International students have long struggled to get their hands on the financing they need for a master’s degree in the US. In some cases, local lenders won’t, or can’t, extend loans to borrowers leaving the country – or at least, not for the amount needed. And getting a US loan almost always requires a local co-signer – a luxury most international students don’t have.
Harvard students have it a little easier; the university makes education loans possible through their employee credit union, essentially acting as that critical co-signer.
Still, if you had difficulties securing financing before your degree, a little apprehension towards refinancing after graduation is perfectly normal. And, you may wonder whether it’s even worth it.
Why should you refinance your international student loan?
Any questions you have regarding the value of refinancing should be put to rest immediately. Refinancing your international student loan saves a whole lot of money off the total cost of your loan.
Refinancing your international student loan with interest rates which reflect your degree and post-graduation employment can save you around $20,000*. And, that’s when you’re holding on to the same repayment duration.
When you opt for shorter loan terms, the savings may take your breath away. Besides the big bite out of your debt burden, therein lies another benefit: the flexibility to choose your loan term.
If you’re in a rush to pay off your international student loan before you return to your home country, launch your startup or just to get moving on your financial future, opting for the shortest possible loan repayment term may further reduce your interest rate, though it will impact your monthly minimum due. You’ll need to make the choice, but you’ll have more flexibility (not to mention more certainty) now that you know what your salary is.
While there are sure to be plenty of other benefits, such as releasing your co-signer and building your local credit profile, these are somewhat dependent on the loan you initially took.
When should you refinance your international student loan?
It’s basically never too early to begin thinking about your refinancing options; there are domestic students who actually consider their refinancing options alongside their initial loans as they know their credit profile paints a better picture after graduation.
But, you really can’t apply for refinancing until you’ve secured post-grad employment. In principle, you could apply as soon as you have a job in hand – even if it’s a few months before graduation. If your future employer already has an H-1B visa application on the table for you, you’ll want to have your finger on the refinancing trigger so you can take quick action when it’s signed and sealed.
When to wait: As long as you have a grace period following the completion of your studies, you may as well wait for your diploma. Depending on your lender, having that degree may positively impact your interest rate.
When to refinance: If you’ve already graduated and gotten a job, even if you’re working in the US on the OPT extension of your F-1 visa, there’s no reason to hesitate. You’ll save more money on the total cost of your loan if you get it (or them, as the case may be) refinanced as early as possible.
Are there refinancing loan options for international graduates?
Of course, wanting to refinance and having the option of refinancing are two different things. Luckily, you have options.
That said, you won’t find lenders around every corner ready to help you with refinancing. And, that’s because of the visa stamped into your passport; it comes with a time limit shorter than most refinancing options. Although it’s impossible to include every visa scenario, your passport probably tells banks that you have three years or less in the country:
- OPT extension of the F-1 visa: 1 year
- H-1B visa: 3 years
- Extension of the initial H-1B visa: 3 years
Of course, you’re able to apply for a Green Card or citizenship at various times, but your intentionwon’t sway the bank away from your current official status. If you’re in a position to refinance your student loan in less than three years, you may find it more beneficial to simply pay off your initial loan within this time.
That’s a stretch for most recent grads, regardless of their degree or paycheck.
There are, however, international lenders, like Prodigy Finance.
Using the cross-border models developed to provide students with education loans, Prodigy Finance is in a unique position to refinance international student loans. You’ll get all the benefits of refinancing, regardless of your visa status, making it easy for you. Finally.
Want to see how much you’ll save by refinancing your international student loan with Prodigy Finance? You can get your commitment-free quote in as little as 10 minutes – without impacting your credit score. Apply now.
Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority. Terms, conditions and eligibility criteria apply.
*Saving is based on a representative variable APR of 6.46%. To see illustrative savings calculation click here.