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How to refinance your international student loan and save money

Prodigy Finance - June 19, 2019

How to refinance an international student loan and save plenty of money

Congratulations! Not only have you completed your international degree, but you managed to fund your studies in the first place.

It’s a big accomplishment.

And, if you’re wondering how you can save money on student loans now that you’ve graduated, you’re setting yourself up to succeed in the next stage of your life too. 

How to save money on the total cost of your student loan

The best way to save money on student loans is to pay as much as you can, as often as you can, and as early as you can. By paying more than the minimum monthly payment — whether it’s once or repeatedly — you can pay down your loan quicker. This could save you thousands in interest charges over the life of the loan.

When you refinance a loan, you’re accepting a new loan to pay off the existing one. And, because you’ll have completed your degree and accepted a job offer, you’ll usually qualify for better interest rates. Those reduced rates equal big savings.

With refinancing, you also have the opportunity to change your loan repayment term, paying it off over a shorter period which may also save on the interest you’ll pay. 

2 tips for saving money on student loans with early or extra payments

  • If you were lucky enough to get a signing bonus that covers more than it costs you to get set up in your post-graduation life, putting it towards your international student loans will make an immediate dent in the overall cost of your loans.
  • Receive a raise or holiday bonus due to your hard work? Consider putting the extra income towards your loan. 

Both of these methods will reduce the amount of interest paid over the life of the loan, as well as your principal balance, thereby lowering the overall cost of your loan and giving you an opportunity to finish repaying your loan earlier.

Be sure to check that your loan allows for early repayment. Many do, but not all offer this option. Prodigy Finance loans never have fees or penalties for early repayment.

If accelerated payments isn’t an option, you may be looking for other ways to save on the cost of your student loans. Perhaps you want to know how to save money on your monthly student loan payments.

How to save money on your monthly student loan payments

Now that you’ve got your degree and a great job (or you’re about to get both), you may qualify for a lower interest rate. Taking the steps to reduce your interest rate could lower your monthly payments and free up that extra cash for other necessities.

So, how do you lower your student loan interest rate? The answer lies in refinancing your education loan.

Refinancing your student loan allows you to save money on your loan, even if you can’t afford to make extra lump-sum or monthly payments. But you’ll save even more if you refinance your international student loan and you make extra payments.

Top 3 benefits of refinancing your student loan:

  • You can save you money on the total cost of your loan.
  • You can reduce the cost of your monthly payments.
  • You can choose your repayment term (such as 10, 15 or 20 years).

As a bonus, refinancing loans from your home currency into the one you’re earning now can save time and money spent on currency conversion and transfer fees. 

How it works: 4 steps to refinance your international student loan

When you refinance a student loan, you accept a new loan to pay off your existing loan (or loans). Here’s what that process looks like:

  1. You have an existing loan you would like to improve in some way — whether that’s rate, lower monthly payment, or the amount of time to pay off the loan.

  2. You find a lender with better loan terms, and you apply for the new loan.

  3. The new loan pays off the existing debt completely.

  4. You make payments on the new loan until you pay it off or have another opportunity to refinance it.

2 reasons to refinance your international student loan

1. Refinancing can save you money on student loan interest

A new loan means new rates, and because you’ve changed your financial profile for the better that can mean lower rates. You’ll be spending less of your hard-earned money on your education loan - every month and overall.

2. Refinancing can help you can build credit in the US

Refinancing your loan will help you build credit in your new country. No matter how long you’re planning to stay, your credit score and history matters in the US.

By looking into refinancing, you’re simply giving yourself the freedom to make an informed decision about your finances now and in the future. 

Of course, there are several other benefits when you refinance your loan, such as:

  • Choosing a new loan provider
  • Consolidating multiple student loans
  • Releasing your cosigners

Want to learn more about refinancing benefits? Jump to this section.

How to improve your credit with a student loan refinance

Getting a degree and taking full-time employment are positive improvements to your credit profile. The better your profile, the better the rate lenders can offer.

And, lower interest rates equal lower loan costs.

Not only that, on-time repayment of your international student loan will help establish a great credit profile should the opportunity arise for you to remain in the US permanently. 

3 important questions about international student loan refinancing

What kind of student loans can be refinanced?

In principle, you can refinance any private student loan, in any currency, from just about any loan provider.

But, not every lender is willing to assist with any loan. Many banks and financial institutions don’t have the capacity to refinance loans in another currency from another country. Prodigy Finance has piloted one of the few international refinance programmes. 

