student loans payment while teaching in other countries

Teaching in other countries is an exciting experience for many. But it has its own challenges when it comes to managing personal finances. For people with existing student loans, it becomes even more challenging. But at the same time, it shouldn’t restrain yourself from pursuing your dream job.

 

Your loans don’t get written off when you relocate to other foreign countries anyway. Also, when you are overseas you will find that you may probably be one of the millions of people with student loans. Some proper planning and strategies will help you to reduce your student loan amount to 0. 

 

If you are already paying your student loan, every month you would want to make sure you don’t fall behind during the relocation process. Or if you are planning to start repaying your loans after you move, you need to plan way ahead before you get your passport stamped.

 

Either way, it’s a tough balancing act between your work life and personal financial planning. 

 

At the time of writing this, international travel is not advisable due to the pandemic situation and we do not have any clear answers about travel yet. But let’s hope for a bright future after COVID-19 and see how can we plan about clearing off student loans while staying abroad.

 

Let’s take the example of a teaching job. You are offered a teacher’s job overseas and you are planning to shift. Will student loans be written off when people shift overseas? How can you repay your loan efficiently? This article will tell you all the details.

 

Will Student Loans Be Written Off When People Shift Overseas?

student loan writing off

The answer is no. You will still have to pay your student loans regularly. And if you don’t, you will have to pay penalties along with your fixed monthly payments which will be a heavy burden on you.

 

So how can you pay your student loans efficiently while teaching in other countries? Let’s get into the nitty-gritty without wasting time.

 

Proper Planning Before Relocating

Planning before relocating

Among the many things you prioritize before moving abroad, you need to plan and analyze your financial situation as well in detail.

 

Firstly, you need to select a repayment plan which offers lesser interest rates and lower payments. There are many different payment options available such as PAYE (Pay As You Earn), standard, graduated, extended repayment plans, and many more. You may want to choose the right tenure and amount matching with your salary and expenses abroad.

 

If you are not happy with your current banker, you have every freedom to choose a competitor that offers lower interest rates.  So, communicate with your existing bank about their interest rates, compare with other banks, and change if necessary. 

 

When you are offered a job abroad, the employer may tell you to open a local bank account. But is that bank account convenient for you and the loan provider to transact? If not, try to open an international bank account that is convenient for you and your loan lender for easier transactions.

 

It will also be worth checking on the auto-payment option before moving.

 

Once you decide on the bank and finish all the necessary paperwork, you should also ensure to update your contact details with them for effective communication.

 

Make Money By Selling Unwanted Things At Home

selling unwanted items before going abroad

Now it’s time to start saving every penny.

 

When talking about selling unnecessary things at home and earning money, that’s some motivation, isn’t it? Yes, you can do it.

 

When you are in the middle of a move, you will find that you have a lot of unnecessary items accumulated at home that you want to dispose of. They can be anything from paperclips to clothing.

 

They can be sold either through a garage sale or online platforms like Facebook. Listing out the items in the Facebook groups is a good idea because chances of getting potential customers within or outside your community will be a lot higher.

 

An effective way of selling is to list out the number of items you want to sell with a price and picture and try to present it in such a way that people find them attractive. Instead of selling a single item, you may want to cluster 2-3 items together and style them to make them in order to make them look striking.

 

Here’s another wonderful trick to make some quick bucks by selling – save the packaging. For example, if you want to sell your shoes faster, you need to give them a fresh look. If you can clean up your shoes and pack them beautifully, it can be sold faster. Selling the shoes without the packaging gives an impression to people that they are being used.

 

But, do keep in mind the pricing of the used items will usually be one-third of the original price.

 

Though you won’t be able to pay off your entire student loan by selling the unused items at home, it will partly help to ease your financial needs. 

 

Remember the saying, “little drops make the mighty ocean.”

 

Live On A Shoestring Budget

shoestring budget to pay loans

There will be many things that can tempt people and whip out their wallets when they land in a foreign country. Metropolitan city life, skyscrapers, expensive restaurants, and huge shopping malls are some of the many attractions that can catch people’s attention. But those who are with student loans will have to try to bite the bullet and live in order to meet their financial needs.

 

Living on a strict budget means compromising on your social activities and forget the dining outs and buying the unwanted. A penny-pinching lifestyle has many advantages.

