One major topic among international and potential students in the USA is the possibility of loans for international students in the United States of America.

There are several reasons for this.

Unlike their domestic counterparts, international students face quirky barriers in accessing student loans in the US.

Their challenges may stem from unco-operative cosigners, lack of good credit history in the US, and lack of authentic source of income.

So, one can say that concerning student loans in the United States, international students have limited options available to them. And where they have options, conditionalities and qualifications can be remarkably different from those of the home students.

Is the situation a hopeless one for international students?

Not at all! 

The seeming difficulties notwithstanding, several loan options are available for international students in the US.

In this article we’ll cover the overview of loans for international students in the US, including eligibility and loan options and the concept of a cosigner, among many other topics. And we hope that after reading this article, you’ll be able to make a clever decision regarding student loans.

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An Overview of Loans for International Students In the USA

Conventionally, the American Federal government makes loans available for United States citizens studying in the USA. The loans are called federal loans and are popular with USA students studying in the USA. 

However, these loans are not available for international students studying in the United States. In their stead, international students are eligible for international student loans- specialized private education loans available to students from other countries studying in the USA.

International Student Loans are currently a very pragmatic way to finance one’s education in the United States. The loans are very flexible and can offer loan amounts high enough to pay for your entire education. 

Propitiously, these loans have flexible and extended repayment terms and reasonable interest rates that make repayment affordable upon graduation.

Loan Options for International Students in the USA.

As mentioned earlier, most international students are not eligible for federal student loans. However, they can access other kinds of loans available for international students. We will categorize these loans under the:

a. Loans for international students in the USA with a cosigner.

b. Loans for international students in the USA without a cosigner.

A. Loans for international students in the USA with a cosigner

Most international students in the USA lack reliable credit history. For this reason, several lending institutions demand that they provide a cosigner before they are eligible for loans in the USA. 

Concept of a Cosigner in Relation to Loans for International Students in the US.

 A cosigner in the USA has the legal obligation to repay a loan should the international student default in loan repayment. A cosigner must be a permanent citizen of the USA and should have lived in the USA for up to two years. He must be a parent, relative, or close friend of the international student seeking the loan. He must be a person with a reliable credit history in the state.

The cosigner is responsible for repaying both the principal amount and interest. 

Financial Institutions that Require a Consigner as a Condition for Student Loans in the US.

You can try the following banks for a student loan if you’re sure of getting a cosigner as an international student in the US.

To be specific, some examples of financial institutions that provide loans to international students with a cosigner include:

1. Sallie Mae
2. Wells Fargo
3. Chase
4. Discover
5. Citizens Bank
6. SunTrust
7. PNC Bank
8. Union Bank
9. CitiBank 

B. Loans For International Students Without a Cosigner.

While having a cosigner is crucial for an international student seeking a student loan, it’s noteworthy to acknowledge that getting a cosigner as an international student is not a walk in the park. 

Granted, having a cosigner serves as a catalyst that quickens the loan process. But what happens if an international student needs a student loan but can’t find a cosigner?

Some lending institutions are cognisant of this fact. Because of this, they offer alternative credit and income verification, which may include utility bills or rent payments, to determine the borrower’s creditworthiness. Yet, others provide loans specifically for international students without a cosigner. The downside to this kind of international student loan is that they come with high-interest rates and fees.

Some examples of institutions in the USA that provide loans to international students without a cosigner include:

1. MPOWER Financing
2. Prodigy Finance
3. Stilt
4. Meritize
5. LendKey Technologies
6. College Ave Student Loans

Conditions to meet before getting a loan in the US as an International Student without a cosigner

There are several conditions that international students may need to meet to be eligible for a student loan in the US without a cosigner. They include:

• Proof of Income: To be eligible for a student loan in the US, many lending institutions will require you to provide proof of income or financial support from your parent or sponsor. 
• Good Credit History: While some lending institutions may need you to show good credit history, others may consider alternative forms of credit, such as utility bills or rent payments, to determine creditworthiness since they know most international students do not have a credit record in the US.
• Enrollment in an Accredited Institution: To qualify for a student loan in the US, you must provide evidence of your admission into an accredited college or university in the US. 
• Proof of Citizenship or Permanent Residency: You must provide evidence of citizenship or permanent residency in your home country to qualify for student loans in the US. 
•  Cosigner: You should be able to present a cosigner who is a US citizen or permanent resident with a good credit history in the US.
•  US Bank Account: You must have a US bank account opened in your name.