In the US, federal loans can be consolidated, not refinanced. While there is significant overlap, these are not the same, as you can see here.

When should you refinance student loans? 

You can start investigating refinancing as soon as you have an active student loan, though most students begin looking at their options a few months before graduation so they know which one to accept before repayments begin.

Of course, you can refinance your student loan at just about any point before it’s fully repaid. You might be prompted by an increase in interest rates or a pinch in your budget. Most people with student loans choose to refinance them when they’ve seen a change in their financial profile — whether that’s a master’s degree or a new job.

The point is that it’s never too late and hardly ever too early. 

Who should refinance their student loans?

If you have a private student loan and you’ve graduated, you should look into refinancing. That’s true for all working graduates — international or otherwise.

Student loans are usually large sums of money and any time you can save on the total cost, it simply makes financial sense to do so. Refinancing cuts your interest rate (among other benefits), putting the savings back into your pocket. 

Want to learn more about the benefits of refinancing? Jump to this section.

What is education loan consolidation? 

Education loan consolidation combines multiple education loans into a single loan so you can make a single payment. It’s done when you accept a new loan and the lender pays off all your existing loans, offering some convenience on the admin side.

The process is the same for refinancing. You take a new loan while the provider pays off your existing education loans.

While student loan consolidation and refinance are different, the process is relatively the same. It can be confusing, so let’s break it down:



Can you combine loans?



Does it allow you to make one monthly payment?



Can it be used for US federal student loans?



Can it be used for private student loans?



Can it be used for international student loans ?


when Prodigy Finance launches

As you can see, consolidation (as it’s known in US financial aid circles) only applies to students with US federal student loans, which is how the majority of American citizens and permanent residents fund their education. (This is why student loan consolidation information is aimed at domestic students.)

Refinancing, on the other hand, still allows you to consolidate private student loans. And there is another, incredible, benefit that comes with refinancing that you can’t get with consolidation:



Is it possible to get a lower interest rate?



That’s right, when you refinance student loans (rather than simply consolidating them), you may benefit from the option of a lower interest rate on your international student loans.

With refinancing, you might save as much as $20,000 or more on the total cost of your student loan, depending on how you refinance your loans. 

Can I consolidate international student loans?

US citizens and permanent residents can consolidate their student loans, but they’re also able to refinance them through a variety of lenders if they want to reduce their interest rates.

By refinancing your education loans, you’ll be automatically consolidating them - and enjoying the additional benefits as well.

Why most student loan providers do not refinance international education loans

The same banks offering refinancing to locals usually can’t provide refinancing to international graduates. It’s not that they don’t want to; it’s that their hands are tied. They can only offer loan terms as long as the stamp in your visa - and most student loans require more time to repay than most visas offer.

Your intention may be to stay, you may have even applied for your green card already, but banks need the proof before they can extend loan and refinancing offers. That, along with your limited credit history, makes it challenging for traditional financial institutions to extend loan or refinancing offers. 

Can international students refinance student loans?

Yes! But, keep in mind that most US-based banks are bound to the stamp in your passport. If you’re on the OPT extension of your F-1 visa or on an H-1B visa, there is a time limitation based on visa expiry. That’s why you won’t find many local providers offering refinancing to international graduates working in the US.

The good news? International lenders like Prodigy Finance want to help regardless of your visa status.

Which lenders refinance international student loans?

As an international graduate living and working in the US or the UK, you’ll need to look at companies like Prodigy Finance that have structures in place to work with international students and have the capacity to work with graduates living and working outside their home country. You’ll get all the benefits of refinancing whatever visa you’re on. 

How to apply for international student loan refinancing

It’s worthwhile for anyone with private student loans to investigate refinancing. It simply never hurts to know how much you could save, whether you want to reduce your loan term or just your interest rate. Luckily, joining the Prodigy Finance waitlist for international student loan refinancing is super easy.

How to restructure your loan terms when refinancing your student loans

You'll have the opportunity to structure your refinance in the way that best matches your budget.

  • If you want to pay off your student loan debt as fast as possible, you can opt for the shortest possible loan term. This will also save you the most amount of money off the total cost of your loan.
  • If you prefer to make the lowest monthly payments while you build your career from the ground up, you can choose a longer loan term.
  • If you keep your loan term or monthly payments the same, you’ll still save with those lower interest rates.

Here’s a look at how different loan structures impact your student loan:

Ready to start your future off on the right foot?

If you’re considering refinancing your international student loan and looking for an international lender, sign up to our waitlist.

Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority.

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