So, you’ve decided to take the leap and study abroad - that’s great!

If you’re using a student loan to pay for your international studies, it’s crucial to understand how to pay it off responsibly. 

Student loans can feel overwhelming, but they're an investment in your future. Yes, costs have gone up, but so have the opportunities. Many graduates find their education pays off not just in salary, but through the connections they make and doors that open along the way. Even when it takes time to land that perfect job, the skills and network you've built make the wait worthwhile.

For international students, there are extra hoops to jump through with visas and work permits, but the landscape is getting better. More countries are extending post-graduation work opportunities because they want to keep talented graduates who contribute to the economy and fill labor gaps. Success stories are everywhere—international students landing great jobs, starting businesses, and building meaningful careers. 

With some planning and the right support, what feels overwhelming today becomes completely manageable tomorrow. Passage lightens the burden for international students by providing affordable tuition financing and an easy online application process.

Passage helps connect international students with Canadian job opportunities, making it a great resource if you're thinking about studying in Canada. The platform bridges the gap between what students bring to the table and what Canadian employers need.

Passage also helps students understand how much they could earn abroad based on their skill set. 

Take the first step to studying abroad in Canada by using Passage’s eligibility checker tool.

Understanding your student loan debt

There are four main types of student loans: federal student loans, private student loans, subsidized student loans, and unsubsidized student loans.

Federal student loans:

These types of loans are funded by the government of a country, typically to citizens or permanent residents of that country. Although these loans often offer generous loan forgiveness programs and a lower interest rate, they usually aren’t an option for international students looking to study abroad.

Private student loans:

Private financial institutions such as banks, credit unions, online lenders, or specialized loan companies offer these types of loans. International students most commonly use private student loans to study abroad in countries such as Canada. To qualify for a private student loan, the financial institution will look at your credit history, income, or a cosigner’s credit report.

Choosing the right student loan repayment plan

There are many repayment options for student loans. Just as important as understanding how to take out the right loan, it’s important to know how to repay it.

Here are a few key things to look for in a student loan repayment plan:

Grace period: This is the time after you leave school (or drop below half-time enrollment) when you are not required to start your monthly payments yet. This is great for students because it gives them time to find a steady income before chipping away at their loan amount.

Prepayment options: Paying off part (or all) of your loan before the scheduled due dates can save you money in the long run. Early lump sum payments, extra monthly payments, or biweekly payments can all help you pay off the total amount quicker and with less interest.

Currency options: It’s important to understand what currency your loan is in because fluctuations in exchange rates and conversion fees could affect your student loan payments. Passage loans are paid back in Canadian dollars, which helps students build a credit score.

Loan term: This is the total number of months or years you agree to pay off the loan. A longer loan term means a smaller monthly payment, but it also means that you’ll pay more in interest.

Student loan interest rate: Interest rates are essentially a percentage of what lenders charge you for borrowing money from them. Interest is often charged monthly on the remaining loan balance. Passage offers students a fixed interest of 11.95% on their student loans, unlike other lenders, who raise interest rates over time.

Additional payments: Additional payments are any extra payments you make on your loan amount outside of your scheduled payments. This is a great way to save on interest and finish your loan faster. Make sure you specify that you want to make these payments on the principal balance and not the interest.

Understanding these terms and what they are in your loan repayment plan will give you the confidence to repay student loans successfully.

Strategies to pay off student loans faster

Understanding how to pay off your student loan faster is essential. It can reduce the total interest you pay, boost your credit score, and free up your income for other goals.

Here are some strategies to pay off your student loans faster!

