International Students: Car Financing Options And Challenges

As an international student, you may need to finance a car if you require access to transportation. While some international students have the funds to purchase a car outright, most do not. There are a few options for financing a car as an international student, including taking out an auto loan or a personal loan. Some financial institutions, such as banks, may be hesitant to lend to non-US citizens, but there are companies that specialize in providing loans to international students, such as Stilt and Boro. To qualify for a car loan as an international student, you will typically need a valid visa, proof of income, and a good credit score.

Can an international student finance a car?

Lender options for international students

International students can secure car financing through international student car loans. However, it is more complex than a local student loan, and there are fewer options available.

• Private lenders: International students can borrow from private lenders, but they often require a US citizen co-signer. Lenders like College Ave, Earnest, MPOWER Financing, and Ascent offer tailored solutions depending on your specific needs. MPOWER Financing, for example, offers fixed-rate loans with no requirement for a co-signer, credit history, or collateral.
• Federal student loans: Unless you are an eligible non-citizen, you will not be able to access federal student loans. Students with Deferred Action for Childhood Arrivals (DACA) are also not typically eligible for federal student loans, but they may be able to receive other types of financial aid.
• International student car loans: Some lenders specialize in working with international students. However, they may ask about your immigration status and visa expiry date to understand your income and how long you will be in the country to repay the loan.
• International private loans: These are loans tailored to support international students and cover the expenses of studying abroad.
• Institutional loans: These are loans provided by the college or university itself. Check with your college to see if they offer financial aid to international students.
• Study abroad loans: These are loans designed for students studying outside their home country.
• Foreign government loans: These are loans provided by the government of the student's home country.

Application Process:

The application process for international student car loans will vary depending on the lender and the state. However, some common requirements include:

• Auto insurance: US law requires all drivers to have insurance, and you will not be able to acquire a loan without it.
• Proof of income: You may be asked to provide your credit history and employment details to prove you can afford the loan. However, some lenders understand that international students may not have a credit history and are willing to make an exception.
• Immigration documents: You may be asked about your immigration status and visa expiry date.
• Finance qualification form: This will require basic information about your employment, living, and financial situation.
• Payment documents: These include documents such as bank statements, rent, and utilities that show your monthly costs.
• Proof of lawful residence: This is usually unnecessary for US visa holders but may be required for those with temporary residence status.

It is important to carefully research different lenders and their requirements before applying for an international student car loan.

Visa requirements

To study in the US as an international student, you must obtain a student visa. The type of visa you need depends on your course of study. The most common student visas are:

• F-1 visas: For full-time international students pursuing academic studies.
• M-1 visas: For full-time international students pursuing vocational studies.
• J-1 exchange visitor visa: For foreign nationals who have been approved to take part in work-and-study-based exchange programs.

To obtain a student visa, you must establish that you meet the requirements under US law to receive a visa. A consular officer will interview you and determine your eligibility. As part of the application process, your ink-free, digital fingerprint scans will be taken. After the interview, the consular officer may inform you that your application requires further administrative processing. Once your visa is approved, you may need to pay a visa issuance fee (depending on your nationality) and make arrangements to get your passport and visa.

It's important to note that a visa does not guarantee entry into the US. It only allows a foreign citizen to travel to the country. Upon arrival in the US, you must be admitted by US Customs and Border Protection (CBP) officials. If you entered on a visitor (B) visa, you must apply to the US Citizenship and Immigration Services (USCIS) for a change of status to student (F or M) status before your program starts. You cannot begin your studies until this change of status is approved.

Additionally, students with F visas must depart the US within 60 days after the program end date listed on Form I-20. However, they can request an extension through USCIS if needed. To maintain student status, institutions issuing Form I-20 or DS-2019 documentation for student visas must be certified by the Department of Homeland Security SEVP (Student and Exchange Visitor Program).

International students on F-1, M-1, or J-1 visas may be eligible to work in the US, but their employment is typically restricted to on-campus jobs or positions related to their field of study.

