substantial amount of income you have is best put towards your debt.
Sure, it would be great to buy a fancier car or upgrade your wardrobe, but making an extra payment towards your international student loan will win every time.
Why it works: Depending on your loan provider, some proportion of your extra payment will go towards your principal, reducing the interest calculated on your account for the next (and every subsequent) month.
Pay more than the minimum
Always, always, always pay more than the minimum due monthly if there’s any possible way to do so. Even if you up your payment by a few bucks a month, you’re still doing yourself a service.
And, the more you can afford, the deeper the dent. Take a look at your monthly budget; there’s bound to a little space for you to pay more than the monthly minimums.
Why it works: This is the same as making extra payments; it’s just that you’re doing it repeatedly in smaller increments. Ideally, you’d combine this with repayment tip with at least one other for maximum savings.
Refinance your international student loan
This a big saver and something you can do as soon as you’re employed after graduation. Essentially, this involves taking out a new loan with better interest rates to pay off your current international student loan. With refinancing, you can actually reduce your monthly payment if you stick with the current loan duration.
But if you’re interested in paying off your international student loan faster, you can take a shorter loan term with payments that still fit into your budget. With refinancing you could save tens of thousands of dollars on your international student loan.
Why it works: Because you have your degree and full-time employment, lenders have tangible evidence of the positive changes you’ve made to your credit profile and can extend better interest rates which translate into massive savings.
Look for the small charges
Everything from forex to conversion fees add up over time. And, it seems silly not to research all the options when it comes to repaying your loan. (Ideally that money would actually go to your loan, not another service provider, right?)
And, there are new money transfer platforms that specialise in these types of transactions; find them and use them. Or, better still, refinance your loan in the currency you’re earning and eliminate them entirely.
Why it works: Any money saved is a bonus. If you use those savings to up your minimum monthly payments, you’ll get into the principal sooner and pay off your loan faster.
Refinancing your international student loan
If you’re living in working in the country you studied in, for example the US or the UK, you’ll find a lot of information and refinancing offers. In the US, refinancing is so normal that some people count on it when they take out their initial loans.
But, as an international graduate, you won’t have as many options as your domestic counterparts. That’s because banks work with the visa in your passport. If you’re working on an OPT extension of your F-1 visa or you already have your H-1B visa, there’s a maximum time you’re allowed in the country. That doesn’t mean you can’t extend your time by securing additional visas, but banks are going to use current information.
You’ll need to turn your attention to companies like Prodigy Finance who offer international student loan refinancing to international graduates like yourself. You can choose your repayment terms and monthly minimums to suit your budget and release your co-signer without worrying about what visa you’re on. Plus, you’ll be building your local credit profile.
Now, you’re closer than you realise to that sigh of relief and, more importantly, getting onto what you wanted to achieve after your degree.
Interested in refinancing your international student loan?
Prodigy Finance is here to help you save big on your loan. Pay it off early and save off the total cost of your loan while doing so. There’s no obligation, a free application and you can see how much you’ll reduce the total cost of your loan in minutes.
Author Bio: Rishabh Goel is Country Manager for India at Prodigy Finance. He studied Economics & Engineering at BITS and did his Masters in Management at London Business School. He has helped Indians excel at GMAT/GRE and mentored students to attend top schools globally.