If one of your passions in life is traveling, don’t let student loan debt stand in your way. Traveling is one of the most amazing experiences you can have, especially if you are lucky enough to take a long-term voyage.
If you’re traveling for more than a month at a time, however, you’ll need to prepare your student loans in advance. These simple steps will help you cover your bases and give you peace of mind that your trip will be without a financial emergency.
6 financial steps to take before traveling abroad
1. Set a realistic travel budget.
Traveling abroad isn’t cheap, so map out your destinations and the cost of getting there in advance. Remember that a fixed budget, such as $50 a day, means different things in different places. It will go a lot farther in, say, Guatemala than in Paris.
Start with up-to-date guidebooks and websites that have specific details on the spots you want to visit. This kind of planning is essential, especially if you want to have a little more flexibility to be spontaneous. Overestimating how much you need is far better than underestimating.
One of our most sage pieces of advice on traveling while keeping your money in mind is to commit to using cash. Going cash-only cuts off the temptation to overspend on credit. It also allows you to see how your money is spent in real time.
You should also look into trip budgeting apps that can help you stay on target. Trail Wallet, for example, allows you to input a daily budget and add expenses as you spend. It then tracks how much you have left per day or trip and warns you when your balance is getting low.
2. Appoint a money manager.
Whenever you’re traveling (but especially to places with unfamiliar languages), appointing a trusted relative or friend to look after your money while you’re away can be the difference between being able to access your money in an emergency or not.
Call your student loan lender and let them know who is authorized to speak on your behalf. Don’t forget to forward your student loan paperwork to the person for the duration of your time away!
3. Make it automatic.
Set it and forget it — it’s the easiest way to pay. If you have not already set up your automatic bill pay for your student loans, do so as soon as you can. Start early, since many lenders take 30 or even 60 days to process a new automatic account.
The good news is that you may actually lower your student loan payments by doing an automatic payment plan. All you need to do is make a phone call to your lender (see how to reach them here) and provide a bank account they can withdraw from each month.
4. Design your bank accounts for travel.
Having bank accounts that are split between home and travel expenses can be a great way to stay organized.
Consider opening three checking accounts: home (student loans, phone, rent), travel (hotels, airfare, food), and emergency. Place the amount of money you’ll need in each account and carry separate debit cards for each so you’ll know where you’re spending from.
Another way to ensure that your money is safe is to “pay” yourself. Set up automatic money transfers from a general spending account into your travel spend account. This will keep you and your monthly budget on track and guarantee you won’t touch the cash meant for your student loan bill.
5. Back up your funds.
To travel, you’re going to need money. Before you go, you can jumpstart your cash flow by taking on a second job or working a few one-time gigs (check out our list of ways to make extra money).
Save as much extra as you can, because you never know when an emergency might strike. A financial emergency while far from home can lead to overdraft fees, penalties, and more.
When determining how much to save, consider both your situation back home (i.e. your student loan bill monthly payments) and what it would cost to get yourself back from abroad if necessary (plane tickets, hotel, food, etc.). Round up the amount to be safe.
6. Protect yourself at all times.
According to a study by Experian, 20 percent of travelers have had sensitive information stolen while traveling. Staying alert, smart, and aware is your best bet in keeping your money safe, whether it’s your finances back at home or your cash on the road.
Read up on travel alerts in your destination and watch for signs alerting you of high pickpocket areas. Make extra copies of your travel documents (such as your passport and visas) and leave a copy with your money manager.
If you have access to a secure cloud data, save your copies on that instead of carting around extra paperwork. And travel with your money secured to you in a hidden location, such as a money belt or pack.
Student loans and international volunteer programs
If you’re traveling because you are participating in an international volunteer program such as Doctors Without Borders or Peace Corps, you may qualify for a student loan deferment to temporarily postpone payments on your federal student loan.
However, if you plan on continuing to work in a nonprofit post when you return from your Peace Corps service, your better bet may be to apply for an income-driven repayment plan to readjust your payments based on your earnings.
Your payments while in service may be as low as $0 per month. In the future, you can use those income-driven repayments as part of your 120 required payments to qualify for public student loan forgiveness.
Traveling with debt
Your travel plans shouldn’t be put on the back burner because you’re worried about the logistics of paying your loans. Budgeting in advance for both your trip, your bills, and potential emergencies will keep you safe.
Setting up a secure system that works for you and your money manager will mean little potential for missed payments or overdraft mistakes. With diligent planning and foresight, you can leave the country knowing that your student loans are taken care of and your finances are secure.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|