How to Save Money on International Student Loan

Did you know that international students can ‘Save BIG’ money by following the tips in this article? There are so many students who are still not sure how much student loan will get approved and how to save money in student loan interest.

As far I know, students are paying around 12-13% interest rates on student loans. But if you utilize that money in a proper way, you could save a few thousands on your interest payments.

I have actually followed the steps I’m going to outline here and was able to save loads of money in interest payments on my student loan. Let’s assume you have a student loan approved for $40,000 for 2 years of education.

First Year Tuition Fee

• $20,000 ($6,000 per semester tuition fee). So, for first semester after getting student visa, you can carry
• $6,000 + $4,000 = $10,000
• $3,500 will include cost to buy a laptop ($650 – $900), and living expense for 5-6 months.

Money Saving Part

You can save lots of money by following the steps listed below. There isn’t any miracle or hidden tricks to save money on student loan interest. Just follow the steps listed below.

1) For your very first semester here in the U.S.,  don’t carry the entire 1 year fee with you. This is because after paying $6,000 for the first semester, the remaining $4,000 will be with you in a checking account which doesn’t pay any interest.

2) Carry only $10,000 with you, that will save you ~$1,200 in interest.

3) After you reached your university, open a bank account and deposit your Demand Draft (DD) or Traveler’s Check. Read this if you want to know more on how to carry U.S. Dollars.

4) Pay the first semester tuition fee of $6,000 and you will be left with $4,000.

5) Spend some $500 to $900 to get a Lenovo Thinkpad laptop. (Why I recommend Lenovo Thinkpad laptop?)

6) You will be left with $3,100.

7) Open an online savings account with HSBC Direct and deposit $2,000.

8) An HSBC direct savings account will pay about 2.00% to 5.00% in interest. So your effective interest rate for your student loan for the time you have in your savings account will be reduced to 12% – 3.00% = 9.00%.

Savings account interest rates vary, so check with the bank for the current rate.

9) When in need, you just transfer money from your HSBC online savings account to your personal checking account.

10) At the end of the semester, you can ask your family to send the money for the next semester’s tuition fee.

Students typically bring money for one full year and after paying the first semester tuition fee, around $10,000 or more will be left in the checking account. Usually, checking accounts do not pay any interest.

So in essence, you are paying interest for your student loan in India while your money is at some bank in the U.S. without earning any interest.

Right now the interest rate in an HSBC savings account is at 2.50%. Holding $10,000 for 1 month will earn you around $25 per month. Over a period of 2 years, you can save lots of money.

How to Access the Money from HSBC

An online savings account is the same as a regular bank account. You will have access to cash anytime through ATM withdrawal or you can transfer the money to your existing bank account.

The following details are from the HSBC Bank Site on “How to Transfer, Access the money, …”