Ibrahim Gardner
International students can apply for loans in the US, but they are generally only eligible for private loans from institutions like banks, credit unions or online lenders. Most lenders require international students to have a US cosigner, who is legally obligated to repay the loan if the borrower fails to pay. This cosigner must be a US citizen or permanent resident, with good credit, income history and who has lived in the US for the past two years. International students can also explore scholarships, grants and cash payment plans as alternatives to loans, which do not need to be paid back.
| Characteristics | Values |
|---|---|
| Who can apply for international student loans? | Non-US citizens or non-citizen permanent residents attending an eligible US college or university. |
| What are international student loans used for? | Education-related expenses such as tuition, books, fees, insurance, and room and board. |
| What are the types of international student loans? | Private student loans, scholarships, and grants. |
| What are the popular private lenders for international student loans? | Banks, credit unions, or online lenders such as Citizens and MPOWER Financing. |
| What are the requirements for international student loans? | A US cosigner with good credit, an active visa, proof of enrollment, and a recent high school or undergraduate degree transcript. |
| What are the interest rates for international student loans? | Fixed or variable rates, with the Prime Rate and SOFR (Secured Overnight Financing Rate) as common benchmarks. |
| What are the repayment terms for international student loans? | Full deferral, interest-only, or immediate repayment with varying lengths, typically up to 10 years. |
| What are the alternatives to international student loans? | Cash payment plans, scholarships, and grants. |
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What You'll Learn
International students need a US co-signer
International students can apply for loans in the US, but they usually need a US co-signer with good creditworthiness to be approved. This is because international students often do not have a credit history in the US, which is required by most lenders. The co-signer must be a US citizen or permanent resident who has lived in the US for the past two years. They are legally bound to repay the loan if the borrower is unable to pay.
There are a few options for international students who cannot find a co-signer. Some lenders offer no co-signer loans to international students, although undergraduate student loans without a co-signer are more difficult to find than those for graduate students. Students can use loan comparison tools to find a lender that suits their needs and eligibility.
International students should first exhaust their options for scholarships and grants, as these do not need to be paid back. Many colleges, universities, and private organizations in the US offer scholarships specifically to international students. Completing a Free Application for Federal Student Aid (FAFSA) may also qualify international students for state or institutional aid in the form of grants and scholarships.
International students can apply for up to the total cost of education, minus other aid, as determined by their school. The loan can be used for education-related expenses such as tuition, books, fees, insurance, and room and board. Students can defer payment until 6 months after graduation as long as full-time status is maintained, or they can choose to only pay the interest while in school and defer the principal until 45 days after graduation.
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Private lenders offer international student loans
International students can apply for loans in the US, but their options are limited. The most common type of loan taken out by international students in the US is a private student loan, which comes from a third-party institution, such as a bank or credit union. Private lenders that offer international student loans include Earnest, MPOWER, Ascent, Citizens Bank, Juno, College Ave, and SoFi.
International students typically do not have a credit history in the US, so most lenders require them to have a US co-signer—a permanent US resident with good credit who has lived in the US for the past two years. The co-signer is legally obligated to repay the loan if the borrower fails to pay. However, some lenders, such as Ascent, offer both co-signed and non-co-signed loans, and others may not require a co-signer if the borrower meets specific criteria.
International students can also explore other financial aid options before borrowing money, such as scholarships, grants, and payment plans. Many colleges, universities, and private organizations in the US offer scholarships specifically to international students.
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Scholarships and grants are alternatives to loans
Scholarships and grants are great alternatives to loans for international students wishing to study in the United States. They do not need to be paid back, and there are many options available to make paying for schooling easier.
Firstly, scholarships are the main way to fund your studies in the US. There are private, institutional, and government-funded scholarships. While they are highly competitive, your chances of securing one are good if you have impressive achievements and know how to make a good application. Many universities offer their own scholarships, but private scholarships also exist. Merit-based scholarships are granted on the basis of special skills, talents, or abilities. Your university may have scholarships based on TOEFL scores, academic record, artistic ability, musical ability, or athletic ability. Need-based scholarships, on the other hand, are awarded based on financial need.
