How to apply for student loan as an African student in USA
How to Secure a Financial Loan as an African Student Schooling in the USA
Studying in the USA can be a rewarding and life-changing experience for many African students. However, it can also be very expensive and challenging to finance.
According to the Institute of International Education, the average cost of tuition and fees for international students at US universities was $26,820 in 2020-211. This does not include other expenses such as living costs, books, health insurance, and travel.
Fortunately, there are some options available for African students who want to pursue their education in the USA but need financial assistance. One of them is applying for a student loan from a reputable lender that specializes in serving international students.
In this write-up, Honestynewsgh.com will explore what student loans are, how they work, and how you can apply for one as an African student.
What are student loans?
Student loans are a type of financial aid that allows you to borrow money from a lender to pay for your education. Unlike scholarships or grants, student loans have to be repaid with interest over a period of time after you graduate or leave school.
The amount of money you can borrow, the interest rate, the repayment terms, and the eligibility criteria vary depending on the lender and the type of loan.
Types of Student loans
There are two main types of student loans:
1. Federal loans are funded by the US government and are available only to US citizens and eligible non-citizens (such as permanent residents or refugees).
2. Private loans are offered by banks, credit unions, or other financial institutions and are open to anyone who meets their requirements.
As an African student, you will not be eligible for federal loans unless you have a US citizen or permanent resident as a co-signer (someone who agrees to repay the loan if you fail to do so). However, you may be able to apply for private loans from lenders that cater to international students.
These lenders usually do not require a co-signer or collateral (something of value that you pledge as security for the loan) and base their decisions on your academic potential and future income.
How do student loans work?
Student loans work by providing you with funds that you can use to pay for your tuition, fees, and other educational expenses. You will receive a loan agreement that outlines the terms and conditions of your loan, such as the amount, the interest rate, the repayment schedule, and the consequences of defaulting (failing to repay).
Typically, you will not have to start repaying your loan until after you graduate or drop below half-time enrollment. However, some lenders may require you to make interest-only payments while you are still in school. This can help reduce the total cost of your loan by preventing interest from accumulating.
Again the repayment period of your loan depends on your lender and your loan type. It can range from 5 to 25 years or more. During this time, you will have to make monthly payments that cover both the principal (the original amount borrowed) and the interest (the cost of borrowing). The amount of your monthly payment will depend on several factors, such as:
1. The total amount borrowed
2. The interest rate
3. The repayment term
4. The repayment plan
The repayment plan is the way you choose to repay your loan. There are different types of repayment plans that offer different benefits and drawbacks. Some common repayment plans are:
Standard repayment plan: You pay a fixed amount every month until your loan is paid off. This plan usually has the shortest repayment term and the lowest total interest cost.
Graduated repayment plan: You pay a lower amount at first and then increase your payment every two years until your loan is paid off. This plan may suit you if you expect your income to grow over time.
Extended repayment plan: You pay a fixed or graduated amount over a longer repayment term (up to 25 years). This plan may lower your monthly payment but increase your total interest cost.
Income-based repayment plan: You pay a percentage of your discretionary income (the difference between your income and 150% of the poverty level) every month until your loan is paid off or forgiven after 20 or 25 years. This plan may reduce your monthly payment but increase your total interest cost. It may also qualify you for loan forgiveness if you work in certain public service jobs.
You can choose the repayment plan that best suits your financial situation and goals. You can also change your repayment plan at any time with your lender’s approval.
However, keep in mind that changing your repayment plan may affect your interest rate, monthly payment, total interest cost, and repayment term.
How can you apply for a student loan as an African student?
Applying for a student loan as an African student can be a complex and lengthy process. However, if you follow CONTINUE