MPower Financing Review: All the relevant info in one place

MPower is a private loan provider which aims to reduce the financial barriers that cripple international education. Learn more on who they are, how to be eligible for their services, repayment options available, refinancing services available and much more.

Updated by Vidish S on 12th June 2020

With the rise in tuition costs and other expenses to be met to get your degree students and their parents seek ways to meet these costs. Apart from the free financial aid options out the best option one can go ahead for is student loans. It is advised to have an in-depth knowledge of student loans so that you can choose the best student loan for you.

Federal student loans are those loans that are provided by the federal government and come with a number of benefits. Private student loans are those given by private lenders, MPower is one such private lender. This article provides a deep dive into what MPower has to offer and how you can go about paying for college with the help of MPower and the services it provides.

Table of contents

Let’s talk about MPower

MPower Financing is a Public Benefit Corporation whose objective is to reduce the financial barriers that cripple international education. It is based out of Washington, DC, with offices in New York and Bangalore, India. It was established by Manu Smadja and Michael Davis in 2014, both of whom attended INSEAD Paris where they met. It has been the recipient of multiple awards, including "Growth Company of the Year."

MPower Financing offers its loaning services to students who cannot typically qualify for a loan from other banks or lenders owing to the unavailability of a co-signer or collateral. MPower Financing works with students who are within 2 years from graduation and uses a proprietary credit model that takes into account the borrowers’ academic success and career path. 

Students that usually go for MPower are international students or domestic students whose parents lack the credit history to cosign, and also the recipients of DACA. The company works with 190+ nationalities, including Americans. MPower Financing's services can be accessed at 350+ university and college programs as of January 2020. Around 90% of its borrowers are in graduate school.

Applicants are also provided with support letters that can be used to apply for a US visa, career support during school, and can help them pay off their loan early without incurring prepayment penalties. In 2019, MPower added another service to its roster, personal career coaching to its list of applicant benefits through its Path2Success program. The program has a lot of helpful services such as interview training, resume reviews, and networking opportunities. A follow-up program,  MPower’s Peer-to-Peer mentoring program, brings together graduate students and alumni with first-year graduate students to offer mentoring and career preparation advice.


Some PROS and CONS to help you consider

Selecting the Lender that is best suited for you is no small task.

Listing some Pros and Cons of a Lender can go a long way in helping you make the right choice.

Top reasons to consider MPower
Reasons to look elsewhere
No credit score required. Credit history is not a required qualification
Not great for domestic students. Not a great choice for domestic students because they might find better rates for student loans elsewhere.
No Cosigner is necessary. And DACA recipients can also apply.
Funds dispersion takes time. As long as three weeks. It might take up to 10 weeks for the funds to be disbursed.
There are no prepayment penalties. Relief for students who expect to make a decent income right after graduation and who want to end their debt as quickly as possible
Only for the final two years of school. MPower can’t help if you’re starting a new program.
Forbearance of 24 months. It is longer than many lenders offer.
Not all schools eligible. MPower works with over 350 schools in the US and Canada, but your school may not be eligible.
Visa support. MPower can write you a visa support letter if you require help with approval.
 
Career support. MPower helps in constructing your resume and potentially attaching with a paid internship or full-time job in the US through MPower
Origination fee. Most private student loans don’t come with any fees. MPower’s does.
Rate discount. MPower deducts up to 1.5% off your interest rate after you graduate solely for repaying your loan on time with autopay.
Short loan term. MPower caps its loans at 10 years.
A simplified underwriting process. The process is quite straightforward.
One repayment option. Immediate interest-only repayments are required with MPower. There’s no option to defer repayments until after you graduate.

What makes you Eligible for an MPower student loan

Lets split up the eligibility into two sections for ease of understanding.

Financial Eligibility :

MPower considers dozens of data points, including future income potential, to determine creditworthiness and make a lending decision. The company does review your credit history, but credit scores are not a factor in its decision since most international students do not have U.S. credit scores.

  • Minimum income: Undisclosed

  • Maximum debt-to-income ratio: Undisclosed

  • Minimum credit score: Not Considered

  • Can qualify if you’ve filed for bankruptcy: Not Considered

  • The typical credit score of approved borrowers or co-signers: Not Required

  • Typical income of approved borrowers: Undisclosed

Other Requirements :

  • Citizenship: Students are required to be from one of the 190+ countries MPower works with. DACA students are not required to have a Social Security Number to qualify

  • Location: Available to students attending eligible colleges in all 50 states, Washington, D.C., and Puerto Rico

  • Enrollment: Half time or better

  • Types of schools served: Four-year Title IV school that MPower partners with


Loans for International Students

The lender provides loans for international and DACA both undergraduates and graduates students but has requirements like-

1- Eligibility requirements

To qualify for the International and DACA  student loans from MPOWER Financing there are certain criteria like the student must be enrolled in an eligible school in the U.S. or Canada and the program must start in 12 months. You can also apply if you are within two years of graduating from your program. MPower doesn’t consider credit score mainly they take other factors also for consideration like your future earning potential, to determine whether to approve you for a loan. No collateral is needed, either.