Read Also: 20 Cheap US Universities for International Students

How to Apply for International Loans for Students in the USA

To apply for an international student loan in the US, you must meet the basic eligibility requirements and present specific papers to the lending institution. Also, you must follow some definite steps to ensure the success of your application. 

Here are the steps you can follow to apply for an international student loan in the US:

1. Research: Research and compare different lenders that offer international student loans in the US. 
2. Consult an Experienced Lender: Look for experienced lenders working with international students that give competitive interest rates and repayment terms.
3. Eligibility: Check if you are eligible for an international student loan. Most lenders have specific eligibility requirements for international students, such as enrolling in a degree-awarding program at a US college or university, having a good credit history, and demonstrating your ability to repay the loan.
4. Gather the required documents: Practically, you will need to provide proof of your enrollment, evidence of your income and assets, a copy of your passport, and other legal and financial documents.
5. Apply: After you are satisfied that you have all the legal and financial documents, you can apply to the lender. You can do this online or by mail. Be sure to provide all the required documents and be as accurate as possible while completing the forms.
6. Wait for Review: Wait for the lending financial institution to review your application and make a decision. The process can take several weeks, so exercise patience.
7. Application Approval: If your application is approved, the lender will provide you with a loan agreement outlining the terms and conditions of the loan, including the interest rate, repayment schedule, and fees.

Don’t Stop Reading

8. Review the Loan terms: Review the loan agreement carefully and ensure you understand all the terms and conditions before signing.

9. Sign the Loan Agreement: After going through the terms and conditions for the loan, and, if you’re okay with the loan terms, you can sign the loan agreement, providing any other additional documents or information the lender may require.

10. Receive Your Funds: After you have gone through the loan terms and are satisfied, the next step is to accept the conditions. After that, expect your loan in your bank account.

When the lending institution doles out your loan, ensure you use the funds to pay for your education and living expenses in the US. Repay the loan on time to avoid defaulting on the loan.

Loan repayment and Forgiveness

Repaying student loans can be daunting, especially for international students with limited income and credit history. Therefore, you need to understand your repayment options and choose one that fits your financial situation. 

The following are the repayment options available for international students who took student loans in the US:

1. Standard Repayment: This is the most common repayment plan for student loans. Under this plan, you will make fixed monthly payments for up to 10 years based on the amount of your loan and the interest rate.
2. Graduated Repayment: This plan enables you to start your repayment low, then increase it every two years. This plan is for borrowers who expect a higher income in the future.
3. Extended Repayment: Under this plan, you spread the repayment period up to 25 years, resulting in lower monthly payments. Nevertheless, you will pay more in interest while the loan lasts.
4. Income-Driven Repayment: This plan bases your monthly payments on your income, family size, and other factors. This plan can be beneficial for international students with low incomes.

In practice, loan forgiveness programs are traditionally not available to oversea students. Still, some lending institutions may have specified loan forgiveness or release alternatives for oversea students.

Read Also: 10 Best Medical Schools in Switzerland for International Students in 2023

Final Notes

As an international student, a careful estimation of all you need to study in the US. You can start by looking for scholarships and other financial aid from your school and sourcing funds from relatives and friends. International student loans should come after you have used up all these mediums.  

The reason is that securing a loan as an international student in the United States can be challenging, but it’s not impossible. You should understand the different loan options available and the requirements for each so you can make an informed decision on the best option for you. 

Having a cosigner can be beneficial as it can help to improve the chances of getting approved for a loan and may allow the borrower to get a better interest rate. There is a downside to it, however. The cosigner is legally responsible for the loan if the borrower defaults. 

If you do not have a cosigner, you have other available options. You can use alternative forms of credit- institutions that offer loans specifically for international students without a cosigner.

It is not enough to seek and get approval for a loan; you should also have the plan to pay back. Pay close attention to the various repayment plans and choose the one you consider the most convenient. As a reminder, the following are repayment options available: standard repayment, graduated repayment, extended repayment, and income-driven repayment. Choose the one most suited for you.

Again, do your due diligence and critically review the loan conditions; research and compare different loan options before deciding which option to adopt.

On a general note, getting a loan as an international student in the US can be daunting. But with proper research and understanding of the options available, international students can find a loan that fits their financial needs. 

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