Simple Tips to Save Money on Student loan Interest( 12% ).

Did you know, International students can ‘Save BIG’ money by following the tips in this article. There are so many students who are still not sure how much student loan to get approval and how to save money in student loan interest. As far I know, students are paying around 12-13% Interest rate on student loan. But, if you utilize that money in proper way, you could save few thousands on the interest payments.

I followed the steps I’m going to outlined here and saved loads of money in interest payments on student loan. Lets assume you have student loan approved for $40,000 for 2 years of education.

First Year Fee:

$20,000 ( $6,000 per semester tuition fee ).So for first semester after getting student visa, you can carry

$6000 + $4000 = $10,000

$3,500 will include cost to buy a laptop( $850 - $900), and living expense for 5-6 months.

Money Saving Part:

1) For first semester when you come to U.S, for the first time, don’t carry entire 1 year fees with you. Because, after paying $6000 for first semester, remaining $14,000 will be with you in Checking Account that will not earn any interests.

2) Carry only $10,000 with you, that will save ~$1,200 in interest.

3) After you reach university, open an bank account and deposit the Demand Draft or Travelers Check. Check here if you want to know how to carry U.S. Dollars.

4) Pay the first semester tuition fee $6000 and you will be left with $4,000.

5) Spend some $500 to $900 to get Lenovo Thinkpad laptop ( Why I recommend Lenovo Thinkpad laptop? )

6) You will be left with $3,100.

7) Open an Online Savings Account with HSBC Direct and deposit $2000

HSBC Direct Savings Account will pay 3.00% and above Interest. So, your effective interest rate for the student loan for the time you have in Savings Account will be reduced to 12% - 3.00%= 9.00%

9) When in need transfer to money from Online HSBC Savings account to you personal checking account for easy access.

10) At the end of the semester, you can ask your family to send the money for next semester tuition fee.

Students typically bring money for one full year and after paying first semestre fee, some $10,000 or more will be in Checking Account. In U.S. Banks usuaylly Checking account will not pay any interest. So, youi are paying interest for the student loan in India while your money is at some bank in U.S. without making any interest.

right now interest rate in HSBC savings account in 3.50%. Holding $10,000 for 1 month will earn around $30 per month. There by reducing your interest rate.

How to Access the Money from HSBC ( or other similar Accounts) for Emergency:

Online Savings Account is same as Regular Bank account. You will have access to cash anytime through ATM Withdrawal or you can transfer the money to your existing bank account. Following details are from HSBC Bank Site on How to Transfer, Access the money, …

How to make $100 or more per month and pay for living expenses

Majority of the visitors who come to this blog are students. Everyone one wants admission with scholarship ( GRE scores varying from 800 - 1500 ). But, not all students get admission to universities with scholarship. U.S. Universities have strict admission guidelines to give scholarship to students.

Next option students attending different universities look for is part time jobs that would solve their monthly expenses. Even $50 to $100 extra income per month to a student is very helpful. I have been in that situation and I know what if you don’t have scholarship and part time job. every penny as income looks like a distant dream. You have to cut back on your expenses, live in dreams.

But, what if I say there is a way for you to make few dollars per day when you attend the universities. You have that potential to make that money. all it takes is 10 to 15 minutes per day. If you want to know more about making few extra income, check back tomorrow. I will write an detailed article with the steps you need to do.

That was yesterday and I’m completing the details today. Have you ever wondered, how I make few dollars from this blog? You could see ads displayed by Google and those ads are content targeted. If I write about GRE, you can see ads about GRE Exam, Online GRE practice test and so on. If I write about scholarship, you will see ads related to Scholarships. So, how can you get paid, its simple, when readers clicks on the ad’s you will get paid. It’s that Simple!

If you have ever wondered how you can make few dollars to few hundred dollars per day, and not sure what to write, continue reading. If you look at my posts, its basically my experience. I remembered the stuffs I did for university application, student visa and I’m writing my experience. But, some information I have to ask current students, since I graduated in 2005.

that gives you better chances to write up to date contents. Yes, that’s right. All, you need to do is the following steps

1) Register a blog and I recommend Blogger.com ( It’s from Google)

2) Select any templates that you like from list of templates listed when you create the blog.

3) This step that will make you rich everyday. Sign-up for Google Adsense

4) Spend 5 to 10 minutes everyday writing what you did about the graduate school application process. It can be any simple task, you can write about which Orkut you signed up, how did you write your SOP, which university you plan to apply, or you can provide links to articles in this blog, any simple task you do, write in the blog.

5) You will spend some 4 months preparing for GRE and TEOFL, 3 months to apply for universities, 2-3 months waiting to get admission, and about 2 months to short list universities, then comes visa process and then packing to your dream travel and so on. So, approximately more than 1 year will be spent and that’s 365 articles already. I have some 120 articles so far and see how many visitors I have.

