Money hack: Save money when repaying international loans
Do you make regular repayments on an international personal loan, home loan or student loan? You could be losing money.
Sending money overseas can be expensive. And if you need to do it regularly, for example repaying a student loan, the costs can really add up.
With the second semester of university recently kicking off, you might be looking to send money back home to pay off your tuition fees or student loan. And it's not just you; with half a million international students currently studying in Australia, that's a lot of money being sent overseas.
Co-founder and CEO of online money transfer company OrbitRemit Robbie Sampson has shared some tips to make sure you're not paying any more than you need to when sending money abroad, no matter what it is you're paying for.
Consider these three things before you send another dollar internationally:
1. Is the receiver charged any fees?
Sometimes you'll not only be charged to send money abroad, but the receiver will also be hit with a fee. "This is typically charged by the receiver's bank. But it means if you’re sending money to yourself to pay your loan, you’ll likely be charged both ways. These charges can be anywhere upwards of $50 per transaction," said Sampson.
2. Is the transfer fee a flat fee or a percentage-based fee?
Some money transfer providers will charge a flat fee for the transaction, while others will apply a percentage-based fee. A percentage based fee of 1% might not seem like much, but if you're sending $3,000 abroad, that'a fee of $30.
3. What's the exchange rate?
Money transfer providers apply their own margin on top of the real currency exchange rate, it's how they make money. However, the margin that they'll apply varies greatly between providers so make sure you shop around for the best rate. "When sending money overseas you should choose the highest rate being offered. So, if a bank has the exchange rate for the Australian dollar at .89 and an online transfer service has it at .91, pick the online transfer service and save your money," said Sampson.