Janice Lozano
International students can get loans, but the process can be challenging due to their lack of credit history and citizenship status. In the United States, international students often require a co-signer who is a US citizen or permanent resident with good credit. Some lenders may not require a co-signer if the student meets specific criteria, such as attending an eligible school or demonstrating high career potential. International students can also build their credit history over time, which may allow them to refinance private student loans at lower interest rates. Additionally, they can apply for credit cards, which can serve as a tool for establishing a credit history. Comparing loan features and interest rates is crucial for international students to make informed financial decisions.
| Characteristics | Values |
|---|---|
| International student loans | Available year-round and can cover up to the total cost of school minus any other financial aid received |
| Interest rates | Variable, depending on the creditworthiness of the borrower or their co-signer |
| Co-signer | A co-signer is legally obligated to repay the loan if the borrower fails to pay. The co-signer must be a permanent US or Canadian resident with good credit who has lived in the country for the past two years. |
| No co-signer loans | Available at a growing number of universities and colleges |
| Credit cards | International students can get credit cards, but they'll likely need an ITIN or someone who'll let them become an authorized user on their card. |
| Part-time job | Depending on the student visa, a part-time job may qualify an international student for an SSN and proof of income for getting a credit card |
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What You'll Learn
International student loans without a cosigner
International students often face challenges in securing loans for their education, as they are typically required to have a creditworthy cosigner who is a US citizen or permanent resident. However, there are a few options for international student loans without a cosigner.
Firstly, it is important to note that international students can only obtain private loans, as federal loans are not available to non-citizens. These private loans are offered by non-government lenders, and only a select few offer loans without a cosigner. To find these lenders, students can use loan comparison tools available on websites such as internationalstudentloan.com and iefa.org. These tools allow students to input their information, such as citizenship and school, to find eligible lenders that offer loans without a cosigner.
When considering a private loan without a cosigner, it is crucial to research the terms and conditions of the loan, including interest rates, repayment terms, and eligibility requirements. Websites like NerdWallet recommend comparing loan features and interest rates to find the most favourable option. Additionally, students should be aware of any fees associated with the loan, such as origination, prepayment, or late fees.
While most lenders require a cosigner due to the lack of credit history of international students, some lenders are willing to evaluate other factors. For instance, lenders offering no-cosigner loans may consider the student's academic success, career path, home country, graduation date, and the school they attend. MPOWER Financing is one such lender that focuses on the student's future potential, academic merit, and university reputation rather than their financial history or collateral. Their loan packages range from US$2,001 to US$100,000 and are available to students from over 200 nationalities enrolled in more than 500 schools across the US and Canada.
In conclusion, while it may be challenging for international students to obtain loans without a cosigner, there are options available. By using loan comparison tools, researching loan terms and conditions, and considering lenders who evaluate factors beyond credit history, international students can secure the funding they need for their education.
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Getting a credit card as an international student
International students can get credit cards, but it may be challenging without a credit history or Social Security Number (SSN). Here are some options for getting a credit card as an international student:
Get an Individual Taxpayer Identification Number (ITIN)
If you don't have an SSN, you can request an ITIN from the Internal Revenue Service (IRS). Some credit card issuers will accept this number for a credit card application.
Become an Authorized User
If you know someone willing to let you become an authorized user on their card, you can gain access to credit this way. The primary cardholder should understand that they are chiefly responsible for any debts you accrue.
Get a Part-Time Job
Depending on your student visa, you may be able to secure part-time employment, which will qualify you for an SSN and serve as proof of income for getting a credit card.
Student Credit Cards
Student credit cards are designed with students' needs in mind and offer rewards on popular spending categories like dining, entertainment, and streaming services. They often have lower barriers to entry, so you may qualify with limited or no credit history. However, you'll likely need a steady income and plan to stay in the country for an extended period.
Secured Credit Cards
A secured card is backed by collateral, usually a security deposit from the cardholder, which serves as the card's credit limit. This can be an excellent tool for building credit over time as you establish a credit history in the country.
Prepaid Cards
With a prepaid card, you don't need a bank account, as you load funds directly onto the card whenever needed, similar to a gift card.
Find a Co-Signer
Most international students need a co-signer who is a US citizen or permanent resident with good credit and income history. The co-signer agrees to be jointly responsible for repaying the loan if you fail to pay.
Compare Loan Options
Use online tools to compare loan options and find the best rates and terms for your circumstances. International student loans can help make a US education more accessible, but be sure to understand the interest rates and repayment terms before committing.
