An education is far more than just what’s learned in the classroom, and opting to study overseas provides a wealth of opportunities – not just see the world, but to discover different cultures too. If your son or daughter has decided to go to college in another country, they’ll have the chance to choose from some of the best educational facilities available and experience a different lifestyle too.
However, there’s practical challenges with going to college overseas – not least – paying for tuition. In addition to organizing how to get your money to the right place, there are more costs involved than if your child were simply paying a US college.
Your regular bank is the obvious choice to send international payments. But before you make the arrangements to pay the fees, it’s worth investigating other options.
Money transfer services specialize in foreign currencies and sending money overseas. In addition to being safe and secure, they can often work out much cheaper with lower fees and better exchange rates.
Here’s a closer look at using a money transfer service to pay for tuition overseas, and the reasons why it’s the best option.
Accessing the Experts
Money transfer services don’t offer a whole range of financial services; they’re completely different to a bank. Rather than dabbling in a bit of everything, their products and services are entirely focused on currency exchange and sending international payments. This means that money transfer providers are the experts in this type of transaction and can provide very specialized advice and support.
There’s lots of different options for sending money overseas, including how to get the best when you change your dollars into a foreign currency. A good money transfer provider will be able to offer different options to suit your circumstances and explain the relative advantages of each.
Inspect the Exchange Rate
If your son or daughter is going overseas to study, there’s a very good chance that you’ll need to convert your money into a foreign currency to pay the tuition fees. Although banks often have branches in other countries, unless both accounts are held in the same currency there’s no advantage to using this method to send money. If you’re paying tuition fees directly into the overseas bank account for the college, it’s unlikely the currencies in your bank account and theirs will match. This means you’ll need to use an exchange rate.
Although it may seem easy to use a bank, the exchange rates are typically poor compared to money transfer services.
The Interbank rate is the price at which banks and big brokers are able to access foreign currency transfers, and represents the cheapest way to transfer money from one currency to another. Interbank rates are not available to the general public, and there’s a big mark-up added to these rates by banks before they’re quoted to customers.
The Cost Saving
Money transfer companies send a large volume of foreign currency payments every day and this offers more flexibility. These savings can be passed on to the customer; just like buying in bulk, it’s much cheaper than sending payments on an ad hoc basis. This is just one of the reasons why exchange rates are normally much more competitive with a money transfer service.
The other factor is the frequency of the updates; banks will normally only update their currency exchange rates once a day. As money transfer services are much more closely linked to the foreign currency market, the rates are constantly updated throughout the day allowing customers to take advantage if there’s a move in their favor.
More Than Just Currency Exchange
When you’re looking to make every cent count, there’s more than just the exchange rate to consider. Banks typically charge a substantial fee for sending international payments, and added to the inflated exchange rate this can mean you’re left seriously out of pocket. In fact, using a bank to send an international payment could cost up to 5% more; for tuition fees of $10,000 this will cost you as much as $500 extra.
That’s $500 you could put in the pocket of your son or daughter. Or keep for their inevitable emergency fund.
One of the problems with banking payment fees is that they’re often calculated as a proportion of the money being transferred. The more money you send, the higher the fee will be. For tuition fees, this means the costs can really start to mount.
By contrast, money transfer services typically charge a flat fee. This means that you can see the cost from the outset and at a fixed price, it works out much cheaper than a percentage rate.
Even when this isn’t the case – the percentage they charge will be much lower.
There may be times when you want to send the money overseas quickly, so speed may be of the essence. This could be for tuition fees or – as already mentioned – the inevitable, yet last-minute rush – to get cash to your son or daughter while they’re in a foreign country.
Transfers from banks could take 4-6 days to reach Europe, and even longer for the rest of the world. It may be possible to get a speedier payment, but you’ll have to pay a hefty premium for the service. Even then, it’s not usually the quickest option.
Once again, money transfer providers outperform the banks; in some cases you may even be able to send a same day payment without having to pay more for the privilege. Some countries take longer to process payments because of restrictions by their governments. Even so – a money transfer service can slash the amount of time it takes for the funds to reach the account.
Peace of Mind
No matter how quickly a payment can reach a bank account, security should always be a priority. The good news is that it’s simple to make sure you’re protected when using a money transfer service.
In the US, all money transfer providers must be registered and hold a current license to trade. The Financial Crimes Enforcement Network (FinCen) – a US Treasury department – are responsible for registering, monitoring and regulating money transfer providers. There’s a public register where you can check to see if the company you are thinking of using holds a current license.
If the company isn’t registered, you should not use their services under any circumstances. However, if they’re listed as being currently registered you can proceed knowing that you’re using a legitimate provider.
Take the Pain out of Tuition Fees
Organizing payment of tuition fees for an overseas college may seem complicated but a money transfer service can make it simple. Safe, secure, fast and cheap, you can now pay tuition fees overseas with no hassle and real peace of mind. You’ll also find that the representatives employed by these foreign exchange specialists are there to help you, and their job is to save you money – not to extort it from you!