Studying Abroad: Use credit cards or take a personal loan?
Studying at an overseas university is a life-changing experience, albeit at a hefty cost. We compare the perks of personal loans against credit cards’ and find the better funder for tuition fees and living expenses.
Whether it is undergraduate studies or further pursuits for professional purposes, studying abroad is exhilarating in more ways than one. Ask any of your peers who have done it and they’ll likely regale anecdotes of how great an opportunity it is to travel the continent, and also to practise independence in its highest form. In case you aren’t aware, independence is just a nicer way of saying they can party like rock stars without parental supervision.
On a serious note, the decision to study abroad could stem from the fact that local universities don’t offer a particular course. Either that or parents want their kids’ resume to reflect a brand name institution. Going out of your comfort zone to get a better education and adapt to a whole new world sounds really fun, until it isn’t. You’d quickly learn that lesson when the reality of high tuition fees and overseas living costs smacks you hard in the face. To get our point across, we’re going to list out what you’ll be paying across three different destinations parents love shipping their kids off to: Australia, the United Kingdom and the United States.
|Tuition (per academic year)||AU$15,000 – AU$33,000 for a bachelor degree||£10,000 – £35,000 for lecture-based courses||US$24,930 – US$33,480 depending on whether you want to enroll in a public sector college or top-tier private universities|
|Accommodation||AU$70 – AU$400 per week||About £8,034 per academic year for students who wish to study in London.||US10,440 – US$11,890|
|Living expenses||At least AU$300 per week||About £7,146 per academic year in London.||US$3,950 – US$4,520|
|TOTAL||Average of AU$42,093 per year (about S$44,978)||At least £22,000 per year (about S$38,326)||US$39,890 – US$49,320 (about S$55,733 – S$68,908)|
Along the way, you might feel bad about treating your parents like an ATM. So you find a part-time job like any other international students and survive on self-subsistence. But how far can you go beyond offsetting those groceries and drinking sessions with your new friends? Independence is not easy, and you need help.
Enter credit cards and personal loans, to which you have to make another big decision. Which one should you use to finance your semester-by-semester tuition? There are also apartment rental and lifestyle expenses to consider and credit cards may not be as widely accepted as cash. We compare both instruments to find out which provides a better short-term measure.
|The Good||The Bad|
When you put a price on overseas education like that, it is easy to see why it comes across as a financial dilemma that can rival the likes of car ownership and marriage. The ‘cheapest’ overseas destination among the three, the U.K., already costs more than three times of what you’d pay to read business at a local university. All means of payment - from Bank of PapaMama to cash advances - have to be weighed.
For convenience’s sake, you would probably get a brand new credit card from that country’s local bank or a more globally recognised bank. Your benefits on your existing credit card will effectively collect dust, and you need to work your new card from scratch to chalk up rewards points and whatnots. But the really scary part about credit cards here is the interest rate; if you had to fully fund the annual tuition fee at a London university using credit cards, the accruing interest would have been a staggering $4,353 to $15,236 per annum. If you had applied for a 4.5% per annum credit line that is repayable over three years, your first year interest ranges from $784 to $2,743.
That alone is reason enough for us to look into personal loans. To put your bank theft or burglary concerns to rest, just invest some money in a high security GPS-enabled biometric safe.
When you’ve finally decided which overseas university you’re going to sign over the next few years of your life to, study and compare the best low-rate personal loan packages on GoBear!