6) Then if you wonder how people will know about your blog, its simple. Send the link to your friends, exactly same way Happy Schools is getting visitors. Students share information when they find it useful. Post it in Orkut community and student will come to your site, when they come you get paid. Because Google pays even for ads displayed ( eCPM). For every 1000 times ads is displayed in your page, you get paid.

7) Even if you make $1 per day, its equal to 1 McDonald’s Sandwich. Think how much you could make. All it takes is less than 10 minutes of your time to write your experience.

I’m going to write another blog on how to set up Adsense, how to market your blog, where to place your ads in the webpage, so you will get more money. If you wonder if you can make money with Adsense, I’m the example before you. Go ahead and get started.

Who else wants to know about student loan?

Student Loan, if you are planning to get from your native country, continue reading, I’m about to uncover some real facts. Is it better to get student loan from my country or from U.S. based bank? … Keep reading for the answer.

About 64% of International students in 2005/2006 who came to study in U.S. use their Personal and Family funds for covering the cost of education. That includes both Graduates and Under Graduate study. But, I assume, it will be some form of Student loan will be used to fund the education cost. Most of the students fund their education in U.S. from student loan.

Student Loan will be usually issued in the form on Bank Draft in the name of the University and separate bank draft in the name of the student for personal living expenses.

Considering the the scenarios where there is no financial aid or Scholarship, only with part time job, at the end of course, there will be around $20,000 in student loan. But, the good news is, its worth every cent spent from the student loan. Usually, entry level jobs will pay anywhere from $50,000 to $80,000 per year,

Now, lets assume that after graduation, you will be still left with student loan of around $20K and that’s usual in U.S. I have seen people who have much more in student loan debt. There are so many options available here to repay the loan. But, International students loan will have different payment options.

In general living expenses will increase after you graduate. It will be difficult to share room with 4 people in job going environment. When number of people to share the cost with decreases, monthly living expenses will also increase. I was paying around $1,100 per month in Florida and around $1,300 per month North Carolina.

Here are few tips to pay off the student loan much faster:

* Watch where your spending goes, categorize them and cut miscellaneous expenses

* Avoid spending in luxury items

* Make a list when you go to grocery shop and stick to the list when you buy items.

( Trust me, when you drive to get a can of Milk, you will end up spending $30)

* Participate in companies 401(k) retirement savings plan.

* Save atleast 5% of every pay check for emergency

Above tips would help to save money and that can be used to repay student loan.

Suppose you get $3000 after tax in hand, at max you will spend $1,500 per month for living and saving $150 will give you $1350 to pay student loan. With this calculation student loan can be paid off in 14 months. But wait, you will definitely need to buy a car to commute, unless you are in Metro’s. If you buy car for $20,000, monthly payment will be around $350 for 5 years. That will delay student loan repayment. But the scenario is different if you earn $80K per year,

<p style=”float:left”><!–adsense#SmallRect–></p>I have heard about students getting loan from U.S. based banks for lower rates, but I’m not sure how feasible that will be. I haven’t explored those options. But considering the visa process, getting student loan from native country will be the best choice.

If you want to avoid student loan, here are few interesting tips to get scholarship. Here’s a way to get scholarship

 

Cost of Graduate Education in U.S.

I have few emails asking me to write about how much would it cost to study in U.S. I know many of my friends decided not to study in U.S. considering that factor “Money” they would have to invest to study in U.S.At the same time I have seen people who sold everything they had back home just to get education from U.S.

So, the perspective usually varies. But, I would say its really worth every penny one would spend on graduate school programs. I’m going to write about the basic necessities and how much it would cost to stay and study in America.

Cost of living usually varies between different states in America and also varies between city where the graduate school is located. I will give you an estimate on places where you mght leave for comparison. So, location is the major factor.

If the Graduate school is located say in Kingsville, Texas you would spend around $300 per month including all expense, whereas in New York or Los Angeles it might be around $800 per month. Without part time job or aid it will be difficult to manage in major cities

Elements for Basic Living:

Apartment ( on campus or off campus )
Groceries and food
Utilities ( Power, water, gas, internet)
Phone ( land line or cell phone)
Books ( used college books )
Personal Care

Others:

Dinning out
Travel Vacation
Car, Car insurance
Starbucks Coffee
Buying Gadgets
Cable TV Connection

Considering all the above factors, I have seen students live for $200 to $1000+ per month.

If you live in Texas, $200 will be sufficient for very restricted life style of living, I have seen students who had that kind of life style. But, I wouldn’t live that way.

I spent around $300 to $400 per month on basic expenses and others expenses add to it based on your lifestyle.

Apartment rental is the major cost in living expenses if you live in Major city. If you read my previous Guest Speaker post, where apartment rent around UC Davis is $1600 per month for 3 bed room apartment.