1. Making more than the minimum monthly payments: During those months when you have a little extra money (tax refunds, work bonuses, gifts, or side hustle earnings), pay more than your minimum monthly payment amount! Even just paying an extra CAD$25 or CAD$50 a month can add up in the long term.‍
2. Making biweekly payments instead of monthly payments: Did you know that if you make biweekly payments instead of monthly payments, you make one full extra payment per year? Divide your monthly payment in half and pay that amount every two weeks. By the end of the year, you will have made 26 half-payments instead of 12 monthly payments without cutting into your monthly budget too much.‍
3. Make payments during the grace period: If you can start paying off your loan during the grace period, take advantage! During a grace period, you are not required to make monthly payments. However, making payments during this time of no interest is strategic for reducing the length of your loan.‍
4. Round up your payments: It may not seem like much, but paying a little extra every month can help you pay off the loan faster. For example, if your monthly payments are CAD$375, consider rounding the number up to CAD$400 if you have the extra money in your budget. This is a great way to budget more money towards your monthly loan amount and a simple way to pay it off quickly.‍
5. Take advantage of employer benefits: Some employers offer student loan repayment assistance as part of their benefits package. It's worth asking HR about available programs, even if it's not widely advertised.
6. Consider refinancing or consolidation: If you have good credit, refinancing to a lower interest rate could save you thousands. Just be careful with federal loans—you might lose certain protections and forgiveness options.
7. Setting up autopay and staying organized: Autopay is a type of preauthorized debit (PAD) that prevents you from missing a monthly payment and getting hit with late fees. It’s also an easy way to manage your monthly spending budget. If the money automatically comes out of your account at the beginning of each month, you won’t be tempted to spend it on other things. Borrowers who use automatic payments tend to have higher credit scores because they make consistent, on-time payments. One of the most important factors in good credit is on-time payments, and autopay ensures fewer chances for error.

Should you use a personal loan to pay off student loans?

It can be tempting to take out a personal loan to pay off student loans, especially if you’re having trouble paying them back on time.

However, we would advise you to take caution!

To start, many student loans have a lower interest rate than private personal loans. Paying off a loan with another higher-interest-rate loan will mean you end up paying more in the long run.

Personal loans also have no special protections such as grace periods, deferment or forbearance, or flexible repayment plans. You will lose all of these benefits from your student loans once you convert them into a personal loan.

Many personal loans also have shorter repayment periods. This means you could find yourself with higher monthly payments, which could strain your budget, especially early in your career.

Tools to help you pay off student loans

There are many online platforms that can help you pay off your education loans.

Passage is a platform built to connect international students with top education programs that fill job market shortages and provide financing for their education. 

Here’s how Passage can help you pay off student loans:

1. Transparent application process

Passage helps students avoid hidden fees and unexpected payments from the very start by providing them with a fixed interest rate of 11.95% and a clear application process. 

2. No pre-payment penalty

With Passage, you’re free to repay your loan early, without any extra fees. We’ll guide you through building a smart repayment plan, show you how to make additional payments when you can, and help you understand which strategies could reduce your total cost over time.

3. Realistic earnings insight

Before even taking out a student loan, Passage helps international students understand their expected salaries based on their career and location. 

Here’s how to apply for a loan with Passage:

1. Check eligibility and get program recommendation using the eligibility checker tool. You will get a breakdown of the loan payment and cash collateral requirements on the result page if you are eligible.

2. You can click on "Apply now" to create your application. Otherwise, you can use the Passage Loan Calculator and select the program that you are eligible for to get complete loan details.

2. Once you select your program, you’ll see the estimated living and tuition costs. You will also see if this program makes you eligible for a post-graduation work permit. 

3. Based on these estimated fees, select whether you would like to apply for a tuition-only loan or a tuition and living costs loan. 

4. Based on your selection, our tool will tell you what you need to pay upfront and what you will be expected to pay monthly. 

5. Once you’re ready, click the “Apply Now” button to begin the application process. You will be prompted to select whether you already have admission into this program or not. If you have not been admitted into this program yet, you can apply directly from the Passage website. 

Passage guides you step-by-step through the admission and loan application process, keeping all of your documents in one simple location! 

FAQS

What is student loan forgiveness?

This typically applies to federal loans and is when all or part of the student loan is canceled by either the government or an employer.

What is a standard repayment?

Standard repayment plans require equal monthly payments over a set period. They are predictable and help students pay off their loans quickly.

Should I use my tax refunds to pay off my student loans?

This is a great strategy to help pay off your student loans! You can apply the refund directly to the borrowed amount to accelerate your payoff timeline.

How can I set up automatic payments from my bank account to pay my student loan?

To set up autopay, log in to your loan provider’s website and locate the “autopay” or “direct debit” options. You’ll be prompted to enter your bank account information and choose a monthly payment date.

What does refinance a loan mean?

Refinancing a loan refers to trading in your current loan for a better one. Your new loan pays off your old loan, and you begin making payments on the new loan’s terms. Many do this to find loans with lower interest rates, reduced monthly payments, or different repayment terms.

Can I use a credit card to pay off student loans?

No, you typically cannot use a credit card to pay off student loans. Some people find workarounds by using third-party payment processors, but this is a risky move that could cause you to end up paying more in service fees.