Student Loan and saving every bit of it

One of the reader had asked to Student Loans. So, I did some analysis1) How to save on Student Loan Interest
2) When to get the Student Loan( to minimize the interest rate)
3) What about exchange rate

It will be difficult to obtain students loan in U.S. as International Student. They will usually require credit check or someone( relative, friend, who must be citizen or permanent resident) must co-sign for you.

If I’m not wrong, student loan in India will be around 12-13% interest rate.

First first semester, lets assume you borrow $10,000 in total from Student Loan account
Tuition Fee : approx $5000
Living Expenses : $5,000

I’m going to suggest some ways to save few dollars you pay as interest rate. Per month living expense will be around $350 to $700. You will have rest around $4300 in your student free checking account. Student checking account doesn’t pay you interest. Also, savings account will pay around 1% interest rate.

if you have $4000 in Savings Account, per month you will be paid $3.33 per month. Instead, you can deposit $4000 in Online savings account that will pay you around 5.00% per year. Some, online savings account might require SSN. Other idea would be to get CD’s ( Certificate of Deposit). Its similar to Fixed Deposit in India. its available in various terms like 3months, 6 months, 9 months and so.

This is what you can do:Month 1 : Estimate your living expense and have some back up money( ~ 3 months). You can have $1,500 in your checking account. Buy a 3-month CD for $3,500.

Month 4: Take $1,500 from 3 months and buy another CD for $1,500.

How much will this pay you?

CD -1 : 3 months, 5% APY = $38
CD -2 : 3 months, 5% APY = $25

Total Savings = $63

Some little bit here and there you can ear money by effectively manging your money, instead of sitting idle in Checking Account. This will effectively minimize your interest rate that you will pay for Student Loan.

Exchange rate is not under our control. It all depends on how U.S. Economy is performing. Another best way is to borrow only what is needed. Again, if rate goes up we will be at loss. In, either way, using Online Savings Account or CD’s is effective way to save more money.

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• Students Bank Account : Free Checkings account
• Student Loan: How to use the money and save more?
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