Whereas in UTA we paid $600 per month for 2 bed/1.5 bath. How many people stay in the apartment? That usually varies. In 1 bed/ 1 bath I have seen 2 to 5 people stay. Usually 3 is common.

In 2 bed/2 bath = 4 to 8 people stay. And this depends on city and how strict the apartment rules are.

Groceries cost are almost standard and it will be shared by all your roommates, so it will not be a major expenses, unless you dine out daily.

Phone = $10 to $50 per month

Utilities ( Gas, water, power ) = $100 - $200 per month

Cost that will be put as living expenses in I-20 is more and that usually dosen’t apply to International students who share the apartments and food expenses. They use dorm expenses to calculate the living expenses. Dorm are usually expensive.

Hope this will give an idea of how much your living would cost.

Carnival of Debt Management #21

I’m happy to see that my post Students spending habits.. Timeline is listed for second time on Carnival of Debt Management #21. If you wonder what is Blog Carnival, I got the description from Wiki and it saysThe Blog Carnival is a type of blog event. It is similar to a magazine, in that it is dedicated to a particular topic, and is published on a regular schedule, often weekly or monthly. Each edition of a blog carnival is in the form of a blog article that contains links to other blog articles on the particular topic.

Same post Students spending habits.. Timeline is getting listed in Blog Carnival for the second time. Previous listing was in Carnival of College and Finance.

Cheap International Student Health Insurance

I wrote about Student Health Insurance, How health insurance works, Travel Insurance. I did an analysis of how ICICI Student Insurance works, with its advantages and dis-advantages. I was browsing to find if there is an better alternative and cheap student insurance for International students and I found health insurance along with other benefits offered by International Students Organization based in New York.

International Students Organization, offers COMPASS Plans underwritten by AIG and ISO MED Plans underwritten by ACE USA.

COMPASS Plans, includes Gold, Silver and Bronze plans ( Plan Details )

ISO MED Plans includes Med Prestige, Med 1 and Med 2 plans ( Plan Details)

To compare plans using the following link ( Compare )

They also provide education tools on how to buy student insurance, dental plans options.

Carnival of College and Finance

I’m happy to see my post Students Spending Habits .. Timeline listed in first Carnival of College and Finance. I found several interesting articles in there. One that caught my eyes was Intro to Financial Series: My Early Credit Blunders, from Plainadvice.com.

It will be an eye opener for students who are planning to apply for credit cards and how to use it wisely.

This was my first ever submission to an Carnival and it got listed along with other good articles for students. Hope you all enjoy reading the other posts about Credit Cards, finance, Admission Tips and many other useful info.

Students spending habits.. Timeline

I started thinking about how I spent money after starting coming to U.S. and thought it would apply for most of the students. It was quite amazing, when I think about how the spending habits changes over time. first 3 months at school, I was spending $250 per month including rent, groceries,.. but over period of 3 years, I could see dramatic change. Having credit card in hand changes perspective on money in negative way.  Here’s the time line on how spending habits change over time in U.S.

First 3 Weeks in U.S

Mind calculator will be always at work. Any time you see some product will be multiplied by Rs.50.( India) Yes, it was Rs 48.50 per $ when I came to U.S. First week, I went to Walmart and total bill was around $48 for 2 weeks of groceries.

Second time I went my roommates and it was around $100 and used to wonder, Rs 5,000 would we get so many stuffs that would be useful for more than a month. If you don’t have part-time job, financial aid or scholarship, then for first few months you will hold yourself back from spending. So, average monthly spending for first 2-3 months will be at very minimum.

After 2-3 months

You will have SSN and a student credit card with some $1000 credit limit and slowly the mindset will get adapted to U.S. Dollar value. We won’t feel the pain of paying the credit card until statement comes. Till then anything we buy is free, because the money virtual. We don’t get to see the money. It’s in bank account, we pay using credit card, and when statement comes, money from bank account is transferred to Credit Card account.

Credit cards will be used in all places, many small purchases charged to the card will add up to big sum. Usually, it’s $3 at McDonalds, $5 at Taco Bell, $7 for movie kind of things will add to huge amount. You will be surprised to see how you had spend when the statement comes. You will wonder, if I have a small part time job for 10 hours in a week that would give me some $200 - $300 to pay my groceries and part of living expenses. That’s the phase, when every student will feel the value of money. Exhausting the bank balance money (student loan, parents income, ..)

After 1st semester

Now, you should have found a job( part time, or financial aid, research assistansship). Unless you control yourself with the excitement of getting a new job, your first pay check will be already spent before you realize.

