The US has some of the most expensive universities in the world. And while taking on student debt is about as American these days as baseball or nacho cheese, your student loan options are limited if you’re an international student.
How does borrowing for school work for international students?
If you’re an international student, borrowing for school is a lot like it is for a US citizen or permanent resident. You can typically apply online either with or without a US citizen as a cosigner. Some lenders consider you and your cosigner’s credit history, while others might look at your academic standing, personal finances and earning potential.
Student loan providers send the funds directly to your school, while personal loan providers transfer the money to your US bank account. The whole process can take between a few days to a few months — it’s best to get started early. With student loans, you typically have a six-month grace period after you graduate before you need to start paying back your loan.
Am I eligible for an international student loan?
It depends on which option you choose. In most cases, you’ll need to have a US visa to qualify for any loan, even with a cosigner. If you’re applying for a student loan, you’ll likely need to be accepted to your school before you start the application, though your school won’t receive the funds until after you enroll.
If you’re applying with a cosigner, make sure they meet the lender’s eligibility requirements, especially the credit score and income minimums. If you’re applying alone, you typically need to have good grades — often above a 3.0 — to qualify for the most competitive rates.
What student loans are available for international students?
International students have three main options when it comes to borrowing for school:
Option 1: Private student loans with a cosigner
- Best for: International students with a relative or close family friend that’s a citizen or permanent resident.
While not as inexpensive as federal loans, private student loans are generally your next best option. While most have income and credit score requirements, many allow you to apply with a cosigner to meet those requirements. However, not all accept nonresidents, even with a cosigner. Reach out to your lender to make sure you’re eligible before you apply.
Option 2: International student loans without a cosigner
- Best for: International students without US relatives and a strong academic record.
If you don’t know anyone willing to cosign a private student loan, consider student loans specifically for international students. While your options are even more limited in this category, you typically don’t need a US credit score or even a Social Security number to get approved. Instead, lenders look at factors like your academic record, major and earning potential when reviewing your application. You might not be eligible if you’re a first- or second-year undergraduate, however.
Rates and terms for international student loans are typically higher than what you’d find with private student loans — but not by much. They also might come with an origination fee between 1% and 5% of the loan amount, which you pay after you accept the terms and conditions. Most private student loans don’t come with fees unless you’re late on a repayment.
Option 3: Personal loans for international students
- Best for: International students with expenses that a student loan doesn’t cover.
If you need funds to cover costs outside of school — like buying a car or relocating — a private student loan isn’t going to cover you. Instead, you might want to consider a personal loan. Here you have two options: You can go with a provider that accepts international students with or without a cosigner, or you can apply for a personal loan specifically made for international students.
You usually can’t use your personal loan to pay for educational expenses if you borrow from a standard personal loan provider like SoFi. But you often can if you apply for a loan specifically for international students. Like with private student loans, it’s not always clear if personal loan providers accept international students, even with a cosigner, so you might need to reach out to make sure you’re eligible.
Unlike with student loans, repayments on personal loans start right away. A personal loan from your standard provider can also have shorter terms, giving you monthly repayments that may be difficult to afford while you’re in school.
Compare personal loans for students
Are there scholarships and grants for international students?
Yes, you may be able to find scholarships and grants designed specifically for international students studying in the US. Aside from asking your school’s financial aid office, you might also want to search for funding from nonprofits, corporations and private and government organizations that support international students.
Many foundations and private companies also offer financial aid to students of a particular heritage — like scholarships geared toward Hispanic and Latinx students — regardless of whether you’re a US citizen or not.
You can compare your options with our guide to scholarships for international students.
How to apply for a student loan as an international student
After you’ve been accepted to a program, these are the steps you can expect when applying for a student loan as an international student in the US.
Step 1: Check your visa status
As we mentioned before, you’ll typically need to already have a student visa to apply for a student loan, even with a cosigner. Some international student loan providers like Mpower can help you with your application if you’re renewing your visa. Other lenders like SoFi might require you to have at least two more years left on your visa to qualify.
While you might not want to necessarily renew your visa right away, knowing your visa status and how long you have left on it can help you figure out which loans you’re eligible for.
Step 2: Compare lenders
Start by looking at all of your options: Private student loans, international student loans and personal loans. Pay particular attention to eligibility requirements. If a lender you’re interested in doesn’t mention whether international students are eligible, reach out and ask. Some lenders also don’t offer loans in every US state, so make sure it’s available in yours before you apply.
Look at a few features when you’re comparing your options:
- APRs. The APR is the easiest way to compare the cost of a loan with similar terms. It’s an expression of the interest rates and fees as a percentage — but it doesn’t include optional fees like late payment or nonsufficient funds charges. Keep in mind that the lowest rates might not be available to international students.
- Loan terms. A longer loan term can make your loan more expensive — giving it more time for interest to add up. But it can also make monthly repayments more affordable. If you’re applying for a personal loan, you might want to consider a lender that offers longer loan terms and no prepayment penalties, so you can pay what you can afford while in school and repay it early once you have a higher-paying job.
- Fees. Most private student loans don’t have any application or origination fees, though many personal loans and international student loans do.
- Loan amounts. Private student loans typically cover up to 100% of your school-certified costs — usually more than just your tuition and fees. However, many have a minimum of around $5,000.
