The number of international students attending universities in the U.S. has hit record highs. According to The Wall Street Journal, nearly 5% of all people in college in 2015 were international students.
But if you plan on studying in the U.S., finding a way to pay for your education can be difficult. Often, you might not qualify for federal aid, and many private loan lenders only issue loans to U.S. citizens or permanent residents. That might leave you scrambling to find the money you need for school.
That’s where MPower Financing comes in. As one of the few lenders to offer loans to international students, you could get help with financing. But it’s not for everyone.
This MPower Financing review will help you understand the benefits and drawbacks so that you can make an informed decision.
MPower Financing review: The basics
MPower Financing issues loans to international and domestic students in the last two years of their education who display career and academic potential. Deferred Action for Childhood Arrivals (DACA) students are also eligible.
Although freshmen and sophomores won’t be able to take advantage of these student loans, juniors and seniors in college and graduate students can.
MPower Financing disburses loans to students in over 190 countries. You can borrow between $2,001 and $50,000. The lender will review your credit report when it looks at your application but, thankfully, you don’t need to have a cosigner to qualify for a loan.
MPower Financing student loans have fixed APRs. That means that your interest rate will stay the same throughout the length of your loan. APRs range from 7.99% to 13.99%, but there are three ways to reduce your APR:
- Automatic payment discount: Sign up for automatic payments, and you’ll get a 0.50% reduction.
- On-time payment discount: Once you sign up for automatic payments, you’ll get an additional 0.50% discount when you make six on-time payments.
- Graduation and employment discount: Once you graduate and are employed, you’ll receive another 0.50% discount.
Your loan can be used for all education expenses, including costs such as health insurance and transportation.
While you’re in school and for six months after graduation, MPower Financing requires you to make interest-only payments. You start making payments within 45 days of the loan disbursal date. You can make payments from a U.S.-based bank account; your home country bank through Flywire; or over the phone with Firstmark, the loan servicer for MPower Financing.
What we like about MPower Financing
MPower Financing is one of the few lenders willing to work with international students and DACA students, so it’s a useful option for those studying in the U.S. who don’t have many other options.
One of the best features we found for this MPower Financing review is the potential interest rate discounts. They’re extremely valuable. If you qualify for all three, you can reduce your APR by 1.50%. If that doesn’t sound too impressive, look at the math.
Pretend you borrowed $50,000 and qualified for a 10-year loan with an APR of 7.99%. Over the length of your loan, you’d repay a total of $72,765. Thanks to the rate, you’d pay over $22,000 in interest charges.
By contrast, if you qualified for the three discounts and reduced your APR to 6.49%, you’d repay a total of just $68,098 over 10 years. Because of the discount, you’d save over $4,500.
What to keep in mind about MPower Financing
Although MPower Financing student loans might be useful for some people, there are two significant drawbacks to consider.
1. High interest rates
MPower Financing student loans cater to a niche market, so it offers much higher interest rates than federal loans. If you’re eligible for federal aid, it’s a good idea to exhaust your federal loan options before looking at private loans.
International and DACA students don’t usually qualify for federal student loans, so that’s not an option for them. But it’s a good idea to compare offers from multiple private loan lenders before submitting your application to ensure you’re getting the best rate and that you don’t overpay for your education.
2. Hard credit pull
With MPower Financing, there’s no way to get a rate quote without submitting your application. When you do so, the lender does a hard credit pull, which can affect your credit score. A lower score could affect your ability to get other forms of credit, including other student loans.
Are Mpower Financing student loans right for you?
If you don’t qualify for federal aid, you’re in the last two years of your education, and you’re studying in the U.S., MPower Financing student loans can help you get the money you need to complete your degree.
But make sure you exhaust all your other options first and evaluate several different lenders. If you need help getting a loan, check out this article on everything you need to know about international student loans.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.23% – 13.23%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 10.11%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|