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How international students like you can get a loan that covers more than tuition

Prodigy Finance - June 17, 2019

How international students like you can get a loan that covers more than tuition


An international master’s degree costs much more than tuition - and that alone is a sizeable investment into your future.

The total Cost of Attendance (CoA) includes everything you need to complete your degree, including a place to live, food, transportation, books and - if you’re an international student - mandatory medical insurance. 

CoA definition

And, the CoA provided by your university isn’t necessarily the same as your budget as Smith Shah discovered when organising his finances for his MS in Industrial Engineering at Texas A&M University in the US. In fact, the difference amounted to an additional $7000 based on his expectations and intended lifestyle in the States. 

Why you need a loan that covers more than tuition

If you’re already deep into budgeting for your international degree, you already know that putting together your budget isn’t as easy as taking the CoA your school gives you and breaking it into sub-categories.

Like, Smith, you’ll probably need a little more than the CoA and you should take into account that:

  1. It’s difficult to be precise about your expenses, especially if you’ve never lived in your host country before. You can do all the research you like, but life - and your new classmates - will throw unexpected opportunities your way and you won’t want to miss out.
  2. Getting a visa requires you to prove you can account for every expense. If you can only demonstrate you can meet the minimum, you may not be granted that all important visa, whether it’s an F-1 for the US, or a study visa for any other country.

Prakash Singh, a 2018 MBA graduate from The Marriott School of Business at Brigham Young University in the US, used his Prodigy Loan Letter (also known as a Sanction Letter in some countries) to provide proof of funding to his university. Later he presented it again to US Immigration and Naturalization Service (USICS) when applying for his F-1 study visa.

“In the visa interview, I was asked to explain how I am going to cover my tuition and daily expenses. I explained to them the options I had with photocopies of Prodigy Finance's Loan Letter and other supporting documents and they were satisfied with that.”

Why don’t all lenders offer loans to cover more than tuition?

International master’s students like Smith sometimes struggle to find the right loan for their education. You might fall into one of these groups:

Can get a loan, but it’s not enough to cover CoA. 

In some countries, international education loans are available - but only cover tuition or the CoA of a local university. Taking one could rule you out for additional funding elsewhere.

Can get a loan, but the interest rate is too high to consider. 

Whether you take a loan in your home or host country, there are just some places and circumstances that whose interest rates make it nearly impossible to repay.

Can get a loan, but can’t transfer that amount out of the country.

There are countries which prohibit or highly tax large sums leaving the country. Your loan might not cover your expenses after paying taxes and transfer costs. 

Can get a loan that covers CoA, but only if you find more collateral. 

In countries with banks that demand collateral, you often need to back up your loan with assets far greater than the tuition costs, let alone the CoA.

Smith found himself in the third group before applying for a Prodigy Finance loan. Although he would have taken a loan with higher interest rates, he wasn’t keen to cripple his financial future before setting foot on campus.

And, it “meant the world” to secure the funds he needed to complete his first year at Texas A&M University. He also secured provisional funding for his second year.

Prakash also looked into local loans. He found one that would have covered almost the same amount as his Prodigy Finance loan, but it didn’t offer the same benefits.

“The other option I had was the education loans from regional banks. However, I would have had to convert those amounts to USD which would have been an added loss in terms of exchange rates. So, Prodigy Finance was definitely the best option.”

He even considered waiting to pursue his studies if Prodigy Finance wasn’t able to assist. 

Can international students get a loan that covers more than tuition?

Yes! But, you may need to look further afield than your local bank.

Smith accepted a Prodigy Finance loan because:

  • He could secure a loan up to the amount of his school’s CoA.
  • He secured better interest rates than he could anywhere else.
  • He didn’t need to put up any collateral or co-signer. (You never need those for a Prodigy Finance loan.)
  • He won’t face any prepayment penalties if he decides to pay off his loan sooner.

Prakash made a decision on his lender based on the same criteria and because, personally, it allowed him time to focus on what really mattered.

Pranay Agarwal also looked at all of his options and took a Prodigy Finance loan because it offered the lowest interest rate. He also made payments during his grace period (which, with Prodigy Finance, is a complete payment holiday, and does not require you to make any repayment during this time).

Many students, like Misha Raina, struggle to finalise loan contracts with local banks - even when they’re prepared to put up all the collateral a bank requires. She’s taken a Prodigy Finance loan to get her MBA in the US.

Before making a decision on any loan, it’s important to do your research on what’s available to you. And, this may mean reaching out to a number of banks, other financial institutions and international student loan providers like Prodigy Finance. The more data to consider, the more likely you are to find the right loan for your needs.

 

Want to know more about international student loan repayments?

Whether you need the full funds or you want to save on the amount of interest you’ll pay, you can join us for a webinar with a Prodigy Finance borrower who also had questions about the process - and the platform - and is now totally happy to answer yours. 


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