Ibrahim Gardner
International students seeking to study in the United States can apply for international student loans to finance their education. These loans are private education loans with flexible repayment terms and reasonable interest rates. To apply for these loans, most international students must have a US co-signer who is legally obligated to repay the loan in case of default. The co-signer must be a permanent US resident with good credit. However, there are also no-cosigner loan options available at a growing number of universities and colleges. Students can use loan comparison tools to find eligible loan options and choose the best lender for their circumstances.
| Characteristics | Values |
|---|---|
| Loan type | Private student loans |
| Who is it for? | International students studying in the US |
| Loan amount | Up to the total cost of education, minus other aid |
| Interest rate | Variable, depending on the benchmark and the creditworthiness of the borrower or co-signer |
| Co-signer | Usually a US citizen or permanent resident with good credit |
| Other requirements | Must attend a school in the lender's network; some loans require a residency card |
| Alternatives | Scholarships, fellowships, grants, financial aid awards |
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What You'll Learn
International student loan lenders and eligibility criteria
International students in the US have a range of loan options available to them from private lenders. While federal student loans are not available to international students, there are other options to help finance your education.
International Student Loan
International Student Loan is a loan provider that offers funding for international students. They offer loans with high enough amounts to pay for your entire education, but with extended repayment terms and reasonable interest rates. Most international students applying for loans from this provider must have a US co-signer. The co-signer is legally obligated to repay the loan if the borrower fails to pay. The co-signer must be a permanent US resident with good credit who has lived in the US for the past two years.
Study Abroad Loans
Study Abroad Loans is another loan provider dedicated to funding international students. Like International Student Loan, they also require a US co-signer.
Earnest Private Student Loans
Earnest offers loans for undergraduate and graduate borrowers, as well as loans for half-time students and parent PLUS loans. They have low-interest rates and do not charge origination or other fees. International students must apply with a co-signer who is a US citizen or permanent resident.
SoFi Student Loans
SoFi offers low average APRs for fixed and variable-rate refinance loans and does not charge origination or late payment fees. They also offer an autopay discount of 0.25% and a SoFi+ membership discount of 0.125%. International students need a co-signer to apply.
Ascent Student Loans
Ascent offers loans for undergraduate and graduate students, as well as specialty loans for MBAs, nursing school, veterinary school, medical school, dental school, and boot camps. They offer a competitive interest rate and the option to choose between fixed and variable rates. There is no origination fee, but there is a late payment fee of up to $25. International students need a co-signer to apply.
Juno
Juno is not a direct lender but acts as a broker, matching borrowers with partner lenders. They provide helpful resources and have low average APRs. International students do not need a co-signer, but those who have one will get better rates and terms.
Eligibility Criteria
The eligibility criteria for international student loans vary depending on the lender. However, most lenders require a co-signer who is a US citizen or permanent resident with good credit. Some lenders may also consider your program of study, academic performance, and future career prospects when evaluating your application. It is important to research the specific eligibility criteria for each lender before applying.
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Finding a cosigner
International students looking to apply for a loan in the USA will almost always require a cosigner. This is because most international students cannot receive credit on their own, and lenders need to evaluate the borrower's ability to pay. A cosigner is someone who guarantees that they will pay back the loan if the borrower cannot. This means that the cosigner is taking on a huge responsibility and a significant financial risk.
The cosigner must be a US citizen or permanent resident with a good credit score and income history. They must also have lived in the US for at least the past two years. Most students first look to family members to act as their cosigner, but in some cases, they may not meet these requirements. In this case, it is possible to find a loan without a cosigner. Some lenders, such as Prodigy Finance, offer alternative eligibility criteria.
If you do have a cosigner, it is important to remember that the process will go more quickly if you both complete the entire online application thoroughly. Credit approval or denial typically takes 2-6 weeks.
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Interest rates and repayment terms
International students in the US have access to private student loans, which can help cover the costs of tuition, books, transportation, and living expenses. These loans are offered by private lenders and typically require a co-signer who is a US citizen or permanent resident with good credit.
Interest rates for international student loans are typically variable, meaning they can change over time. The interest rate for a variable-rate loan is calculated using an "index" or "benchmark" rate plus an additional percentage called a "margin". The margin depends on the creditworthiness of the borrower or their co-signer.
The two most common indexes used for international student loans are the Prime Rate and the Secured Overnight Financing Rate (SOFR). The Prime Rate is influenced by the federal funds rate set by the US Federal Reserve and serves as a basis for lending rates in the market. The SOFR, on the other hand, is an overnight rate based on transactions in the Treasury repurchase market and is considered a risk-free rate. It provides a more transparent and representative view of the prevailing market conditions.
