MPOWER Financing Review
MPOWER Financing gives international college students an option for receiving higher education loans. It can be notoriously difficult for international students to get student loans because they don’t have a U.S. credit score. MPOWER doesn’t require a credit score, instead of using other criteria for loan approval.
What we like:
International student friendly
|Fixed APR||7.99% – 13.99%|
|Loan Terms||3 – 10 years|
|Loan Amounts||$2,001 – $50,000 per school year|
International student Manu Smadja and first-generation domestic student Mike Davis both struggled to pay for their college educations. To open up opportunities for U.S. college attendance to other international and domestic students, they founded MPOWER Financing in 2014.
The Washington, D.C.-based lender offers global citizens who show solid career and academic potential a chance to secure personal loans for their college expenses.
MPOWER Financing Overview
What makes MPOWER unusual is that foreign students don’t need a U.S. credit score, collateral, or a cosigner to secure loan opportunities. Although applicants don’t need a U.S. credit score to be eligible, MPOWER still performs a credit check, using credit reports to verify payment history. MPOWER says it considers academic success and career path during the approval process.
>> Read More: Student Loans Without a Cosigner
MPOWER will also report loan and payment information to the credit reporting agencies, which can help borrowers establish and build credit.
It offers loans to students from more than 190 countries who are attending college in the U.S. or Canada that MPOWER has partnered with. MPOWER also lends to students who live in the U.S.
The application process and approval for these loans can be simple and relatively quick. The money can be used just as a student would use a student loan—covering education-related expenses like tuition, room and board, food, insurance, and books.
Rates, Fees, and Eligibility
Students can take out loan amounts from $2,001 to $50,000 with fixed interest rates. The rates and loan terms depend on what type of student you are:
- International graduate students can get a fixed interest rate of 12.94% APR.
- International undergraduate students can get a fixed interest rate of 14.98% APR.
- Domestic graduate students can get an 8.89% APR fixed interest rate.
- Domestic undergraduate students can get a fixed rate of 10.91% APR.
- Borrowers can qualify for payment discounts of a 0.5% rate reduction for fulfilling each action: use automatic withdrawal from one’s bank account for repayment; make six consecutive on-time payments; and provide proof of graduation and employment. That means a potential for getting an up to 1.5% rate reduction.
- 5% origination fee; no application fee; no prepayment fee.
The length of the loan can range from three to 10 years, and there is no penalty for paying it off early.
While this might be a good financing opportunity for foreign students who want to attend school in the U.S. or Canada, MPOWER won’t accept all applicants. They carefully vet out the candidates that they assess won’t have as much of a chance of successfully paying back the loans after college.
Some Eligibility Criteria:
- Must attend a U.S. or Canadian school that MPOWER is partnered with; these schools tend to have stronger career outcomes.
- Must be in the last two years of your program of study.
- International students, permanent residents, DACA students, and U.S. citizens are eligible.
There are several benefits of using MPOWER loans for school, including:
- A simplified underwriting process.
- A cosigner isn’t needed, which is a big help to students who have no family to rely upon, or those who have families with no U.S. credit history.
- You don’t need a credit history in the U.S. to secure this loan, making it one of the few financial assistance options for foreign students.
- The process is straightforward and relatively quick.
- There are no prepayment penalties, which is nice for students who expect to make a decent income right after school and who want to retire their debt as quickly as possible.
Although there are several pros to using MPOWER for private loans, there are cons as well, including:
- While it might be a good option for some international students, it might not be a great choice for domestic students because they might find better rates for student loans elsewhere. The interest rate is likely to be higher than they might pay with other student loan lenders.
- It might take as long as three weeks before potential borrowers receive a final determination about their loan. It might take up to 10 weeks for the funds to be disbursed.
- There is no payment-free grace period. Students are required to begin making student loan payments shortly after the loan is received, even though they are still going to be in school at the time. This can cause financial hardship for students, who will likely be using part of their loan to repay their loan. The payments during school and for the six months after their graduation date are interest-only payments, which could lessen the burden on the students some.
- MPOWER won’t loan money to students at every school—only certain schools are eligible. But the list of eligible schools is growing each year.
- If you are in the first or second year of a four-year program at a university, MPOWER won’t be able to issue you a loan. They only lend to students who are in the last two years of an educational program.
Can You Refinance MPOWER Student Loans?
At publishing time, MPOWER does not offer student loan refinancing. If you currently have an MPOWER student loan and you’ve established a good credit history, you might want to consider looking for student loan refinancing from another lender, especially if you can reduce your interest rate and get a favorable repayment term.
Before you refinance with any company, you should look at interest rates, the length of the loan—which will impact your monthly payment—and if it offers flexible repayment options.
Alternatives to MPOWER
Domestic students who are seeking a private student loan might look at alternatives to MPOWER because they are likely to get a better interest rateelsewhere. They should look at similar lenders and should also fill out a Free Application for Federal Student Aid (FAFSA) to see what kind of federal financial aid they can receive.
They should ask for multiple quotes before agreeing to go with a particular student loan lender. Doing some homework on different companies and rates may save thousands of dollars during the life of the loan.
Also, students should explore all the scholarship opportunities they can well in advance of attending their school. They should ideally start the scholarship search the year before they plan to begin college.
International students should check with their school to see if they’re eligible for federal student loans or other federal aid. However, for international students who don’t have as many options for education loans, they might think MPOWER is their only option, despite the higher interest rates.
>> Read More: Student Loans for International Students
On the plus side, since they’ll be making student loan repayments while they are in school, they will be working on building their U.S. credit history with each payment. That can help them gain a bit more credit history under their belt by the time they graduate. That can benefit international students who decide to stay and work in the U.S. and who will need a credit history if they want to buy a car and a house at some point.
MPOWER is one of the few options for school funding that international students might be able to secure. But they only loan money to those who they deem have the best chance academically and through job opportunities to repay their debts after graduation.
While the interest rates are high compared to some lenders, international students who have no other options for financial support might feel this is their best shot for securing money for school. They may also want to explore work-study jobs to help defray the cost of their education and reduce the amount they have to borrow.
Domestic and international borrowers should fully explore all federal and private student loan options before choosing a lender to ensure they get the best rate, which might help them save money in the long run. However, if they don’t have a cosigner and have come up empty on other financial aid possibilities, this option might work for them.3.85 MPOWER Student Loans
Author: Shannon Serpette
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