If you’re trying to pay down debt, there are always basic debt repayment strategies you can use. You can fine-tune your budget, create a payoff plan, and maybe even refinance for a lower interest rate.
Or, you could step outside your comfort zone and do something extreme: Move overseas.
All debt and little income
Sarah Li-Cain didn’t realize what was in store for her when she moved to Australia with her now ex-boyfriend. During her time there, she racked up $9,000 in credit card debt.
When things didn’t work out, she headed back home to Canada and searched for ways to get out of debt. The problem was, she couldn’t find a solid job.
“I had a few minimum wage jobs but desperately wanted to keep traveling,” said Li-Cain, founder of HighFivingDollars.com and author of “The Authentic Budget.” She also wanted to pay off her debt in a reasonable timeframe.
With a degree in education, it didn’t help that teaching jobs were scarce.
“I had friends who were still struggling to get jobs despite years of substitute teaching,” explained Li-Cain.
An overseas opportunity
With what seemed like perfect timing, Li-Cain heard about a teaching job in South Korea.
“I thought this was an easy way to build my career, travel, and pay off debt,” Li-Cain recalled. She didn’t have to think twice before taking it.
The teaching contract Li-Cain signed was key for helping her with her debt situation. It included housing and she received a monthly stipend to pay for electricity and water. Li-Cain also lived across the street from the school, so there was no costly commute.
With a bare-bones budget, Li-Cain was able to pay off her credit card debt in less than a year.
Free from the burden of debt, she left South Korea when her contract ended and moved to China for eight years to teach at a British school. Li-Cain eventually moved back to the U.S. and settled in Jacksonville, Florida. She doesn’t plan to stop traveling, but she’s now doing it without compromising her financial situation.
“I stopped making the same mistakes I did before, like emotional spending,” Li-Cain explained. She also works hard to seek happiness through mental and physical health, rather than through money.
Living like a local
Li-Cain isn’t alone in thinking that moving to a different country can help pay down debt faster. Matthew Massee, an SEO specialist for law firm Utah Advocates, spent time in Guangzhou, China, to pay off his student loans.
“I earned a low salary by U.S. standards,” Massee said. “But in China, I had an extremely comfortable salary.” Plus, his work contract covered his rent and, with government subsidies, his monthly utility bill came to less than $20.
The other part of Massee’s plan was to give up some of the things he enjoyed so he could live like the people around him.
“I switched to soy milk and pork instead of milk and beef, tea instead of coffee, and local vegetables instead of avocados,” Massee said. It helped that the rural area in which he lived had no English speakers.
“I was able to easily save over 70 percent of my monthly income,” he added. With that, he paid off his $12,000 student loan balance in about 13 months.
Massee is back in the U.S. now and has no debt. His experience in China has helped him to strive for a modest, happy life. “Seeing global poverty firsthand, every day, shifted my perspective greatly,” said Massee.
3 ways to get out of debt while overseas
Li-Cain and Massee found perfect opportunities to help them reach their goals. But if you need help getting out of debt, simply moving abroad may not be enough. Here are three things you’ll need to do while you’re overseas.
1. Get organized before you go
Even if your main goal for moving abroad is to pay down debt, the excitement of living in a new place can make it hard to remember your obligations back home.
Contact your lenders and give them your international address and phone number. Ask if they’ll take payments from an international account. If not, make sure you already know how you’re going to get cash from your bank account overseas to your account in the U.S.
Some banks with a global presence, such as HSBC and Citibank, may even have branches in the country to which you’re moving.
2. Set up automatic payments
Depending on where you go, internet access may be spotty. You may also run into other troubles like having your laptop stolen, or there’s no local bank branch from which you can send money.
Setting your debt payments to auto-pilot can help with this. You can determine the amount that gets paid automatically every month.
For example, you can set it to the minimum payment in case something happens and you can’t send money. Or, you can set the automatic payment higher to keep you and your budget accountable.
The important thing is that your process is fail-safe.
3. Avoid inflating your lifestyle
Many countries have a lower cost of living than that of the United States. So, it may be tempting when you move abroad to change your lifestyle to enjoy more luxuries.
“You can definitely do a lot of amazing things cheaply,” explained Li-Cain. “Like eat out every night, get weekly massages, hire a cleaner and cook, and still have money left over.” But, she cautioned, that can add up fast. Li-Cain recommends sticking to local shops and restaurants, as well as cooking at home often.
Even if you can manage to pay down debt with an inflated lifestyle, it will still take longer to reach your goal of being debt-free.
To avoid this, create a budget to live by during your time abroad. Keep track of your income and expenses, and prioritize debt payoff. If your work contract offers allowances for certain living expenses, use the money you would have spent to pay down your debt.
Is moving abroad right for you?
If you’re considering taking a job overseas as one of your ways to get out of debt, make sure you think things through. With a lower cost of living and a job that potentially covers some living expenses, you can have the help getting out of debt that you need.
But there are also things you’ll need to plan and research. For example, what visa requirements are there? Do you need a job before you leave or can you find one after you get there?
Most importantly, make sure you find the right job. Doing something you don’t enjoy will likely be just as frustrating in a different country as it would be at home.
If you decide to take the plunge because heading overseas is the best option for you, keep your goal in mind and focus on paying down your debt as quickly as possible. After that, you’ll have the freedom to live the way you want.
Note: Since the initial publication of this report on June 28, 2017, Sarah Li-Cain has written content for Student Loan Hero. She was not a contributor when this article was first posted.
Interested in refinancing student loans?Here are the top 8 lenders of 2020!
|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 3.20% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.89% 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 December 13, 2019, 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 12/13/2019. 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 email@example.com, or call 888-601-2801 for more information on our student 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 SoFi.
3 Important Disclosures for Figure.
Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.
4 Important Disclosures for College Ave.
College Ave Disclosures
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.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 1/1/2020. Variable interest rates may increase after consummation.
5 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
6 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.
7 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 1.76% effective November 10, 2019.
8 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 12/019/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
|1.99% – 6.89%1||Undergrad & Graduate|
|2.31% – 7.36%2||Undergrad & Graduate|
|2.06% – 6.81%3||Undergrad & Graduate|
|2.62% – 6.12%4||Undergrad & Graduate|
|2.29% – 6.65%5||Undergrad & Graduate|
|1.99% – 7.06%6||Undergrad & Graduate|
|1.85% – 6.13%7||Undergrad & Graduate|
|1.90% – 8.59%8||Undergrad & Graduate|