Step 3: Apply for your loan
These days, you can usually apply for a loan online, though a handful of banks and credit unions still ask you to visit them in person. If you’re applying with a cosigner, they’ll either complete the application with you or receive emailed instructions to complete it separately. Typically, you’ll need the following information for your application:
- Financial aid information. Your lender typically asks how much you’ve already received in financial aid. It also might ask about your school’s tuition, housing and meal-plan costs, health insurance and other bills related to being a student at the university.
- General enrollment information. Your lender typically wants to know the start and end date of the period you’re applying for, and your expected graduation date.
- Personal information. This can include your address at home and in the US, information about your visa and a contact number.
- Financial information. Lenders often ask to see a few recent bank statements and information about any other loans or credit cards you already have.
Step 4: Wait for your lender to verify the costs and disburse the funds
Most student loan providers reach out to your school to make sure you’re eligible to borrow the amount you’re applying for. If your school says you aren’t eligible for that amount, you could end up receiving less. After your lender verifies the amount, your lender and school often agree on a date to send the money.
Step 5: Collect remaining funds from the financial aid office
If you have any money left after tuition and fees, you collect it from your school’s financial aid office. Typically, they’ll send you an email letting you know how much you’ll get back. If you change your mind and decide you don’t need those funds, you often have an option to send it back to the lender without any charge.
Are international students eligible for FAFSA?
You can’t get federal student aid if you’re on an F-1 student visa. There are several types of noncitizens that are eligible for federal student aid, however, including:
- Permanent residents
- US nationals
- Refugees
- Asylum grantees
- Cuban-Haitian entrants
- Conditional entrants (if you entered before April 1, 1980)
- Parolees (if you’ve been paroled for at least one year and can prove you intend to become a US citizen or permanent resident)
- Anyone with a T visa
- Children of T-1 visa holders
- Battered immigrant-qualified aliens
- Children of battered immigrant-qualified aliens
- Citizens of Micronesia, the Marshall Islands or Palau (some restrictions apply)
Don’t meet any of these criteria? You’ll have to look at other options.
One potential option is financial aid from the school you’re attending. To see if you qualify, you can fill out your school’s International Student Financial Aid Application (ISFAA).
What happens after I graduate?
Nothing changes if you have a personal loan or opt to start making repayments right away on a private student loan. If you deferred your repayments or signed up for reduced repayments, you’ll typically have six months before you’ll need to start making full repayments. How this works depends on where you end up after you graduate.
Paying it off in the US
If you got a job in the US and have decided to stay for a while, paying off your student loans is simple. Consider setting up autopay with your checking account so you don’t have to worry about making a payment each month.
If you become a permanent resident after a few years, consider refinancing your student loan. As long as you’ve made your repayments on time, you should have a stronger credit history and could qualify for more favorable rates and terms with refinancing.
Or, if you applied with a cosigner and want to keep your original rates and terms, you might want to apply for cosigner release if it’s an option. This way the loan will be in your name alone.
Paying it off from abroad
Paying off your student loan from abroad is trickier. If you decide to pay off your loan from a foreign bank account, it can take more than 30 days for the repayment to transfer and it usually comes with a hefty fee. It’s not ideal, but there are a few ways around it.
If you still have a bank account in the US, consider transferring funds in bulk to that account to pay off your student loan. Or have a relative in the US pay off the loan for you and reimburse them by money transfer — sometimes you can even send money overseas for free. But an easier way to do this is to take out a new loan in your country’s currency to pay off your US student debt — in other words, refinance it from home.
Refinancing an international student loan in the US
Paying off a student loan from back home while you’re living in the US is just as complicated. If you just became a permanent resident or plan on being stateside for the foreseeable future, you might want to consider refinancing your student loan so you won’t have to worry about paying off debt abroad.
Unfortunately, not all student loan refinancing options work with foreign debt — many pay off the lender directly. However, some lenders like Stilt offer personal loans that you can use to pay off debt. It’s not the most common way to use a personal loan — or even student loan refinancing — so make sure to reach out to the lender to make sure you’re eligible.
Bottom line
It’s not easy to find financing as an international student, but it’s not impossible. While more options are open to you if you have a cosigner, it’s not absolutely necessary. Or, if you’re curious about your loan options after you graduate, you might want to read our article on personal loans for nonresidents.
Frequently asked questions
Can I use a loan as proof of funds for a visa?
It depends on a couple of things. Generally, you need to already have a visa to qualify for a loan, so you can only potentially use a loan to satisfy this requirement if you already have an eligible US visa. It also depends on whether or not your school accepts a loan they haven’t received yet as proof of funds, since not all do. Talk to your school’s financial aid office for more details on how this will work in your specific situation.
What happens if an international student can’t repay a loan?
It depends on where you are and how bad it gets. If you think you might have trouble paying off your student loan, the first thing you should do is reach out to your lender or cosigner. Many student loan providers let you make reduced or no payments if you’re facing temporary financial hardship. Others might even be willing to work with you to come up with a more affordable repayment plan if your financial situation has changed since you were approved.
While your lender can’t pursue you if you move to another country and are no longer paying US taxes, you might not be able to ever move back to the US. And if you have a cosigner, failing to make payments can destroy their credit and make it difficult for them to buy a house, get a new credit card and even get a new job in some cases.
Can I get a car loan as an international student?
It’s possible, though it’s not easy. You might have the most luck with lenders that specialize in personal loans for international students like Stilt. Westbon even has an international student car loan.