 

  • Living on a tight budget can force you to pay any debts including your educational loans.
  • Developing a habit of living on a limited budget is a good long term skill. You will learn how to save in adverse financial circumstances.
  • You will be more conscious and disciplined in managing cash. It’s better to avoid unwanted purchases than holding a garage sale every year. So, you will think twice before every single purchase.
  • Your priority will be saving. That means, your own kitchen will become a fancy restaurant for you and your TV at home will be a multiplex theatre.
  • You would start following your passion rather than going out and blowing money on a  weekly purchase.
  • You will learn to be financially independent. 

Always remember, your choices and priorities are often the influencing factors of your financial success, not your salary.

Shared accommodation

Living alone in single accommodation abroad can be heavy on your pocket. And obviously, you don’t get to live with your parents when you are abroad.

 

In order to get your financial situation in order, it’s always advisable that you share the accommodation with other roommates.

 

Moving in with a friend of yours in a foreign country can be tricky sometimes. For example, you will most likely be able to split the room rent, utilities, household supplies, groceries, etc with him/her and you would be able to save a handsome amount of money.

 

On the other hand, it can also impact your savings adversely. While spending the leisure time with your friend and enjoying, you should ensure you don’t get into activities that involve money.

 

 

According to Women Who Money

“The money you spend sitting in a coffee shop, walking the mall, or going out with friends rather than inviting them to your place can all add up. And that doesn’t include any stress-related costs you may be dealing with either.”

Talking about stress-related costs, you will have to dig deeper into your pocket if you fall into an emotional spending trap. Some people go on a shopping spree saying they are on a mission to rejuvenate their mood.

Moreover, many people tend to be less cost-conscious when they are overseas. It can be either due to the complexity of currency conversion or due to the luxurious lifestyle that the particular country offers. 

The best way to tackle this is to keep looking at your credit card and bank statements before you step out of your house.

You have come to a foreign land to earn money and pay off your student loans, and don’t look at it as a “limited opportunity” to enjoy your life.

Find an extra job

additional income to pay off your student loans

When you are no longer a student and start working, the reality hits hard – payment of bills.

When abroad, many people land in a second job apart from their 9-5 job, in order to meet their financial needs. For some, it may be for savings while for others it will be for paying off their debts. But it’s necessary to maximize your income especially if you have student loans.

A supplementary income is always a good idea, though there is a lot of hard work behind it. Working for longer hours will be mentally and physically tiring, but it’s temporary.

In fact, you will find it easier to get part-time jobs if you are willing to work on odd hours like early mornings, or weekends.

There are various job opportunities available to bump up your income.

For example, if you are a native English speaker and a bilingualist you can work as a translator or interpreter.

If you are passionate about something, it’s a good idea to find a suitable career in that particular field. The reason is, a large number of people who are passionate about the job tend to be more productive and happier at work. As you care deeply about a job you tend to forget about the stress and long tiring working hours.

Live In Low-Cost Areas

living in rural areas when abroad

Working abroad can be a very rewarding job as you will be able to learn new cultures and you will also learn to get out of your comfort zone and be independent. Having said that, choosing the right destination is also very important. 

 

Asian countries generally pay teachers reasonably well. But if your aim is to save and pay off your student loan Japan should be opted out as it’s a very expensive country. Even if you are offered a job in Japan, you should ensure you stay in rural areas in order to avoid the high cost of living.

 

Vietnam is one of the best places to teach overseas with decent salaries and a very low cost of living. Taiwan is also one of the ideal places to teach because of the decent remuneration and rock-bottom living expenses. Another affordable Asian country is Cambodia.

 

China is another country you can choose for teaching abroad due to its sky-rocketing number of teacher requirements. Even though major cities like Hong-Kong, Beijing, Shanghai, etc are notoriously expensive cities, in most cases your accommodation is taken care of. You also have the option of choosing rural areas where the living expenses are relatively very low.

 

Please refer to the following related article Top 10 Countries For Teaching English Abroad for more info.

Follow The Lifestyle Of Locals

live like a local when teaching in other countries

The enormous number of sky-scrapers and pizza outlets and huge shopping malls can be tempting for many people when you land in a foreign country. But if you truly embrace the lifestyle of middle-class local people over there, you will be able to accumulate enough money for student loan repayment.

The following tips may help you to live on a shoestring budget.

  • Set your financial goals. Make a weekly budget and start saving.
  • Don’t compare yourself with others. Instead, learn from others. You never know the financial situation of others.
  • Challenge yourself to live without credit cards. Credit card is a money trap for people with debts. 
  • Avoid going to fancy restaurants and bars. Cook your own meals at home.
  • Say a complete no to luxury home utilities and expensive mobile devices.