Many colleges, universities, and private organizations in the United States offer scholarships specifically to international students, so be sure to check with your school of choice. In many cases, institutional scholarships do not even require a separate application, so you may be automatically considered when you are approved for your program of study. You can also use a free platform like FastWeb to find scholarship options for which you could apply.
Secondly, grants are available to international students in the United States from any number of private programs and fellowships. You can find grants on searchable databases of scholarships, fellowships, and other financial aid opportunities, such as the College Board, which is sponsored by the U.S. Department of Labor.
Finally, it is worth noting that completing a Free Application for Federal Student Aid (FAFSA) may still be recommended for international students because this application could qualify you for some state or institutional aid in the form of grants and scholarships. However, FAFSA is only granted on a few occasions to international students. To apply for this aid, you need a Social Security Number or an Alien Registration Number.
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Interest rates vary between fixed and variable
International students applying for loans in the US usually need a US cosigner. The cosigner must be a permanent US resident with good credit who has lived in the US for at least the past two years.
Variable-rate student loans usually offer lower starting interest rates than fixed-rate student loans in a low-interest or low-inflation market. However, in a high-interest or inflationary environment, variable-rate loans often have similar or even higher interest rates than fixed-interest loans. Variable interest rates go up and down based on the Federal Reserve interest rate and other benchmarks like the London Interbank Offered Rate (LIBOR) or SOFR. If inflation goes up, so does your interest rate. Your decision on what type of interest rate to seek on a private student loan will depend on whether you feel comfortable with some risk.
Federal student loans always have fixed interest rates, set by Congress and static for the life of the loan. The fixed interest rate for federal student loans is calculated by taking the 10-year Treasury note high yield and adding an add-on percentage that varies depending on the type of loan. For instance, for direct subsidized and unsubsidized undergraduate loans disbursed between July 1, 2023, and July 1, 2024, the add-on rate was 2.05%. Private student loan lenders also offer fixed rates, but they set their own rules for calculating these rates, so it's important to shop around for the best interest rate.
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Loan approval can be used for student visas
International students applying for loans in the US usually need a US cosigner. This is because international students often cannot receive credit on their own, as they do not have a credit history in the US. The cosigner must be a US citizen or permanent resident with good credit, an income history, and must have lived in the US for at least two years. They are legally obligated to repay the loan if the borrower fails to do so.
However, some lenders will not require a cosigner if the borrower meets certain criteria, such as attending an eligible school, demonstrating high career potential, and planning to graduate within the next two years.
In terms of visa applications, having a temporary US address is likely a requirement for the loan application instead of using a permanent international address. In some cases, students can use their loan approval as proof of funds to obtain a student visa and enrol in school. However, this is dependent on the school and the consular officer.
International students can apply for up to the total cost of education, minus other aid, as determined by their school. Students can borrow up to their school's total cost of attendance, which includes tuition, room and board, books and supplies, personal expenses, and transportation.
There are various private student education loan lenders that can provide educational funding for international students. It is important to compare lenders and pay attention to fixed vs. variable interest rates and borrowing limits.
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Frequently asked questions
Yes, international students can apply for private student loans in the US. However, they usually need a US citizen or permanent resident to co-sign the loan.
The co-signer must be a US citizen or permanent resident with good credit and income history. They must have lived in the US for at least the past two years.
Some lenders, such as MPOWER Financing, offer international student loans that don't require a co-signer or collateral. Alternatively, international students can explore scholarships, grants, and cash payment plans.
The interest rate for international student loans is usually variable and based on an "index" plus a margin. The most common indexes used are the Prime Rate and the SOFR (Secured Overnight Financing Rate).
International students can borrow up to the total cost of education, minus any other financial aid. The exact amount will depend on the lender's borrowing limits and the student's school-certified cost of attendance.
