The great student loan repayment problem...


...and how we help graduates living abroad reduce their monthly pain.

By Sandy @ Wise

Let me tell you a little story: Chris recently graduated from university back home in the USA. He’s since been working hard to pay off his student loan (aren’t we all!) to the American creditors, but little did he know what hard work it’d be to actually make international payments to the US.

As it turned out, Chris had to make four payments every month via friends and family, just to pay back his loan...

Four payments to make a payment.

What? Well, Chris lives and works in Estonia, which shouldn’t pose a problem in this day and age, but apparently it does. Here’s why:

  • US creditors typically only accept US bank account payments.
  • Overseas wire transfer payments are, of course, deceptively expensive.
  • PayPal can’t really help - it’s against their policy to send money to yourself, and the fees to receive money are huge.

Chris found a way around it though. Or more like four ways. This is what he used to do:

  1. Payment from his Estonian bank account to his European PayPal account
  2. Currency transfer from his PayPal account to a trusted family member's US bank account
  3. Payment from trusted family member's US bank account to Chris's US bank account
  4. Payment from his US bank account to US student loan creditor

That’s right, four payments to make a payment. Chris emailed us and shared his rage!

“My payments were always late, I had to rely on other people and that is not even mentioning the % charge that PayPal takes.”

This is the kind of craziness we hear about all the time, when customers tell us about the various ways they used to beat the system before they found Wise.

Meet Cecile

International transfers between banks are a real hassle and very expensive as well, which is very problematic when you have to pay off a loan every month such as student debt.

A fellow graduate, Cecile, faced a similarly ludicrous situation, between her native France and her new home Britain - “If I want to transfer some money from France to UK it's €30 per transfer which is very expensive - especially if you don't want to transfer a lot of money”. It is indeed, but that’s before you’ve taken into account the hidden exchange rate fee, which can run up to 5% of the amount you’re repaying. This basically allows the banks to make even more profit from people paying off their student loans internationally.

I found that Transferwise was so easy, quick and didn't steal from me with the currency conversion which banks tends to do.

A little revolution called Wise

There was a time when Chris and Cecile literally had no other option than going through the banks to pay off their student loans. And now? Well, not so much. I’ll let Chris do the talking:

Wise is pretty much what one would call a "God Send" to the financial realm of recently graduated expat students with loans to pay off while living abroad.

Well, Chris, we're happy to help. Clearly paying off your degree shouldn't be half as complicated as actually getting your degree in the first please. It’s one thing to pay off your student loan, but paying banks and other overly complex institutions just to do so?

We think not.

By Sandy @ Wise

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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