Ibrahim Gardner
International student loans are a realistic way to finance your education in the US or Canada, and are available to non-US citizens studying at a college or university in the United States. International students are not eligible for federal student loans, but they are eligible for international student loans, which are specialized private education loans. Most international students applying for loans will need a US co-signer, who is legally obligated to repay the loan if the borrower defaults. The co-signer must be a US citizen or permanent resident with good credit, and has lived in the US for the past two years. However, there are some no-cosigner loans available to international students. Students can borrow up to their school's total cost of attendance, minus any other aid received.
| Characteristics | Values |
|---|---|
| Who can apply? | Non-US citizens studying in the US |
| Who cannot apply? | US citizens, permanent residents, and federal student loan recipients |
| Cosigner requirements | Needed in most cases; must be a US citizen or permanent resident with good credit history and a minimum income of $24,000 |
| Cosigner alternatives | No-cosigner loans are available for international students attending select colleges and universities |
| Loan amount | Up to the total cost of education, minus other financial aid received |
| Interest rates | Variable, depending on the benchmark used, creditworthiness, and loan term |
| Repayment options | Full deferral, interest-only, or immediate repayment |
| Repayment period | Typically 10-25 years, with options for deferral up to four years |
| Application process | Submit an application, receive initial approval, and then disbursement of funds by the school |
| Comparison tools | Loan comparison tools are available to match students with eligible loan options |
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What You'll Learn
Understanding loan options and eligibility
International student loans are a realistic way to finance your education in the US. These loans are specialized private education loans available to international students studying in the US. They are flexible and can offer loan amounts high enough to pay for your entire education, but with extended repayment terms and reasonable interest rates.
Most international students applying for loans will require a US co-signer. A co-signer is legally obligated to repay the loan if the borrower defaults. The co-signer must be a US citizen or permanent resident with good credit and a good income history, who has lived in the US for at least two years. The co-signer is often a close friend or relative who can assist in getting credit, as most international students cannot receive credit on their own.
If you are unable to get a co-signer, some lenders will still offer you a private loan, but the interest rates may be higher. These lenders will consider your program of study, academic performance, and future career prospects when evaluating your application.
International students in the US are not eligible for federal loans. However, there are other financial aid options to explore before taking out a loan. These include scholarships, grants, and financial aid from your school. You can use the US Department of Labor's scholarship search engine to identify scholarships, fellowships, grants, and financial aid awards. You can also research funding opportunities from your country's embassy or governmental educational office.
There are also loan comparison tools available online to help you find the best loan option for your circumstances.
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Finding a co-signer
International students often need a co-signer because they may not have any US credit history, which can make it difficult to get approved for a loan. A co-signer is someone who agrees to share the legal responsibility of repaying a loan with another borrower. This individual, typically a family member or close relative, helps lower the lender’s risk by providing additional financial security for the loan.
When selecting a co-signer for an international student loan, consider the following criteria: The co-signer’s credit score should ideally be 650 or higher to secure favourable loan terms. A stable and consistent income reassures lenders that the co-signer can cover repayments if necessary. Choosing a parent, guardian, or another trusted family member ensures accountability and trust. The co-signer must fully understand the financial and legal implications before agreeing to the commitment.
If you are evaluating your international student loan options, you should plan in advance and figure out your approach to finding the right co-signer for your loan. A co-signer can be anyone who meets the general requirements and is willing to co-sign your loan. Your co-signer should have a social security number, current address and phone number, references, and employment information. They must also be a US citizen or permanent resident.
If you are unable to find a co-signer, there are lenders that offer no-co-signer loans. These loans are typically granted based on the student's academic qualifications, university reputation, and potential future earnings. Many international students reduce their financial burden through scholarships and grants, which do not require repayment.
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Interest rates and repayment plans
Most international students applying for loans in the US will require a US co-signer with good credit history, who is legally obligated to repay the loan if the borrower defaults. A co-signer can help secure a lower interest rate and improve the chances of loan approval. However, it is possible to obtain a loan without a co-signer, and some lenders, such as Juno, offer competitive rates for international students without a co-signer.
Repayment plans can also vary depending on the lender and the loan selected. Common repayment plan options include full deferral, interest-only, and immediate repayment. With full deferral, students can defer payment of both interest and principal until six months after graduation, as long as they maintain full-time status. The maximum deferral period is usually four years, the typical length of an undergraduate degree. With the interest-only option, students pay only the interest while in school, up to four consecutive years, and can defer the principal until 45 days after graduation. Immediate repayment plans require payments on both interest and principal to begin immediately once the loan is disbursed.