When determining the interest rate for an international student loan, the lender will consider the chosen index (Prime Rate or SOFR) and adjust the margin based on the creditworthiness of the borrower and co-signer. This ensures that the final interest rate reflects the risk associated with lending to a particular individual and takes into account the economic environment represented by the chosen index.
In terms of repayment terms, international student loans typically offer extended repayment plans to make the payments more affordable for borrowers. The specific repayment terms will vary depending on the lender, but it is common for borrowers to start repaying the loan after they graduate. It's important to carefully review the repayment terms and conditions before taking out a loan to ensure you understand your obligations and can plan your finances accordingly.
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Scholarships and other financial aid options
International students can explore several financial aid options before taking out a loan. Firstly, it is worth researching funding opportunities provided by your home country's embassy or governmental educational office, as some countries offer government-sponsored scholarships. For instance, the Institute for International Education (IIE) provides information for students with non-immigrant visas (F-1, J-1, etc.) and permanent residents of the United States.
Secondly, online scholarship search engines, such as the U.S. Department of Labor's platform, can help identify scholarships, fellowships, grants, and financial aid awards. These engines also provide insights into career and job prospects within your chosen field of study. Additionally, specific organisations like Mobility International USA offer scholarship resources for non-U.S. citizens with disabilities.
It is also beneficial to check with your college or university to see if they offer financial aid for international students. Many institutions maintain dedicated advising centres to guide students through the financial aid process. For example, Education USA advises international students on financing their education, the student visa process, and standardised testing requirements. Some public and private universities may offer financial incentives, such as waived application fees, assistantships, fellowships, and merit-based scholarships. These scholarships are often awarded based on TOEFL scores, academic records, artistic abilities, musical talents, or athletic prowess.
Furthermore, international students can utilise loan comparison tools to find the best private loan options. These tools allow students to compare interest rates, repayment terms, and other factors to make an informed decision about financing their education.
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Loan comparison tools
International students can use loan comparison tools to find the right loan option for their education in the US. These tools allow students to compare interest rates, repayment options, loan amounts, and other criteria to make an informed decision. Here are some features of loan comparison tools and suggested tools to use:
- Comparison criteria: When comparing loans, it is important to consider factors such as interest rates, loan terms, repayment options, and eligibility requirements. Some tools may also allow you to compare customer ratings and reviews to gauge the satisfaction of other borrowers.
- User-friendliness: Look for a tool that is easy to use and navigate. It should have a simple interface that allows you to input your criteria and quickly generate a list of matching loan options.
- Range of lenders: Ensure that the comparison tool includes a wide range of lenders, including banks, credit unions, and online lenders. This will give you a comprehensive view of the available loan options.
- International student-specific tools: Some websites, such as InternationalStudentLoan.com, offer comparison tools specifically designed for international students. These tools can match you with eligible loan options and provide information on no-cosigner loans, which do not require a cosigner who is a US citizen or permanent resident.
- NerdWallet: NerdWallet's loan comparison tool allows you to compare loans based on an objective, comprehensive star-rating system that assesses 43 categories and 40+ data points. They provide guidance on who can qualify for federal student loans as an eligible non-citizen.
- U.S. News: U.S. News offers a loan comparison service that includes options such as Citizens Bank, MPower Financing, and Prodigy Finance. They provide information on interest rates, repayment options, and eligibility criteria.
- Education USA: This organisation advises international students on topics like financing their education in the US. They can provide guidance on loan options, scholarships, and the student visa process.
Remember to carefully review the terms and conditions of each loan option before making a decision. Consider factors such as interest rates, repayment schedules, and any additional fees or charges. It is also important to explore other financial aid options, such as scholarships and grants, before taking out a loan.
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Frequently asked questions
International students in the USA are eligible for international student loans, which are specialized private education loans. These include fixed-rate loans, variable-rate loans, and no-cosigner loans.
The first step is to research funding opportunities from your country's embassy or the U.S. Department of Labor's scholarship search engine. Next, check with your college to see if they offer financial aid for international students. Then, use a loan comparison tool to find eligible loan options and choose the best lender for your circumstances. Finally, complete the online application with your co-signer, if applicable.
The interest rate for international student loans is based on a chosen benchmark (Prime Rate or SOFR) plus an additional percentage based on the creditworthiness of the borrower or co-signer.
