How to Make International Money Transfers Cheaper When Studying Abroad
Studying abroad can open many doors before you, which is essential in the competitive world we live in. However, moving to a different country to get your education is a challenge in many ways. Money, in particular, is a big issue for students as studying abroad isn't cheap by default. And it's not only the tuition and extra costs you need to worry about as even transferring the money to pay for your courses can add as much as 10% to the cost.
Luckily, there are ways for students to reduce these costs significantly. And as the solutions you will use to do this are online-based, they will also make it much easier for you to manage your finances.
Challenges of Studying Abroad: Expensive FX Transfers
The challenges of studying abroad are many. The most common of them are the language barrier, stress and psychological pressure, and, of course, money. You can learn the language and maintain a solid support system using modern communications tech to stay in touch with your precious people. Money, however, is a much more complicated matter.
First of all, studying abroad is expensive simply because tuition and living costs will add up to a rather impressive amount. For example, if you apply to a university in Western Europe, the average living costs a year will be $12,00-15,000. Tuition costs vary quite a bit depending on the country, but they can go up to and beyond $1,000 per semester.
Admittedly, some countries have it much cheaper. For example, you can study for free in Norway or Germany (if you speak German) or for as little as $1,000-2,000 in countries like Belgium, Switzerland, the Czech Republic, and Poland. And if you choose, say, the Czech Republic, the living costs will average at $5,400-9,000 a year, as opposed to Switzerland, where saving money on tuition won't be of any help because the cost of living in the country is around $22,875.
All in all, anyone who cannot afford to pay that much should reconsider studying abroad in the first place. If you can afford it, however, you need to understand that you might be losing a rather large amount simply when trying to get your money to the country.
The problem here is that you'll have to make large transfers to pay your university and meet some living costs, like rent. This means that large money transfers are unavoidable. However, if you try to make them through a bank, you might lose 10% or even more in various fees and currency exchange margins.
And that extra $1,000-2,000 and more, which, essentially, go nowhere, might be a deal-breaker for many aspiring international students.
How to Cut the Costs of Transferring Money When Studying Abroad
Bank money transfer fees and currency exchange rates that are far from favorable are the reasons why students are losing so much money when paying for their living expenses and education abroad. For the longest time, there was no solution to this problem because few bank alternatives existed. Money transfer services like Western Union or MoneyGram don't count as their rates aren't much better.
This problem created a great demand for a more efficient method of international payments. And eventually, a variety of solutions appeared. Today you know it as online money transfer websites. They are many and each has its own special features. For example, TransferWise has fixed rates and Currencies Direct has the largest number of offices in this industry.
The most important thing about these international money transfer services is that they allow you to cut the cost of each transaction to less than 1%. Of course, the exact numbers will differ, but on average, you shouldn't pay more than 3% maximum. This means that even the worst-case scenario is better than what banks can offer.
Online Money Transfer Services: How Do They Work?
The savings offered by online money transfer companies are so significant that it's not surprising that many people doubt them. These offers often seem "too good to be true", which makes many people avoid them out of wariness.
However, if you understand how these money transfers operate, you will see that low costs are easily achieved. First, think about how bank money transfers work.
For a bank to make a transfer, they need to move their actual assets from one place to another. And in many cases, they will use at least one intermediary bank before delivering money to its destination. The process itself is costly and takes a lot of time. That's not even counting how much it takes to operate a bank. That number also affects the size of bank fees and FX margins.
Online money transfer companies, on the other hand, do not move your money from one bank to another. Instead, the company has accounts in multiple countries. So, when you are making a transfer, you are only making a local transfer to the company's bank account in your country.
In the meantime, the money transfer provider withdraws an equal amount from its account in the destination country and makes a local transfer to the recipient's account. Therefore, the only extra fees that need to be paid are much lower local transfer fees. In some cases, those transfers are free.
And the company itself takes only a minimal fee and FX margin because these businesses live off the volume. Therefore, they are interested in making their rates and fees as low as possible to attract more customers.
As you can see, the whole process is legal and transparent, so you can use online money transfer services with confidence. However, remember to use only the services of trusted and certified companies.
In Conclusion: Studying Abroad Isn't Cheap but Worth It!
No one can argue that studying abroad is hard in many ways. However, this offers many benefits to both your personal growth and career opportunities. In fact, you might even have a good chance to find employment in the country where you studied. The value of highly-skilled professionals is so high that some countries, like the UK, take steps to simplify employment for international students encouraging them to stay and work there.
So, the opportunities are endless, which means getting this type of education is money well-spent. And if you are clever about it, you will be able to reduce the costs of studying abroad. Using online services for cheaper and faster money transfers is a good place to start.
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