At the end of 36 months, with a fixed monthly loan payment of $ USD, you will have paid off $6, USD in interest. If you pay off the remaining principal balance of $16, USD, you will not have to make any more payments.
But if you continue on your current schedule, you will pay an additional $7, USD in interest as you pay off those $ USD increments!
In three years, you will have paid back $26, USD on your $20,000 USD student loan. For many people, that's a worthwhile amount to obtain an education in the United States. But in 10 years, you will have paid back $34, USD. That is a significantly higher amount.
One note of caution, though: if a lender is offering a variable interest rate, you will not be able to estimate future payments.
- the benchmark
- the spread
Lenders usually peg the benchmark to an index, such as the London Interbank Offered Rate (LIBOR). Your spread might be 7 percent. In this case, your variable interest rate would be quoted as LIBOR + 7%. The means if LIBOR is 4 percent, then your interest rate is 11 percent-which might not sound bad, compared to a fixed rate of 12 percent. But if LIBOR shoots up to 7 percent, your interest rate will be 14 percent!
On the other hand, a fixed rate means you will always pay the same interest rate, so you will know exactly what your loan payments will be. That's why we recommend a fixed-interest rate loan (which is the only kind of loan we provide).
What Is the Most Important Advice for International Students Seeking Financial Aid?
Maureen: The most important piece of advice is simply to understand what you are agreeing to before you commit to any financial arrangements. Be realistic about your abilities to pay back a loan, and make sure that you do everything possible to earn yourself a scholarship that can save you thousands of dollars.
Although finding financial aid can be a tedious process, it can also reward you with life-altering opportunities. It is important to understand your options as an international student and be sure you understand the terms and conditions to which you are agreeing. This is especially important in a new country, where you might be working with lenders or bankers who do not speak your primary language.
Information is the key to success when it comes to taking out loans as an international student. We hope that some of the information provided here will help you locate financial aid and scholarships so that you can pursue a degree at the college or university of your choice in the United States.
The United States is one of the most desirable destinations for international students. Many of its higher education institutions are considered the best in the world.
The key to understanding loan options is to focus on what your monthly payments will be-in school and after you graduate-and ask yourself if you will be able to afford these payments
According to the Institute of International Education, despite the more recent dip in international student numbers, the recorded number of international students in the U.S. increased from 671,616 in 2008-2009 to 1,094,792 for the school year 2018-2019-an increase of about 63 percent.
One reason that international students enroll in U.S. universities is the advanced level of English that a U.S. degree signals, especially in light of the international labor market demand for English-speaking professionals. Another reason is prestige: For example, U.S. universities produce more Nobel Prize winners than those of any other country!