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The loan is in the United States and can only be paid using direct debit from a US bank account which is already established. However, all earnings are in GBP in the UK. What is the most efficient way to transfer funds, in terms of both frequency and mechanism, in order to make the loan payments?

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I think most efficient from a cost perspective would be if you can transfer a few months' student loan payments in one go.

I've used both Paypal and a regular international bank transfer from HSBC to my BoA bank accounts. The former works out a little cheaper but takes longer due to the time involved in getting the money from the US Paypal account into your bank account. The Paypal fraud detection system also doesn't necessarily like it if you access the sending and receiving Paypal account from the same machine. At least I've had problems with this in the past that took weeks to resolve.

The HSBC to BoA transfer took roughly 24h, but incurred fees at both ends (wire transfer fees from BoA and the usual international transfer fees at the HSBC end). Nevertheless this ended up working out slightly cheaper for me than Paypal as I could transfer the full amount in a single payment.

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  • I have been doing three months at a time approach. PayPal is an interesting idea. How do the exchange rates compare?
    – g .
    Commented Aug 21, 2010 at 8:32
  • They're fairly decent for smaller amounts, especially if you do take the fees into account. When I had to transfer more than GBP1000 in one go I would have had to split it into two transfers via Paypal and then the fees (and inconvenience) made the bank transfer simpler.
    – Timo Geusch
    Commented Aug 22, 2010 at 15:35
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I came across a good solution recently from surfing the expat forums and plan to give it a try...

XE Trade - they have free transfers (EFT, ACH) to/from bank accounts in Australia, Canada, France, Germany, Italy, Netherlands, Spain, The United Kingdom, and The United States. There are no transaction fees and the exchange rates are the same a specialist currency trader I had been using previously which are better than standard bank rates. It appears to be a popular choice among expats.

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