Lori Meadows
International students can obtain loans in the US to help with college expenses, but they are different from the loans offered to Americans. International students only have access to specialized private education loans while studying in the United States, and they often require a co-signer with an excellent credit score who is legally obligated to repay the loan if the borrower defaults. However, there are lenders like MPOWER Financing that offer international student loans without a cosigner or collateral. Aside from loans, international students can also explore scholarships, grants, cash payment plans, and work-study programs to finance their education.
| Characteristics | Values |
|---|---|
| Who can get a loan? | Non-US citizens studying in the US, US students studying abroad, and Canadian students studying in the US |
| Requirements | A cosigner with good credit who has lived in the US for the past two years, a permanent resident, or a US citizen |
| Interest rates | Variable rates based on the creditworthiness of the borrower or their cosigner, with the Prime Rate and Secured Overnight Financing Rate (SOFR) as the most common indexes |
| Repayment period | Generally ranges from 10-25 years, depending on the loan amount |
| Loan amount | Up to the total cost of attendance, including tuition, room and board, transportation, books, supplies, health insurance, and other expenses |
| Application process | Online applications are available, and initial credit approval or denial can take 2-6 weeks |
| Lenders | NerdWallet, College Ave, Ascent, Citizens, Earnest, RISLA, SoFi, MPOWER, International Student Loan, Study Abroad Loans |
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What You'll Learn
International student loans in the US
International student loans are a realistic way to finance your education in the US. They can cover up to the total cost of school, including tuition, room and board, books, travel, health insurance, and living expenses. However, international students have fewer loan options than US borrowers. Unless you are an eligible non-citizen who can qualify for federal student loans, you will need to borrow from a private lender.
Most international students applying for loans must have a US cosigner. The cosigner is legally obligated to repay the loan if the borrower defaults. They must be a US citizen or permanent resident with good credit who has lived in the US for at least two years. The cosigner is often a close friend or relative. If you cannot find a cosigner, no-cosigner loans are available to international students at select colleges and universities.
The interest rate on your loan will depend on the chosen benchmark (Prime Rate or SOFR) and an extra percentage based on the creditworthiness of the borrower or their cosigner. The repayment period typically ranges from 10 to 25 years, but the larger the loan, the longer the repayment period. It is important to consider how much the monthly payments will be, when payments will begin, and how long you may be able to defer paying back the loan.
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International student loans in Canada
International students can get loans to study in Canada, but they are typically private loans. The Canadian government provides loans for students, but these are usually limited to Canadian citizens or permanent residents.
To qualify for a private student loan in Canada, you generally need to be enrolled at a Canadian school that is already approved by a lender. The lender will look at your academic success and career path, not your credit history or that of a co-signer. They may also take into account your home country, your expected graduation date, and the school you are attending.
International students can apply for a private student loan without a cosigner if enrolled at select Canadian institutions. The primary loan source for international students is through a private lender, and each lender will have its own requirements and rules on eligibility.
When applying for a student line of credit, the bank will assess your level of education, academic institution, living costs, and other factors to determine your credit limit. With a private lender, you could borrow between $2,000 and $50,000, with interest rates of 3.00% to 46.00% APR. Terms can last about 1 to 7 years, allowing upfront payment of your education, with a repayment schedule over time.
International students may also want to explore scholarships, as these do not need to be paid back. Various scholarships are available, including the Study in Canada Scholarship offered by Global Affairs Canada. Most schools also offer scholarships for international students.
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No-cosigner loans
International students often require a cosigner with a good credit history who has lived in the US for at least two years. However, no-cosigner loans are available to international students at select colleges and universities in the US and Canada.
To apply for a no-cosigner loan, you can use a loan comparison tool to see if you're eligible to apply for a loan without a cosigner. You can then research the terms and conditions of the loan and apply directly through the lender.
If you're an international student in Canada, you may be able to apply for a no-cosigner loan at select Canadian schools.
In addition to meeting the basic qualifications, you'll also need to pass the lender's underwriting review. Lenders have varying loan eligibility requirements, and your approval, loan amount, and interest rates can depend on your credit history and score in the US, if you have one, as well as your family's financial statements, if they're planning on supporting you during your studies.
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Interest rates and repayment options
International students may struggle to find a cosigner, but having one can increase the chance of loan approval and potentially lower interest rates. A cosigner must be a US citizen or permanent resident with a good credit score and steady income. Without a cosigner, international students may still be eligible for loans, but the interest rates may be higher.
Repayment options vary depending on the lender. Some common options include full repayment while enrolled, interest-only repayment while enrolled, and deferred repayment, where payments begin after graduation. The repayment period typically ranges from 10 to 25 years, and interest accrues until the loan is paid off.
It is important to carefully consider the costs and benefits of different loan options and choose the one that aligns with your financial goals and circumstances. Additionally, exploring alternative options such as scholarships, grants, or part-time work can help reduce reliance on loans.
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Eligibility criteria
International students can get loans to fund their education in the US, but their options are more limited than those of US borrowers. Eligibility criteria for international student loans vary depending on the lender, but here are some general criteria to consider:
Citizenship and Residency
To be eligible for international student loans in the US, you must be a non-US citizen or non-US permanent resident. Some lenders may require you to have a valid visa, such as an F1 Visa, to study in the country. Additionally, most lenders will require you to have a cosigner who is a US citizen or permanent resident with a good credit history and who has lived in the US for at least two years. A cosigner is someone who joins you on your loan application and is equally responsible for making payments if you, as the primary borrower, are unable to. However, a growing number of universities and colleges are offering no-cosigner loans, so it is worth checking with your institution to see if this option is available to you.
Education-Related Expenses
International student loans are typically intended to cover education-related expenses, including tuition fees, room and board, books, insurance, and other living expenses. The loan amount can be up to the total cost of attendance, as determined by your school, minus any other financial aid received. To determine your maximum loan amount, you will need to contact your school's financial aid office.
Interest Rates and Repayment Options
The interest rate for an international student loan is usually determined by a chosen benchmark (such as the Prime Rate or Secured Overnight Financing Rate) plus an extra percentage based on the creditworthiness of the borrower or their cosigner. Repayment options vary, but it is important to consider how much the monthly payments will be, when payments will begin, and how long you can defer repayment. The repayment period can range from 10 to 25 years, depending on the loan amount.
School and Program Eligibility
International student loans are often restricted to students attending approved schools or programs. You will need to ensure that your chosen institution and course of study are eligible for the loan you are applying for. Additionally, some lenders may require you to complete the College Board's Certification of Finances form to attest that you have the funding available to cover the costs of your program.
It is important to carefully review the eligibility criteria and loan details of each lender to ensure that you meet the requirements and choose the loan that best suits your needs.
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Frequently asked questions
Yes, international students can obtain loans in the US to help with college expenses. However, these loans are different from those offered to Americans. International students can only access specialised private education loans while studying in the US.
Most international student loan applications require a US co-signer. The co-signer is legally obligated to repay the loan if the borrower defaults. They must be a US permanent resident with good credit who has lived in the US for at least two years. If you cannot find a co-signer, some lenders may still work with you.
International student loans can be used for education-related expenses, including tuition, books, fees, insurance, and room and board. You can apply for up to the total cost of education, minus any other financial aid.
Repayment terms vary depending on the loan option chosen. The repayment period typically ranges from 10 to 25 years, with shorter terms resulting in higher monthly payments and longer terms lowering monthly payments but increasing overall interest. Some lenders may require immediate repayment, while others may allow deferment until six months after graduation.