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International student loan interest rates
International students often have fewer lenders to choose from compared to domestic students. When it comes to interest rates, there are a few things to consider. Firstly, it is important to check whether the interest rate is variable or fixed. Variable rates may initially be lower but can change from year to year, whereas fixed rates will remain the same throughout the repayment period.
Some lenders require a cosigner who is a US citizen or permanent resident with good credit and income history. A cosigner agrees to be jointly responsible for the repayment of the loan if the borrower fails to pay. MPower Financing is one lender that does not require a cosigner or credit history and offers rate discounts, with interest rates as low as 9.99% (11.16% APR). Prodigy Finance is another lender that provides loans to international students without a cosigner, but they only lend to graduates.
If you are an international student in the US, you can build your credit score over time, which may allow you to refinance private student loans to a lower interest rate. This usually requires a solid income, a credit score of 690 or higher, and a history of timely debt payments.
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Federal loans for international students
International students in the US often require additional financial aid to support their educational studies. While international students cannot get federal student loans from the US government, there are still options to help pay for higher education.
Private student loans
Private student loans are available to international students to help cover costs while studying at college in the US. Prodigy Finance is the only private lender that will refinance student loans for international working graduates in the US. Private student loans are offered by lenders that provide loans to international students. Most private student loan lenders require that you apply with a cosigner who is a US citizen. This is because most students have limited income and little to no credit history. A cosigner is a person who can legally sign loan papers or documentation to help the other person obtain a loan. The cosigner must be a US citizen or permanent resident with a good credit and income history and who has lived in the US for the past two years.
Scholarships, grants, and financial aid
There are options for financial aid, scholarships, and grants for international students. The Free Application for Federal Student Aid, or FAFSA, is intended for US citizens and certain eligible noncitizens to determine what financial aid they can receive from the federal government or schools. While international students are not eligible for federal aid from the FAFSA, it is still important to file the form as some schools may require it to determine where you can receive aid from.
Compare loan features
It is important to compare loan features when considering a private loan. Note whether the lender will postpone payments if you have trouble paying them and for how long. Find out if there are origination, prepayment, or late fees, and how easily you can reach the lender by phone, email, or live chat if you encounter a billing or customer service issue. Opt for a fixed interest rate that won't increase over time instead of a variable interest rate. Use a student loan calculator to see what kind of payment you’ll face after borrowing for multiple years.
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How to refinance international student loans
International students can consider refinancing their student loans to reduce their financial burden. Here are some ways to go about it:
Build Your Credit:
If you plan to stay in the U.S., building a credit profile can help you refinance private student loans at a lower interest rate. You will need a solid income, a credit score of 690 or higher, and a history of timely debt payments.
Refinance with a Co-signer:
If you have a co-signer who meets the above qualifications, you may be able to refinance your loan. The co-signer must be a U.S. citizen or permanent resident with good credit and income history, and they must have lived in the U.S. for at least the past two years.
Private Refinancing:
Consider private lenders that specialize in refinancing student loans for international students, such as Prodigy Finance and MPOWER Financing. MPOWER Financing offers loans without requiring a co-signer or collateral, and they will report your payments to credit bureaus, helping you build a credit history.
Compare Loan Features:
Compare private international loan offers to get the lowest interest rate you qualify for. Opt for a fixed interest rate that won't increase over time. Find out about origination, prepayment, or late fees, and how accessible the lender is for customer service.
Loan Comparison Tools:
Use loan comparison tools, such as those offered by internationalstudentloan.com, to find eligible loan options that match your citizenship and school. These tools allow you to compare terms and conditions and choose the best lender for your circumstances.
No-Cosigner Loans:
Some universities and colleges offer no-cosigner loans to international students. You can check your eligibility for such loans and apply directly to the lender that suits you best.
Refinancing Federal Loans:
While refinancing federal loans can provide benefits, consider that federal loans have advantages for borrowers facing financial distress. Think carefully and consult a trusted advisor before refinancing government loans.
It is important to note that refinancing options may vary depending on your location and specific circumstances. Be sure to research and compare available options before making any financial decisions.
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Frequently asked questions
A line of credit is a type of loan that allows you to borrow money up to a certain limit. It can be used to finance education-related expenses such as tuition, books, fees, insurance, and room and board.
International students can get a line of credit, but it may be more difficult compared to domestic students. Most international students need a co-signer who is a US citizen or permanent resident with good credit. However, some lenders may not require a co-signer if the student meets specific criteria, such as attending an eligible school and demonstrating high career potential.
International students can increase their chances of getting a line of credit by building their credit profile, having a part-time job, or using a loan comparison tool to find lenders that do not require a co-signer. They can also consider private lenders like Prodigy Finance, which offers refinancing for international working graduates in the US.
