More Thoughts on Loans

While I wait to hear back on a loan application, I decided to do a quick comparison of several international student loan alternatives that I may have to consider in a few weeks – HSBC, IEFC, Paras/Isloan. While actual terms may vary, if the average terms listed on IEFC's website are applied to a £50,000 loan (assuming a US cosigner), the IEFC-Wachovia loan appears to be the most attractive. I believe that with the exception of US$500-1000 in fees, the Paras has very similar terms so I did not include it separately in my table below. In comparison to the HSBC loan scheme available through London Business School (don't need a cosigner), the Wachovia loan appears to be just slightly less favorable.

Despite these similarities, I believe the IEFC-Wachovia has one distinct advantage over HSBC/Paras – it supposedly only takes 24-48 hours to get an application processed. I was told this over the phone and in comparison to the 4–8 weeks it takes HSBC/Paras to process an application, this is light years faster and more convenient. Furthermore, while IEFC’s website doesn’t explicitly state this, I was told that the US$45,000 max is an annual maximum and that they are willing to provide a letter for student visa purposes stating that the loan will be renewed for up to the same amount assuming the borrower/co-signer’s debt profile doesn’t change significantly. This quick timeline can be very important for those accepted in later admission rounds, for procrastinators, and for those that may have their initial loan applications denied.

Disclaimer: I’m inexperienced with evaluating loan offers – I simply used MS Excel’s FV and PMT functions – so above numbers may not be accurate. Additionally, while I have tried to provide accurate information, only the loan companies can tell you what their official policies are.