Studying abroad can be extremely beneficial for your future career, and it will definitely help you gain valuable experience, both in professional and personal life. However, the reality is that studying abroad can also very expensive. Even if you manage to score one of the top scholarships for international students, you might still have to pay a lot of money simply to cover living expenses.
The currency costs involved in money transfers alone will eat up a substantial amount, and that money is literally wasted from your point of view because it doesn’t gain you anything. Therefore, it’s essential that you find a better alternative to bank money transfers, which might eat up 2% or more per every transaction.
How Much Does It Cost to Pay for Your International Education?
To get a better idea of why the money you lose due to bank transfer fees and foreign currency exchange rates matters so much you need to do some calculations. First, understand how much money you’ll be transferring to a foreign country, on average.
For example, in 2019-2020 a year’s tuition and living expenses for undergraduate international students at the University of Iowa cost from $45,610 to $58,920, depending on your area of study. In Canada, an undergraduate degree can cost up to 20,000 CAD a year. In the EU, costs will vary greatly depending on the country. Countries like Norway, Finland, and Germany offer multiple free educational opportunities up to the undergraduate level, and there are also countries like Poland, where your degree might cost €2,000-3,000 a year or less. There are also countries like the UK, where a year’s tuition would cost around £10,000. And you should also prepare to pay between €10,000 and €20,000 in living expenses every year.
Now, look at those numbers and see how much 2% of the total amount would be. That’s the least you are going to lose during the bank transfer. Depending on various factors, such as currency, bank, and type of transfer, you might be losing a lot more.
Think about how many useful things you could buy with that money. An unnecessary expense of this size shouldn’t be allowed, and luckily, today international students have ways to avoid it. In order to do this, you’ll need to get the help of specialists in currency handling. They will not only help you to avoid huge bank transfer fees but also offer assistance in mitigating the losses caused by foreign currency exchange. The most popular money transfer brokerage services international students can use include Currencies Direct, WorldFirst, and Global Reach.
How Do International Currency Transfer Services Save Students’ Money?
Unlike banks, leading international money transfer companies are transparent in their fees, which are either very low or absent altogether. These companies make money off the volume of transfers they process. Therefore, it’s more lucrative for them to keep those transfers cheap to attract more customers. Banks, on the other hand, make a large portion of their profit off the fees they charge per transfer.
That’s, probably, why they are rather vague in explaining their fees. In fact, in the majority of cases, you won’t even understand how much money you actually lose during transfer, unless you study a detailed statement after the transfer has been completed.
Admittedly, banks have huge operational costs. Therefore, the large fees they charge are, somewhat, warranted. The main reason international currency transfer brokerages have such low rates is that their operational costs are much lower. They do not physically move money across borders. Instead, you pay to the company’s account in your country and they transfer an equal amount to the account you need in the destination country. They move money from their own account there, so the costs are minimal and the services are even able to use the mid-market currency exchange rate, which reduces your losses further.
All in all, depending on your court and money transfer company you choose, the transfer might cost you less than 1%, which is a major improvement compared to bank rates. Also, you get the added convenience of many services offered by these companies.
International money transfer companies offer a variety of hedging tools as well as advice regarding currency exchange rates. This means that you might be able to secure more favorable rates and save even more money in the long run.
Saving Money as an International Student: Don’t Miss Any Chance
College students often live on very tight budgets, and it’s even more so for international students. Therefore, you shouldn’t miss any opportunity to cut your costs. As a student, you have many ways to do this if you plan your expenses wisely and take the time to research deals and special discounts.
Using some clever tricks, you can save money on anything, including college books and airline tickets. You should also research discounts offered by all the businesses around your campus, as well as international discount opportunities provided to students. All in all, make the most of your status while you have it.
Money transfer costs are the expense that often goes overlooked, which is a mistake you shouldn’t allow yourself to make. Be sure to research every company operating in your country to find the best deals.
But remember that the lowest rate doesn’t necessarily mean that the transferring broker is the best. This industry isn’t well-regulated and it’s growing extremely fast. This means that many new businesses emerge every other week and not all of them are reliable. That’s why you should only use the services of companies with an established good reputation. Also, check if they are regulated by any kind of financial authority.
Don’t stop at choosing one money transfer service. You should also explore every opportunity it offers to save you more money in the long run. Even if you don’t know anything about currency exchange rates and hedging, leading companies provide expert counsel as a part of their service package.
Therefore, all you need is to be proactive in seeking out every money-saving opportunity. Turn this into a habit and it will help you a lot later in life.
For more great college tips, check out the other blogs on College Basics.