They don't want my English money...

September 9, 2007 6:12 AM

What's the easiest way to make my US student loan payments from England?

My forbearance runs out in November, and I'm at a loss. Only payments in US dollars will be accepted, and the last thing I want to deal with is the HUGE hassle of going to the bank and ordering a cheque in dollars every month, which takes 5 days and costs 20 pounds. I tried to make a small payment towards the interest using my bank card to see what would happen, and even though it's visa branded, the payment didn't go through, so that's out of the question. The guy at the bank said that a regular credit card (as opposed to a debit card) might work, but I don't want to deal with a credit card and I doubt I'd even qualify for one (bad credit, unfortunately).

I am incredibly forgetful, so I'd like to set something up that's either automatic, or that I can take care of from the comfort of home. My only idea so far is to open up an internet bank account in the states to which I can paypal money each month from my bank here in the UK, but even that involves more fees than I want to pay, and I don't even know if I can set up a US account from overseas. I should have kept my US bank account when I moved here, but I didn't think that far ahead, unfortunately. I'm settled in the UK permanently, so I am looking for a long-term solution. Help, please!

posted by cilantro to Work & Money (11 answers total)

I went through this a few years ago when I moved here and could not find anything at the time that didn't involve large fees. What I am doing now, which works for me is writing my parents a cheque and having them make the payments for me. Their bank does not charge them any fees for cashing a foreign cheque, and the exchange rate that they give doesn't seem *too* bad.

What I do is I write about 6 months or so of cheques to my parents and send them all to them at once. They then know to cash them about a week before I get paid, as they take about a week to clear, and just remember that I have to leave £250 in my account. My parents then take care of making my monthly payments.

If you are able to open an account in the US from the UK, you could also send a cheque monthly to your US bank and have a direct debit come out of that account. I kept an account open in the US when I moved here and just changed my address to a UK address and added my mom as a joint accountholder.

I also seem to remember reading somewhere that you can use banks that are in both the UK and US (such as Citibank or HSBC) and open both dollar and sterling accounts and transfer money between the two. This may be worth checking into.

Hope this helps.
posted by triggerfinger at 6:24 AM on September 9, 2007

My friend recently moved to England on a rotational program with her company, a British company, and ran into this same problem. Until she settled down she did what triggerfinger did, pay her parents and they took care of it, but that isn't a long term solution...

Now what she's doing is she does her banking through Citi. She has two accounts really, a Citi account in pounds sterling and a Citi account in USD. The USD Citi account is linked to her student loans and credit cards whereas her UK Citi account is linked to her company's direct deposit. She simply transfers the money from one to the other and then has it autodebited.

If you don't like Citi (or can't get access to one), there are other banks that offer this such as HSBC. Good luck!
posted by wangarific at 7:36 AM on September 9, 2007

I ran into the same problem paying bills in Canada from the United States. It turned out to be nearly impossible. I too had to mail cheques (checks) to my sister and get her to make the payments for me. International banking hasn't caught up to the modern age at the consumer level.
posted by blue_beetle at 7:43 AM on September 9, 2007

Phone your UK bank and ask them is they can set this up as a direct debit and if so, how much will it cost?
posted by biffa at 7:44 AM on September 9, 2007

We had this same problem and this was our solution:

1. Get a personal loan from a UK bank (we chose Northern Rock).
2. Deposit the money into your main UK account.
3. Get the sort code and account number for your student loan (or loans, if you haven't already consolidated them). While you have them on the phone, tell them you're planning on paying off your student loan in full, and you need the exact amount before you wire the money over.
4. Do the wire transfer at your bank branch.
5. Enjoy knowing you've taken advantage of a rather wonderful exchange rate, and that rather than fighting with US student loan companies, you are now fighting with a UK loan company.

It saved us so much hassle with phone calls and missed payments and that ghastly credit card system they used to have. I highly recommend it.
posted by Katemonkey at 8:20 AM on September 9, 2007 [1 favorite]

Does your employer offer direct deposit? Could you get them to directly drop it into a HSBC or other internet bank. and pay from there?

Also have you tried getting in touch with a either the special advocate unit at your loan company or your congressman at home? Either of those can usually pull some strings.
posted by imjosh at 8:25 AM on September 9, 2007

Seconding wangarific: open a US Dollar account linked to your UK current account. The hassle of changing to a bank that offers this in a hassle-free way (Citi/HSBC) may be less than the hassle of arringing it at your current bank, and is doubtless better than the hassle of international money transfers.
posted by holgate at 9:08 AM on September 9, 2007

I have a UK sterling account and a US dollar account, both with Barclays, set up from the UK. I've wired money out of this account to the US without a hitch.
posted by poissonrouge at 11:55 AM on September 9, 2007

When I worked in London, I did the Citibank thing others have recommended and had a US dollar account. I had a checkbook for it and just sent checks home as needed.
posted by web-goddess at 2:49 PM on September 9, 2007

Went through exactly the same thing when I moved to the UK in 2002 -- it was a big hassle. Just to throw a slightly different spin on things for you: by FAR the easiest option for me was to just take out a loan in the UK, pay off my student loan, and then make payments on the UK loan. Given the insanity of the exchange rate right now it might even turn out saving you some dough in the long run especially when you factor in transfer fees, etc. Some more details in a previous thread here.
posted by lazywhinerkid at 1:30 AM on September 10, 2007

Well I didn't read through all above posts, but this is what I would do.

Set up a Paypal account for your UK based bank account. Then set one up for your US based account (if you don't have a US based account, I'm sure you can easily set up a free checking account with a family members address.) Transferring funds between paypal accounts has been the cheapest way I've found to transfer money overseas. So when the payment needs to be paid, transfer said funds to your US based Paypal account, then using online billpay, set up a monthly payment schedule and the bank will send out a check every month for free. As long as you remember to keep enough money in that account.
posted by wile e at 5:43 AM on September 10, 2007