Credit scores and history

As an international student in the US, you may need a car to get around, especially if you live away from your school or college and public transportation is not easily accessible. However, getting approved for financing a car as an international student is complex compared to a local student loan.

International students are eligible for many loans in the US, but some lenders will not lend to non-US citizens. Some financial institutions will provide auto loans for international students, but there is no universal credit check policy. Some companies will check your credit score, while others will not. If you are signing with a cosigner, there is a high chance that the lender will check their credit history.

To apply for a car loan, you will need to provide the following documents:

• Visa: This is the most common and accepted form for international students. If you’re a US visa holder, you can use it as your primary identification document while applying for an auto loan.
• Finance qualification form: This form asks for basic information about your employment and financial situation.
• Payment documents: Copies of your utilities, rent, phone bill, cable, medical/life insurance, etc.
• Proof of lawful residence: This is unnecessary if you have a US visa. However, if you’re living in the country on some temporary status, you’ll need to prove your lawful residence.
• Employment letter (if applicable): If you’re working, make sure to have a letter from your employer. The letter should state your monthly salary and the year-long employment period.

There are companies that specialize in helping international students get vehicles without a US credit or driving history. These companies offer low rates and flexible monthly payments designed specifically for expat students.

Loan requirements

As an international student, you may not have the same financing options as your peers. However, some lenders specialize in working with international students to help them get the loans they need. While auto loan companies may ask about your immigration status and visa expiry date, this is to ensure that you can work and have an income, and to assess how long you will be in the country to repay the loan.

• Valid student visa and legal status in the USA: Lenders will request copies of your visa and relevant immigration documents to verify your eligibility. Your visa should cover the duration of the loan to assure the lender that you can legally stay in the country and repay the loan.
• Proof of income or ability to repay the loan: Demonstrating a stable income or the ability to repay the car loan is vital for loan approval. International students can provide pay stubs, employment contracts from part-time jobs, or a letter from their employer confirming their position, salary, and employment duration.
• Employment letter: If you are working, you will need a letter from your employer confirming your employment, salary, benefits, and terms of employment.
• Payment documents: Copies of your utilities, rent, phone bill, cable, medical/life insurance, etc., will be required to show your monthly costs.
• Proof of lawful presence: Documents such as a green card, driver's license, EAD card, or visa are required to prove your lawful presence in the country.
• Credit history: While some lenders do request your credit history, many understand that international students may not have one and are willing to make an exception. However, a positive credit history is essential for your financial future in the USA, impacting your ability to rent apartments, apply for credit cards, and secure other loans.
• Down payment: A down payment is commonly required for car loans, and having a sizable down payment can lead to reduced interest rates and monthly payments.
• Insurance: US law requires all drivers to have auto insurance, and you will not be able to acquire a loan without it.

Insurance and repayment options

As an international student, you will need to get auto insurance to drive in the US. US law requires all drivers to have insurance. In some states, you will not be able to apply for a driver's license without auto insurance. There are a few insurance options available to international students, and you can get auto insurance in the US without a US credit history.

When it comes to repayment, there are a few options available to international students. Some companies have special programs for international students, and there are loans specifically designed for the immigrant community in the US. You can also consider getting a co-signer with sufficient income and credit history, although this is not always necessary. It is important to compare loan options and understand the loan terms and conditions before signing.

Traditional banks and credit unions are a reliable source for car loans. Some institutions may have special programs for international students, simplifying the application process. Dealership financing is another option, but be sure to review the terms and conditions, interest rates, and any additional costs associated with this type of financing. Online lenders also cater specifically to international students, providing accessible and user-friendly financing solutions.

To qualify for a car loan as an international student, you will typically need a valid visa, proof of income, and a down payment. Lenders may also require a co-signer with a good credit history. It is important to create a budget and assess your affordability before applying for a loan to ensure that you can make the monthly payments.

Frequently asked questions