Its very simple, for many months, you will be living within budget, controlling your spending. After, you get a job, first thing will be happy relaxed feeling. You will put some mental calculation, on ho much you will earn per week, per month, for 6 months. All long awaited dreams of having a nice digital camera, at least weekly once buffet at Indian Restaurant, Ipod, … will come into mental picture. Next thing you know would be

Buy Cell Phone ( now a days, its becoming essential)

• Ipod and Iphone
• Dine out in restaurant daily
• Visit deals2buy and edealinfo daily looking for new gadgets
• New pair of shoes every month
• Subscription to Netflix
• Buy X-box or Wii
• Flat Screen TV sharing the cost with roommates
• List never ends

So, that would be your first pay check money already spent.

Now having used to little lavish life style, it will be little difficult to go back to other life style. Next step would be to apply for new credit card, and what would happen at the end? Big balance in the credit cards, lots of balance transfers will go on…

How to avoid student credit debt and some nice ways to keep students finances under control, will be in next post.

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.

Guide to handle transactions between friends/roommates

For atleast 2-4 years in U.S. we will have to share the bills, including utilities, apartment, groceries, and some money lending activities will be going on.

We were 7 guys staying and pretty lazy in calculating monthly expenses. We usually do once in 2-3 months. Most of them do it every month.

Sometimes, we had a folder, so any bills that are paid, will be put in that with the name of the person who paid the bill and every 2 months, someone will do the math and manually, decide who has to pay and how much.

We, used to go to Walmart once in every 3 weeks and bill will be very huge. It will take atleast 45 minutes to bill all the items we buy. So, the best time for use to go to Walmart is around 1 AM. So, there wont be any rush and long queues at the bill register. We used to get groceries for around $300 every 3 weeks.

Responsibility’s was usually, split. One will take car of Power, water, Internet and cable connections. Also, this to make sure, everyone has something to manage and you might need address proof in form of some bills.

Later, I came across Buxfer, a tool to manage money transactions between friends, roommates.
It looked pretty cool. You can pen down all the transactions, and if you set it up with number of roommates, it does the math for you. Try it out!

What to look when applying for credit card?

There are few things that you have to consider when applying for credit cards.

* Student Credit Cards
* Does that card have 0% Introductory APR for atleast 6months?
* Does the card have annual fees?
* What is the APR after introductory APR period?

Usually, all the credit cards will have at least 6 months free of interest ( i.e. 0% APR). After, that they would have mentioned under Terms and Conditions. Don’t apply for any card that has APR greater than 13%. If you don’t pay your bills by due date, you will be paying 13% interest, which is too much.

Also, check for Annual Fee. Some cars will have annual fee of $75 or more. So, find a card that doesn’t have annual fee.

Make sure you don’t accept any other offers that come with that card, like credit protections plans. They will charge you extra $7 to $15 for using that service. Usually, first month will be free, and it will be charged from second month. So, make sure you say no them it, as and when they give the offer. At times you will get phone call marketing to accept the offer.

Applying for student Credit Card - 2

This post is continuation of previous post Applying for student credit card -1. It will be new concept for students who are still in India and for those of you who are already here, must have come across the terms, credit history, balance transfer and many other credit related terms.

Steps to build good history:

1) Open a new Bank Account ( Checking and if possible Savings account too)

2) Apply for Social Security Number.

3) After you have SSN, apply for Student Credit Card(s)

4) Use your credit card for daily purchase

5) Pay your bills on time ( pay in full )

6) Check your Credit Report atleast once in a year.

7) Watch your credit history and credit score ( 350 to 850) grow.

Applying for Credit Cards:

There are many banks that offer student credit cards, that will help student to build credit history. Student credit cards will have low credit limits. Credit Limit varies from $300 to $2000 for student card.

I applied for MBNA, American Express Blue for Student card and got it approved. Those were my first 2 cards. You might want to check out Visa or Master Card website, since some banks will offer cards specifically for university (Something like Arizona State University Master Card ). There are good chances that you will get your credit application approved, if your university has one. Even if its an Alumni Association card.

Some of popular students cards are , MBNA ( now its Bank of America), American Express Blue for Student, Citi Students Cards, Chase Students Card. Usually, seniors don’t suggest to apply for Discover cars, until you have good credit history. Don’t apply for too many cards. First apply for 1 and see the outcome. If you get it approved, use it for 6 months, build your credit history, ask for credit line increase.

Using Your Credit Cards:
If you want to build the credit history, you need to use your credit cards for paying bills, grocery store purchase, .. and make sure you pay the bills before the statement due date, without interest. Your credit score will improve every month. It will take atleast 6 months to have decent credit history.

I will break this credit card process and building credit history into few more posts. So, it wont be too lengthy and boring to read.

As I was writing this article, I got an idea to write few ideas on personal finance for students. That would include, budgeting, online software for students to calculate monthly transactions and few tips and tricks to earn money through bank accounts.

Till then use your credit wisely.

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