The Lender offers loans to 190 countries all over the world helping those students who have the dream of attending college in the U.S and you can refer their official website for more detailed information.

2-In-school repayment options

For international students, MPower offers just one repayment option and in this, it is required to make interest-only payments while you’re in school and for six months after graduation and once the grace period ends, your repayment term is 10 years. The borrower has to make fixed payments until the loan is paid off.

The borrower can make extra payments and pay off the loan as soon as possible as  MPOWER doesn’t charge prepayment penalties, so paying off your debt ahead of schedule can help you save money.

3-Interest rate discounts

MPower offers interest rate discounts like .5 percentage point discount when they set automatic payments, discount for making six consecutive monthly payments on time while signed up for autopay and if you can show proof that you graduated and are employed. Both groups, DACA, and International students can qualify for these discounts and reduce their interest rates.

4-Scholarship opportunities

Mpower offers three scholarships to the International and DACA student to help financially and making their education journey easier.

1- Global Citizen Scholarships

2- Women in STEM Scholarships

3-Central America Scholarship Program

These are scholarships that can help a student to a large extend.


Some details you should be aware of

The following table should give you an overview of what to expect with Mpower

Minimum Loan Amount

$2,001

Max. Loan Amount

$50,000

APR

8.89% to 14.97%

Interest Rate Type

Fixed

Maximum Loan Term

10 years

Requirements

F-1 student visa with attendance at partner university in the last two years of a degree program.

Maximum Loan per Semester

$25000

Prepayment Penalty

No

Late Fees

Yes

Origination Fees

5% of Loan Amount.

Rate Reduction

Up to 1.50%


What do your repayment options look like with MPower?

MPower offers interest-only repayments where you’re required to make repayments on the interest that adds up on your loan while you’re in school and six months after leaving.

MPower loanees are also required to make interest-only payments starting 45 days after loan funds have been disbursed.

Apart from that, all loanees have a 10-year repayment term.

You are provided a 6 months grace period but are still required to make interest-only payments during that period as well.

In-school deferment

Students enrolled at least half-time are eligible for up to 24 months of deferment while continuing to make interest-only payments.

Military deferment

Active-duty service members are allowed to defer payments for 24 months in 12-month increments. Interest still accrues, but during active service, interest on loans will be reduced to 6%.

Hardship forbearance

loanees have a 24-month limit on forbearance, available in six-month increments. During forbearance, interest will continue to accrue on the loan.

Natural disaster forbearance

Available in three-month increments for loanees affected by natural disasters, as confirmed by the Federal Emergency Management Agency. Interest still accrues.

It should be noted that MPower also provides Death/Disability discharge.


Interested in private student loans? Find the best private student loan for you


How to apply for MPower Student Loan

It is a simple and quick process. The money is available to a student just as a standard student loan would be: covering education-related expenses like room, tuition, board, insurance food, and books.

To apply, you must visit MPower’s website and click the “Get Started.” button. You will be prompted to provide some information regarding:

  • Your citizenship

  • Your enrollment status

  • Your university and degree

  • Expected graduation date

  • Required loan amount

MPower will then check your eligibility and provide you with a rate quote. If you choose to continue with the lender, you can move forward with the application process.

Length of Time for Loan Approval and Disbursement

The application process doesn’t take long to complete and online it can be done in a single sitting if you have all required documents with you. However, MPower after processing your application and approval will submit your information to your college for certification, which can take a long time tentative two to six will be taken for all the process thus it is better to apply for a loan well in advance and avoid last-minute chaos.


Let’s talk about refinancing

MPower does not offer student loan refinancing as of yet.

If you currently are an MPower student loanee and you have a good credit history, you might want to consider replacing your current loan, especially if you can reduce your interest rate and get a favorable repayment term.

Before you refinance with any company, be sure to look at interest rates and the length of the loan, both of which will impact your monthly payment.


Should you give MPower a thought?

Assuming that you don’t qualify for federal aid and you’re in the last two years of your education provided you’re studying in the U.S., MPower Financing student loans can help you get the financing aid you need to complete your degree.

But ensure that you exhaust all your other options first and evaluate several different lenders.


A final word of advice

For an international student without a domestic cosigner, MPower is one of the sole courses of action you can take. However, If you can find a cosigner with good credit, you’ll qualify with far more lenders.

On the other hand, domestic students should make sure they’ve exhausted federal student aid options before taking out private loans. However, domestic students who’ve exhausted their federal options might want to look at alternatives to MPower, because they are likely to offer better student loan interest rates.

We advise you to get multiple quotes from several lenders before agreeing to go with one. Doing some homework and comparing rates may save you thousands of dollars over the life of your loan.