It is important for international students to carefully consider their repayment options and understand the consequences of defaulting on their loans. Creating a financial plan before committing to a loan can help students stay responsible with their loan obligations and avoid negative impacts on their credit score.
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Scholarships and other funding sources
Scholarships and Grants:
Scholarships and grants are a great way to fund your studies as they do not need to be repaid. Various organizations offer scholarships specifically for international students. For example, the Joint Japan/World Bank Graduate Scholarship Program provides comprehensive financial coverage for students from developing countries pursuing development-related Master's programs. MPOWER Financing offers scholarships for international and DACA students through their Global Citizen Scholarship Program, and the P.E.O. International Peace Scholarship awards scholarships to women from other countries pursuing graduate degrees in the USA.
You can search for scholarships using online databases such as International Student, eduPASS, IEFA, and Fastweb. These platforms provide comprehensive information on grants, scholarships, and loan programs for international students. Additionally, some universities may offer scholarships specifically for international students, so be sure to check with your chosen institution.
Financial Aid from Your School:
Many schools offer financial aid packages to international students, which may include grants, scholarships, or work-study programs. Contact your school's financial aid office to inquire about available aid and how to apply.
Private Education Loans:
International students are typically eligible for private education loans, which can help cover the cost of tuition, room and board, transportation, books, and other expenses. These loans are offered by private lenders and often require a cosigner who is a US citizen or permanent resident with good credit. The cosigner is legally obligated to repay the loan if the borrower fails to do so.
Family Funds and Personal Savings:
According to the Institute for International Education (IIE), nearly 60% of international students' tuition and fees in the US during the 2022-23 academic year were paid for using personal and family funds. While it may not be a primary source of funding, it is important to consider your own financial resources and how they can contribute to your education.
Remember to carefully evaluate your financial situation and the cost of your desired program before applying for loans. Utilize the available resources, such as loan comparison tools, to make an informed decision about your funding options.
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Applying for the loan
Applying for an international student loan can be a complex process, so it's important to understand the steps involved. Here's a detailed guide to help you navigate the process:
Evaluate Your Financial Needs
Before applying for any loan, it's crucial to assess your financial situation and determine the amount you need to borrow. Calculate the total cost of attendance, including tuition, room and board, transportation, books, supplies, health insurance, and any other relevant expenses. Subtract any financial aid, scholarships, or personal funds you've secured to find the remaining gap.
Choose the Right Loan
Research and compare different loan options to find the one that best suits your needs. Consider factors such as interest rates, repayment terms, loan amounts, and eligibility requirements. Use online loan comparison tools to explore options from various lenders and identify the most favourable terms.
Understand the Requirements
International student loans typically have specific requirements. Most loans for non-US citizens will require a US co-signer with good credit who is a permanent resident and has lived in the US for at least two years. A co-signer is legally obligated to repay the loan if you, as the primary borrower, fail to do so. If finding a co-signer is challenging, explore no-co-signer loan options offered by some lenders and colleges.
Gather Necessary Documents
Prepare the documentation required for your loan application. This may include proof of identity, acceptance letters from your chosen college or university, financial statements, and any other relevant information requested by the lender. Ensure you have all the necessary paperwork in order to avoid delays in the application process.
Complete and Submit the Application
Fill out the loan application form accurately and completely. Provide all the required information, including details about your educational programme, financial situation, and co-signer (if applicable). Review your application carefully before submitting it to ensure all information is correct and consistent.
Await Approval
After submitting your application, the lender will review it and determine whether to approve your loan request. Initial approval can take days or weeks, depending on the lender. Once approved, your school will certify the loan amount, and the funds will be disbursed accordingly.
Remember to carefully review the terms and conditions of your loan before finalising any agreements. Understanding the repayment schedule, interest rates, and any associated fees will help you make an informed decision about your loan.
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Frequently asked questions
The first step is to research funding opportunities from your country’s embassy or governmental educational office to see if there are applicable scholarships. You can also use a scholarship search engine to identify scholarships, fellowships, grants and financial aid awards.
A cosigner is a person who is legally bound on a loan application to pay the outstanding debt in case the applicant is unable to pay. Most international students applying for loans in the US must have a US cosigner, who is usually a close friend or relative. However, there are some loans that do not require a cosigner, so it is worth checking if one of these loans would be suitable for you.
You can apply for up to the total cost of education, minus any other financial aid you receive. The total cost of attendance includes tuition, room and board, books and supplies, personal expenses, and transportation.