On a different note, try to close out your student loan as early as possible by paying off more than the minimum required.

Sum And Substance

Though international travel is not advisable during this pandemic situation, living outside of your home country is a beautiful dream for many. Loans don’t get written off just because you are shifting to another country. So you need to plan your finances well in advance in order to pay your student loan faster. 

 

Good financial strategy is absolutely necessary because after you move to a foreign land it’s going to be a tough balancing act between your work life and your debts.

 

Before moving, you should select a repayment plan that fits with your income and expenditure. There are many different payment options available such as PAYE, standard, graduated, extended repayment plans, and many more.

 

You may also need to decide on a bank that offers the lowest interest rates. Once the paperwork is completed, it’s also important to update your contact details with the lender for easier communication.

 

There are many tips and tricks to set aside cash to pay off your student loans. It’s a brilliant idea to sell unwanted/unused items at your home before moving. It can be either done via garage sales or through online groups. Every penny you save matters a lot.

 

Furthermore, remember living on a shoestring budget is the success mantra of many people who are in control of their money. A strict budget can make you financially independent and make you learn the difference between needed vs wanted.

 

Another brilliant budgeting tip is to share the accommodation with someone. It can not only cut the cost of your rent but the utility bills, monthly grocery bills, etc also can be divided. 

 

When people with student loans plan about budget, the first thing most people think about is a second job. It’s a great way to earn additional income and start your savings. But do keep in mind that finding a job that you are passionate about will be a great stress reliever for you.

 

Choosing your destination also plays a crucial role in making you financially disciplined. Select the countries with a low cost of living and a handsome salary. There are many affordable Asian countries that can offer decent pay except for places like Japan and major cities in China. But living in remote areas will help you to cut the cost.

 

Your hard-earned money is not meant for luxurious malls and pizza outlets – it’s meant for your saving and loan repayments. So, try to live a modest life of local people by cooking your own meals and thus avoiding lifestyle inflation. Also, saying no to the credit card will be one of the wisest ideas because of the very high-interest rates. 

Commonly asked questions

Does my student loan be written off after I move abroad?

No. Even if you are living overseas, you will still have to repay your student loan.  If you default, you will have to pay penalties along with your fixed monthly payments which will be a heavy burden on you. The best thing you can do is to choose a bank that offers the lowest interest rates and choose a plan that fits with your income.

Is it okay to shift to another country when you have student loans?

It’s perfectly fine to relocate to other countries when you have debts. But you need to inform the bank well in advance and choose the payment plan in order to make sure you make timely payments. You should also update your contact details with the banker to ensure smooth communication between both of you.

What repayment plan will be best for my student loan when I am abroad?

Banks offer a variety of student repayment plans to suit the needs of the borrower. Some of them are PAYE (Pay As You Earn), standard, graduated, extended repayment plans, etc. Choosing the right one will be a daunting task as the payment plans should match with your income and expenses.

How to repay student loans when you are abroad?

First, you have to figure out how much do you owe to the bank and then choose the right payment plan before you leave the country. Living on a tight budget and sharing your accommodation with other roommates will help you to save a considerable amount of money towards loan repayment.

It’s also important that you choose the right destination. So, choose an affordable place with decent salaries. Also, finding a second job will help you meet your financial goals.

What happens if you flee the country without paying my student loans?

If you flee the country without paying your student loans it would be nearly impossible for lenders to track you. You will be considered as a defaulter after 120-360 days depending upon the bank. After that, your credit scores will start dropping and you will become a riskier borrower according to banks.

As defaulting student loans is not a criminal crime, you won’t be arrested but legal action will be taken by the banks. At any point in your coming back to your country, you will have to live with cash in your hand as it will be impossible to establish credit due to your low credit score.

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Author

Ranjana Gopinath has been working as a medical transcriptionist for the last 10 years. She is an English Literature graduate who has also successfully completed a professional course in copyediting and proofreading from Rehoboth Academic Services in Bangalore. She has also completed basic computer programming in New Jersey, US and is an aspiring content writer. She is a perennial student who aspires to get into digital marketing. At home, Ranjana is a wife and mother of two sons. She has an immense passion for cooking, cinema, and wine-making. Her articles in Henry Harvin will focus on an array of topics

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